Latest / Leaders In Payments / Pulse of Payments: Swipe Right on SoftPOS: Unlocking Payment Freedom with Pierre Aurel and Norman Frankel of Stanchion | Episode 405

Transcript

Pulse of Payments: Swipe Right on SoftPOS: Unlocking Payment Freedom with Pierre Aurel and Norman Frankel of Stanchion | Episode 405 · Leaders In Payments

• 0:01
  Speaker 1: Welcome to this special Pulse of Payment series titled Swipe Right on SoftPause Unlocking Payment Freedom, a special six-part series brought to you in collaboration with Ingenico, the global leader in payments.
• 0:13
  Speaker 1: Softpause is a revolutionary technology that lets merchants accept payments on any smartphone or device, unlocking a world of possibilities.
• 0:22
  Speaker 1: Thank you, commerce forward.
• 0:47
  Speaker 1: Buckle up and get ready to swipe right on SoftPause and unlock payment freedom.
• 0:49
  Speaker 2: Hello everyone and welcome to the Leaders in Payments podcast.
• 0:52
  Speaker 2: I'm your host, greg Myers, and this is the fourth episode in our PULSA Payments series on SoftPause, sponsored by Ingenico.
• 1:01
  Speaker 2: Today we have two very special guests Pierre Arel, the Chief Product Officer at Stanchion Payments, as well as Norman Frankel, the Chief Growth Officer at Stanchion.
• 1:09
  Speaker 2: So, guys, welcome to the show.
• 1:11
  Speaker 2: Thank you so much for being here.
• 1:12
  Speaker 2: Thank you.
• 1:13
  Speaker 2: Thank you, greg, good to be here.
• 1:14
  Speaker 2: So let's go ahead and dive in.
• 1:16
  Speaker 2: Pierre, if you don't mind taking this first question, can you tell our audience a little bit about Stanchion and what you do?
• 1:22
  Speaker 2: Can?
• 1:23
  Speaker 3: you tell our audience a little bit about Stanchion and what you do, sure.
• 1:26
  Speaker 3: So Stanchion is an established business.
• 1:28
  Speaker 3: It's a global payments consulting business Been around since 2001.
• 1:30
  Speaker 3: So solid reputation in the industry, with offices in Australia, the UAE, south Africa and the US and a smaller European presence as well, operated out of the UK.
• 1:42
  Speaker 3: Historically the business has always consulted to banks around their payment infrastructure, advising banks on how to modernize and keep their systems compliant, particularly around the card systems, so card switches and card issuing platforms.
• 1:56
  Speaker 3: Over the past five years maybe slightly more Norman we've been building our own software products.
• 2:03
  Speaker 3: And that's come about from a need, speaking to these banks, realizing that there's some unmet needs that they have in their ecosystem where they need third-party software to augment that.
• 2:14
  Speaker 3: And Stanchion's been building our payment fabric technology to overlay on these card systems and cover those gaps and meet those needs that customers have been telling us.
• 2:26
  Speaker 3: And that's been kind of soliciting feedback from a worldwide audience, from the Middle East, from Africa, from the Caribbean.
• 2:33
  Speaker 3: And we bring that all into the product team where we aggregate the technologies and take that product to market ourselves, known as Payment Fabric.
• 2:42
  Speaker 2: Okay.
• 2:42
  Speaker 2: So, pierre, sticking with you, maybe walk us through your journey in payments and what led you to Stanchion.
• 2:49
  Speaker 3: Yeah, so I've been with Stanchion almost two years now, so really maturing the software environment here and thinking about the strategy and what we do, particularly around soft pause initiatives.
• 3:01
  Speaker 3: Prior to that, I actually built with my team at my previous company one of the earlier soft pause solutions in market and that began in 2019 and really spent a lot of time working with Visa and MasterCard building out the very low level payment kernels that need to operate on a payment device, then moving on to the mobile apps and then the processing environments, and so I spent the better part of four to five years taking effectively a tech startup to market and launching that SoftPoS solution, and so a lot of scars that I've got to show from those experiences.
• 3:38
  Speaker 3: Softpos has really been a labor of love.
• 3:41
  Speaker 3: I guess it's a challenge, but it's been fantastic working in the industry and driving that change, moving from hardware to software, and so a lot of experience there in terms of the early days of SoftPoS.
• 3:53
  Speaker 3: And now Instantium got the view of how we help these banks launch more digital issuing products, how to digitize cards into wallets as well as how to accept digital payments in their acceptance network, and so we plan on both sides of that card issuing and acquiring.
• 4:14
  Speaker 2: Okay, norman, same question for you a little bit about your payments background and what led you to Stanchion.
• 4:20
  Speaker 4: Thank you, greg.
• 4:21
  Speaker 4: So I've been in the payments industry for 33 years now a bit of a veteran and I started in the city of London with a bank called NatWest.
• 4:29
  Speaker 4: Natwest was quite a famous innovative bank, on both the issuing and the acquiring side.
• 4:35
  Speaker 4: One very well-known incubation company that came out of that was indeed WorldPay itself.
• 4:41
  Speaker 4: So I spent a decade there, really at the end, driving everything around their digital channels, especially mobile, and also getting involved in innovative products, predominantly on the acquiring side more than the issuing side.
• 4:56
  Speaker 4: And then from there I went into a large technology firm that was a world leader in the mobile payment space and I ran their global business for wireless internet and e-commerce and mobile commerce and from there we or I came up with an idea which the company supported me on.
• 5:18
  Speaker 4: I took that outside of the business, ran that independently and spent 10 years growing that in the customer not present e-commerce space to do with the processing of mobile payments, and that was one of the early examples of a FinTech which started back in 2004.
• 5:35
  Speaker 4: And I was lucky enough to exit that with a listing on the Junior Stock Exchange in London.
• 5:41
  Speaker 4: And then I went to work for a well-known firm called Euronet and I was helping to open up new markets for them across Central and Eastern Europe, turkey and the Middle East.
• 5:52
  Speaker 4: And then from there I've been in stanchion now for six years and I work very closely with Pierre driving the global growth for our payment fabric technology, which we've used with Ingenico, for our payment fabric technology, which we've used with Ingenico.
• 6:04
  Speaker 4: So I've actually worked with the organization which Ingenico board, which previously called FOSS.
• 6:10
  Speaker 4: I've actually worked with the CEO, brad Hayett, and the sales director, mike Barnes, for five and a half years now.
• 6:20
  Speaker 4: So Stansion was actually one of the very first organizations that was in the integration space, that partnered with Angelico, and we went on to have some success which I'm sure we'll talk about later on.
• 6:32
  Speaker 2: Okay, great, Thank you both for sharing that about your journeys.
• 6:34
  Speaker 2: So let's get into the meat of the conversation, which is around soft pause.
• 6:39
  Speaker 2: And for those out there, Norman, this question is for you.
• 6:42
  Speaker 2: For those out there that may not know what SoftPos is, can you give us your definition?
• 6:47
  Speaker 2: What are some of the benefits and what makes it different than traditional POS systems?
• 6:52
  Speaker 4: So the first time I spoke five and a half years ago to Mike about SoftPos, I was immediately attracted to it.
• 6:59
  Speaker 4: It's very simple it's software as a point of sale that you download onto an Android or now Apple iOS device and it turns that mobile phone, providing it's got NFC capability, into a fully functioning contactless acceptance point of sale terminal.
• 7:17
  Speaker 4: It's incredibly powerful to drive financial inclusion, and so we're seeing a lot of small merchants who may not want to carry multiple devices around, such as a mobile point of sale, and they don't want to keep other devices charged up, particularly if they're not using it very often, whereas all of these merchants have got their own mobile phone and they want to be able to do that.
• 7:40
  Speaker 4: So today, all of us, when we're using our phones, we use it to take photographs.
• 7:43
  Speaker 4: We use're using our phones.
• 7:44
  Speaker 4: We use it to take photographs, we use it to scan documents, we use it to set alarms, show times.
• 7:50
  Speaker 4: Today it's very powerful because now, by downloading the Ingenico softpods solution, that app or if it's built as an SDK into somebody else's app will actually allow that mobile device to take a contactless acceptance transaction and it's really powerful for driving financial inclusion.
• 8:11
  Speaker 2: Okay, great.
• 8:11
  Speaker 2: So, pierre, over to you.
• 8:13
  Speaker 2: Stanchion is obviously making waves in the soft pause space, so what's the core mission and vision of what you're working on in this area?
• 8:21
  Speaker 3: Yeah.
• 8:21
  Speaker 3: So if I have to give a simplistic answer, it's about increasing access to digital payments, and so what we do is we provide an integration layer within the banking environments, but what we want to be is an enabler for solutions like SoftPos to reach more merchants so that more consumers can pay securely with their digital wallets, their Apple Pay and Google Pay.
• 8:45
  Speaker 3: So really we see ourselves as this enabler to kind of accelerate those processes and not let banks get stuck in their traditional tech or their legacy technology stack.
• 8:56
  Speaker 3: We try and modernize that and leverage partners like Ingenico to actually drive that change.
• 9:02
  Speaker 3: So how do we get more access safe, convenient access to digital payments?
• 9:07
  Speaker 3: Softpause is one of those enablers.
• 9:10
  Speaker 2: Okay.
• 9:11
  Speaker 2: So, Pierre, sticking with you.
• 9:12
  Speaker 2: What are some of the trends that are driving adoption of SoftPause?
• 9:15
  Speaker 2: Okay, yeah.
• 9:16
  Speaker 3: So look, I think everybody in the world has heard of Apple Pay, right?
• 9:20
  Speaker 3: So for the past 11 years that's been a big driver of how consumers want to make payment, simply because it's so simple and pervasive.
• 9:29
  Speaker 3: You know once your card's loaded it's secure.
• 9:32
  Speaker 3: You use a biometric authentication and you tap and go and you can use it on transit systems, you can use it in street cafes, you can use it pretty much anywhere globally to pay.
• 9:42
  Speaker 3: So digital wallets are a key driver.
• 9:46
  Speaker 3: It's the mega trend behind why people want to use cards.
• 9:49
  Speaker 3: It's that convenience.
• 9:51
  Speaker 3: Right Now, those wallets are only relevant if you can tap them somewhere to make that payment.
• 9:56
  Speaker 3: So you need acceptance networks, you need physical POS terminals, terminals that Ingenico supply.
• 10:02
  Speaker 3: You know the physical hardware top, and now that's been digitized.
• 10:06
  Speaker 3: So they've just extended their offering from hardware to a pure software solution.
• 10:12
  Speaker 3: So I think, based on consumer demand, there's a need for increased payment acceptance.
• 10:18
  Speaker 3: So how do you get more places where you can make that payment, and SoftPos is one of those enablers.
• 10:24
  Speaker 3: You might argue that COVID was a big driver for contactless payments, and so you know everyone will nod and agree to that point, but unfortunately SoftPos missed the boat there.
• 10:34
  Speaker 3: It was still too early in its infancy.
• 10:37
  Speaker 3: You know there were really pilot programs being operated between 2018 and probably 2022, 23.
• 10:45
  Speaker 3: And so it wasn't at any mass scale and so SoftPos hadn't seen the light of day, I'd say, to benefit from the COVID pandemic, but certainly it was a catalyst for consumers to digitize their cards, move them from plastic into digital wallets, and that's continued, and so that's the preferred payment method for consumers.
• 11:06
  Speaker 3: Softpos is kind of benefiting from that now.
• 11:10
  Speaker 3: So you're seeing that benefit and in many markets there's a driver to reduce hardware, because there's a lot of costs associated with physical hardware that you need to import, deploy to merchants and maintain it.
• 11:23
  Speaker 3: It's not just drop and go that device.
• 11:26
  Speaker 3: If it's faulty, acquirers have to look after it.
• 11:29
  Speaker 3: So there's a lot of cost and many acquirers will be looking to drive down that cost and increase access.
• 11:35
  Speaker 3: In other markets they may not have had that acceptance network yet.
• 11:40
  Speaker 3: So, particularly in emerging markets, we've seen some kind of leapfrogging effect where they didn't have a lot of legacy POS terminals.
• 11:49
  Speaker 3: They had no terminals at all.
• 11:50
  Speaker 3: So it was really cash-based markets or mobile money or account-to-account.
• 11:56
  Speaker 3: And so you know, for those markets SoftPos is just a natural fit now, because if they didn't have acceptance before.
• 12:03
  Speaker 3: Consumers want to pay with a digital wallet, roll out softpos and suddenly you meet that need right, so then merchants can accept those payments.
• 12:11
  Speaker 3: So those are the mega trends that we see.
• 12:14
  Speaker 3: You know it's really.
• 12:15
  Speaker 3: One is cost reduction and the other is just making sure that payments are safe, convenient for these consumers.
• 12:23
  Speaker 2: Okay, so Norman over to you, and Pierre mentioned this a little bit, but can you give us some insights into the types of businesses and industries that see the most significant benefit from soft pause?
• 12:35
  Speaker 4: So one of the stories that gets the sort of most amazing feedback when we're presenting, especially in Africa, is how during the COVID pandemic, particularly in the UK, there was a lot of reference to not touching cash, using contactless acceptance, and the Church of England was a very early adopter to allow people to pay for their donations when they went to church on Sunday with the soft solution, and when we talk about that in Africa, people's eyes really pop and they get very interested by that.
• 13:07
  Speaker 4: I think really the largest number of merchants that are taking it up are at the smaller end.
• 13:12
  Speaker 4: They may be sole merchants, they may be small restaurateurs, may have food stalls, they may be associated with tourism, and a lot of people will use it in that context, and they're using it in that context because they're moving around.
• 13:27
  Speaker 4: They don't want to have second devices that they're charging up.
• 13:30
  Speaker 4: But it's been very interesting.
• 13:32
  Speaker 4: For example, in Greece the government wanted to fiscalize all tax receipts, and so they started to tell accountants and lawyers that they must have a point of sale terminal to be able to take card payment transactions, and so there was a rush for people to start using SoftBoss.
• 13:52
  Speaker 4: Now they use it on a very ad hoc basis, but they needed to do that in order to comply with the law In Romania.
• 13:59
  Speaker 4: About 18 months ago, the Romanian government passed a law that said that if you've got a turnover of above 10,000 euros, which isn't very much then it was mandatory that you offered a contactless acceptance option to a customer if they wanted it.
• 14:17
  Speaker 4: So what happened was that all these small merchants started phoning the banks, and this was a market where the point of sale was subsidized by the bank to the merchants.
• 14:29
  Speaker 4: But now we're talking about very low transaction volumes, so the banks didn't want to effectively subsidize that.
• 14:36
  Speaker 4: They'd already fairly recently implemented soft-boss capability, so what they did was they just said to the smaller merchants you can go onto our website and start to download soft-boss capability, and so that was something that really spread quite quickly.
• 14:53
  Speaker 4: But it's large enterprise organizations that are using it as well.
• 14:56
  Speaker 4: So, for example, walmart use it, 7-eleven and Decathlon these are major retail stores and they'll use it for everything from queue busting to when there may be a cyber attack that takes out a particular store location.
• 15:10
  Speaker 4: They can carry on trading.
• 15:12
  Speaker 4: And then yesterday we were presenting the Ingenico solution in the Philippines to the largest e-commerce gateway processor, and they represent both Courier, which is a cash on delivery market, as well as insurance companies, and so insurance agents have a desperate need to be able to collect funds and take those transactions.
• 15:37
  Speaker 4: So they're looking at SoftBoss as a way of being able to take those funds as well.
• 15:42
  Speaker 4: So it's really it crosses many industries, but I think the volume that we're seeing at the moment is in that small merchant category.
• 15:52
  Speaker 2: Okay, so Norman, sticking with you, are there any use cases or kind of real world examples of where this solution has really transformed a business?
• 16:01
  Speaker 2: Anything you can talk about there?
• 16:03
  Speaker 4: So, for example, Stanchion was involved in deploying the Ingenico solution in Greece with the largest acquirer there.
• 16:13
  Speaker 4: So Uranet is an entity that bought the largest bank acquirer because the bank acquirers were selling off their acquiring businesses, and so Piraeus Bank's acquiring arm was bought by Euronet and they've deployed that.
• 16:26
  Speaker 4: So within Greece, which is a market that gets a lot of tourists, there's been a huge volume of transactions and a huge volume of merchants that actively use the app.
• 16:38
  Speaker 4: During the summer months or during religious occasions, we suddenly see spikes of apps that are suddenly being used in those instances.
• 16:48
  Speaker 4: I mentioned Romania earlier.
• 16:50
  Speaker 4: That's another market that has got a very high acceptance rate.
• 16:55
  Speaker 4: Ing issued a press release about a year after going live with their soft pause solution, and ing are a large dutch bank that are present in all of the european countries and in their press release they said that one year after launching soft pause 25 so one in four of all transactions that they acquire in romania were initiated from a soft-poss application.
• 17:21
  Speaker 4: Now that was a case of, if you like, the government having said that, they wanted to get more sight of fiscal tax receipts and therefore they mandated that every business with a small turnover must have the ability to offer contactless acceptance, otherwise there was a very hefty fine for that.
• 17:42
  Speaker 2: Okay, great Thanks for sharing those.
• 17:43
  Speaker 2: So, Pierre, over to you.
• 17:45
  Speaker 2: I mean, obviously we talk about payments, we have to talk about security.
• 17:49
  Speaker 2: So how does SoftPause ensure that the security of the transactions are there, and what type of key compliance requirements are there?
• 17:58
  Speaker 3: Yeah.
• 17:58
  Speaker 3: So that's a good question, and probably one of the key factors that slowed down some of SoftPoS's progress over the last 10 years has been really, how do they answer some of those security questions?
• 18:10
  Speaker 3: And so it's matured, particularly in the last two years.
• 18:14
  Speaker 3: There's now an industry standard and that's known as PCR MPOC it's an acronym, so obviously I'll delve into that just now.
• 18:22
  Speaker 3: But there's a lot of security elements that need to match what was there with the hardware.
• 18:27
  Speaker 3: So when you had physical terminals you had a certain protective barrier around the core data and customers' information.
• 18:34
  Speaker 3: Now you move it on to any common device.
• 18:37
  Speaker 3: How do you maintain the same levels of security?
• 18:40
  Speaker 3: And so there's been a lot of work done there.
• 18:43
  Speaker 3: The PCI MPOC standard has come about from two prior standards that have been tested and launched in market for a number of years, but essentially that security framework now allows for the safe processing of car data on any mobile phone.
• 18:57
  Speaker 3: So they call it a COX device, a commercial off-the-shelf device.
• 19:02
  Speaker 3: Literally, you can walk into any retailer, purchase a mobile phone that's got NFC, install the app and start accepting payments.
• 19:10
  Speaker 3: So that was unheard of 10 years ago, but that's going to be the new norm.
• 19:14
  Speaker 3: So in terms of security, the big ticket item is always maintaining this PCI MPOC standard.
• 19:21
  Speaker 3: So it's a long journey to get there A lot of security requirements, submitting your application to a PCR test lab where they really pen test everything about that app that you code reviews and really pull it apart and tell you everything you've done wrong.
• 19:36
  Speaker 3: So for an engineering team it's quite frustrating but at the same time rewarding to see that you are closing out any possible vulnerabilities in that app.
• 19:46
  Speaker 3: In addition to that, there's a number of other standards you need to maintain.
• 19:50
  Speaker 3: So PCI DSS is the one that is industry standard.
• 19:54
  Speaker 3: Everyone's familiar with that and that's maintaining a secure environment and all the processing around core data.
• 20:00
  Speaker 3: There's a new standard called PCI-SSF and that stands for the Secure Software Framework.
• 20:06
  Speaker 3: That consists of two parts.
• 20:08
  Speaker 3: So if you're a software vendor building a soft-core solution, you need to also obtain that standard and that effectively makes sure that your whole software development lifecycle is secure, so that from the start of planning a change through to implementation into production payment system, you've met a whole lot of criteria.
• 20:28
  Speaker 3: And that's really what separates the men from the boys is maintaining that secure practice, not just for one source but on an ongoing basis.
• 20:36
  Speaker 3: How are you always compliant?
• 20:38
  Speaker 3: And then the last one is obviously PCR, pin processing, because now you're entering a PIN number on the mobile phone as well.
• 20:46
  Speaker 3: You've got to protect that.
• 20:48
  Speaker 3: And as you process that from point to point, there's certain standards that need to be maintained.
• 20:53
  Speaker 3: So all of these things come at a cost.
• 20:55
  Speaker 3: You know you're using independent labs and it's, at minimum, a six to 18 month investment of your own time in meeting these various standards.
• 21:05
  Speaker 3: So the investment is going to be significant a couple of hundred thousand dollars that any software company needs to put into this and maintaining that.
• 21:13
  Speaker 3: And so I think the disconnect we see in the industry is people expect, now that you've got software should be free, yet you maintain in the same security and standards that hardware manufacturers needed to maintain.
• 21:26
  Speaker 3: So there's a number of costs that are put onto these software vendors which are unseen.
• 21:32
  Speaker 3: To be honest, the consumer and the merchant don't care.
• 21:35
  Speaker 3: All they want is a secure experience, right, they don't understand all the complexity behind it.
• 21:40
  Speaker 3: So there naturally needs to be some sort of cost recovery to position this and make sure that your solution is differentiated and better than other products in market that have not got these certifications.
• 21:54
  Speaker 2: Okay, great.
• 21:55
  Speaker 2: So let's switch gears a little bit and talk about your partnership with Ingenico and maybe the future of this space.
• 22:01
  Speaker 2: So, norman, we'll go back to you.
• 22:03
  Speaker 2: So, as everyone knows, ingenico has a long history of being a major player in the POS terminal market.
• 22:09
  Speaker 2: So how important is your partnership between Ingenico and Stanchion as far as driving innovation in the softball space and kind of that adoption?
• 22:21
  Speaker 4: I'd like to think it's a symbiotic relationship that Stanchion have benefited from the fact that this is an innovation which people want to hear about.
• 22:30
  Speaker 4: They still want to hear about it.
• 22:32
  Speaker 4: We've done in excess of 200 presentations on the topic and people are still really interested to understand how they can deploy it.
• 22:40
  Speaker 4: These days, the more emerging the market, the more interested they are in that solution, particularly in markets like Asia and now several African markets.
• 22:50
  Speaker 4: You've seen new capabilities come in, such as QR code payments, which are a set of rails that traditionally the central bank or local government have put in place.
• 23:03
  Speaker 4: Local government have put in place and those transactions they don't run on the traditional card rails and therefore organizations like Ingenico partly miss out on some of that capability.
• 23:14
  Speaker 4: However, the ability for people to take these card transactions is still important because a lot of these emerging markets rely heavily on foreign direct investment, business people coming into market and tourism, where you can't use those QR code processes very easily.
• 23:34
  Speaker 4: Pierre mentioned that Stansion's heritage has been around organizations that own their own payment switch or core technology and what we do with our payment fabric is protect that switch and wrap it.
• 23:47
  Speaker 4: So the role that we've played with Ingenico is going out and talking to those larger banks where they have this existing tech.
• 23:56
  Speaker 4: Now those organizations may either not have skills, they may not have the time, they may have vendors that they rely on to do change to that platform, which then become cost prohibitive to make the business case take place, and what they can use is our overlay, which is already pre-integrated to the Ingenico environment and to some core payment switch vendors, in order to facilitate that project moving forwards.
• 24:24
  Speaker 4: Facilitate that project moving forwards and they can still take control and take some of the pressure off the core system and the need to do constant regression testing.
• 24:32
  Speaker 4: So when you introduce software into an environment as opposed to hardware, the pace of change and the pace with which you need to launch new features is substantially greater.
• 24:44
  Speaker 4: And what that does is it puts quite a lot of effort and risk onto a bank if they're having to do regular change and go through regular regression test cycles in order to get changes through.
• 24:56
  Speaker 4: So our relationship with Ingenico, I think, is a good one.
• 25:00
  Speaker 4: Ingenico has grown rapidly but with all of the work that's going on and with the software element to this, the projects and the integration of it are substantially more complex than a traditional hardware project where somebody would just buy the hardware, it would come certified and off they go.
• 25:19
  Speaker 4: With a software project, there's a lot of hand-holding, there's level three certification that needs to be done, and there's a lot of handholding, there's level three certification that needs to be done, and there's a lot of operational efficiencies that need to be done correctly if you're not going to overburden the contact center and everything else that's going on, and so that's where an integration partnership, such as the one that Stanchion brings, helps create this symbiotic partnership.
• 25:45
  Speaker 2: Okay, so Pierre, over to you.
• 25:47
  Speaker 2: So what are the key factors that make a successful partnership in this soft pause ecosystem, and how does Stanchion approach this type of collaboration?
• 25:57
  Speaker 3: Yeah.
• 25:57
  Speaker 3: So ecosystem is the right word to use there, greg.
• 26:00
  Speaker 3: I think the card value chain is quite complex.
• 26:02
  Speaker 3: You know, you've got the two sides issuing, acquiring you've got card schemes, you've got core banking providers and then third-party software providers like ourselves.
• 26:14
  Speaker 3: So what we look to do is obviously spark some innovation with customers.
• 26:20
  Speaker 3: And so you know, we try and provide a full consulting experience for the customer.
• 26:26
  Speaker 3: So it's about sparking that thought about the art of the possible.
• 26:30
  Speaker 3: What could this traditional bank do with something like Softpops?
• 26:33
  Speaker 3: And it's never forced, it's really to guide them and say this is what you could do, these are your options.
• 26:40
  Speaker 3: And it's always about positioning the right product for the right use case.
• 26:44
  Speaker 3: So that's our consulting heritage that we bring to the market.
• 26:49
  Speaker 3: And then there's the product plugging pieces, where it would be an Ingenico soft post solution plus our pavement fabric to streamline the integration and work that a typical acquirer or bank would need to do.
• 27:03
  Speaker 3: So we take away all the pain points of those integrations and then we provide the 24-7 managed support to give them the assurance that now you're moving from a hardware world to a software world.
• 27:15
  Speaker 3: It's 24-7, right.
• 27:17
  Speaker 3: So if something breaks, it's not about the merchant waits for a new terminal to ship to them, you can fix it there and then it just requires intervention.
• 27:25
  Speaker 3: And so collectively, you know, between Energetico and Stanchion, we've got that end-to-end offering.
• 27:31
  Speaker 3: But in terms of collaborating in the ecosystem, it's about maintaining certifications that give you the accreditation, give customers confidence that they're buying a good product, and then it's working with the card schemes to also build up trust and understanding about this payment method.
• 27:49
  Speaker 3: Softcourse is relatively new.
• 27:50
  Speaker 3: You know people don't fully understand it.
• 27:53
  Speaker 3: They may assume it's a QR scanning app, when it's completely different.
• 27:57
  Speaker 3: They might assume it's the Apple Pay e-commerce checkout, which it's not right.
• 28:02
  Speaker 3: So a lot of people still need to get that understanding of NFC payments and security that underpins it, and so we rely heavily on Visa, mastercard, Amex, diners, et cetera, to really create that awareness.
• 28:17
  Speaker 3: A single vendor voice in the market is not going to drive change with merchants and create that demand for them to sign up and get a soft-posed solution.
• 28:25
  Speaker 3: So either it's regulation that drives it, like Norman was speaking about in Greece and Romania, or it's the winning demand that gets created by the interest that he's in a master car to say you can trust this technology, it's easy to use and let's get you onboarded, and so there are a number of partnerships that you need to work on in that ecosystem, and I think we're trying our best to really bring all of these parties together in the markets we target, and it's just a matter of time until you build up that trust and understanding.
• 29:02
  Speaker 2: Okay.
• 29:02
  Speaker 2: So, Pierre, sticking with you, let's talk about the future a little bit.
• 29:06
  Speaker 2: Where do you see SoftPause in maybe five years?
• 29:10
  Speaker 2: What types of new features and functionality do you think are coming and what will be the impact of that?
• 29:16
  Speaker 3: So it will be better than it is today.
• 29:18
  Speaker 3: I think that's the first thing.
• 29:19
  Speaker 3: One of the limitations we've experienced with SoftPause has been largely around the mobile device itself.
• 29:26
  Speaker 3: Devices in some markets ship without NFC, which immediately disqualifies them from being eligible to use a soft pose product, and that hinders adoption.
• 29:36
  Speaker 3: So that's the one factor.
• 29:38
  Speaker 3: The other factor is the NFC antenna itself that's built into the device is relatively weak, so it doesn't perform at the same levels that a traditional terminal would, which is truly contactless.
• 29:50
  Speaker 3: If you go to an Ingenico physical terminal and you tap, you can hold your card four centimeters above that device and transact With soft pods.
• 30:00
  Speaker 3: You've got to actually make contact.
• 30:01
  Speaker 3: The card has to touch the back of the phone in most cases.
• 30:04
  Speaker 3: So it's not truly contactless and it's a bit of a slow experience at the point of checkout.
• 30:10
  Speaker 3: Often there's a bit of delay and it's not elegant in terms of a checkout experience.
• 30:16
  Speaker 3: So there are initiatives underway with different device manufacturers to improve those antenna.
• 30:23
  Speaker 3: So there are a number of trials going on.
• 30:25
  Speaker 3: So in five years' time I think mobile phones will perform at the level that a traditional terminal does, or at least as close to it as physically possible.
• 30:34
  Speaker 3: So I think that's the one factor that's kind of an infrastructural piece that needs to happen over the next five years.
• 30:42
  Speaker 3: The other is increased trust.
• 30:44
  Speaker 3: So as people become more aware of it, they experience it once or twice at their local market or download it themselves from their bank or acquire it Over time.
• 30:55
  Speaker 3: That's just going to build and so they won't see a need for all the excess hardware.
• 31:00
  Speaker 3: They could stick to a softball solution if that's all they need.
• 31:03
  Speaker 3: If you're an e-commerce merchant and you do the odd in-person sale, soft pause is perfect, right, and I think we'll see a lot more of soft pause embedded use cases, so being used in self-service checkouts at a kiosk or even EV stations a tap and go type of EV station scenario.
• 31:23
  Speaker 3: So I think that's going to be rolled out over the next five years.
• 31:28
  Speaker 3: The last one, I guess, is a bit more of the blurring of the lines between online commerce or e-commerce as we might call it and in-person payments.
• 31:37
  Speaker 3: So SoftPos allows anyone to install the app on their phone, right?
• 31:42
  Speaker 3: You don't have to be classified as a merchant or a business, so individuals that are shopping could download onto their phone a payment app and, when they do the e-commerce checkout, tap their card on their own device or have an app-to-app type of interaction where you click checkout on your phone, it goes to Apple Pay, you click pay and it all gets settled.
• 32:05
  Speaker 3: It's kind of app to app, and I think that then blurs the line of what is e-commerce.
• 32:10
  Speaker 3: And will you ever need to type your car details in online and be at risk?
• 32:15
  Speaker 3: So fraud reduction comes into play there as well.
• 32:20
  Speaker 2: Yeah, that's an interesting one.
• 32:21
  Speaker 2: I don't know, I'd have to think about that one as far as from a user perspective, it would be kind of a weird interaction.
• 32:28
  Speaker 2: But that's that's interesting to think about.
• 32:30
  Speaker 2: So I'm glad you shared that.
• 32:31
  Speaker 2: So, norman, as you're thinking about merchants and they're being interested in this, what advice do you give them or would you give them if they're interested in a soft pause solution?
• 32:43
  Speaker 4: So, firstly, it's very easy to access it, download it, install it and use.
• 32:49
  Speaker 4: So actually there is nothing to lose.
• 32:51
  Speaker 4: If you're in a merchant in a market where you're getting charged by the bank for having a terminal, or you want to take transactions but you're going to get charged by the bank for doing that, you'll often find vendors out there with softball solutions or banks that will allow you to download the app and only pay when you use the application.
• 33:14
  Speaker 4: So actually in that instance, a merchant could save more than $300 over, just say, a three-year period from the rental of a terminal.
• 33:25
  Speaker 4: If you're in a market where the terminal is subsidized to it, then we've already seen that many merchants, particularly at the smaller end, they don't have their terminals charged up or suddenly somebody wants to pay and then they realize that it's not charged up or maybe one isn't working.
• 33:45
  Speaker 4: In fact, pierre and myself were in the Philippines just a few weeks ago and Pierre had that exact issue.
• 33:52
  Speaker 4: He was trying to buy some goods for his children whilst he was abroad, and this was a large shop and the large shop didn't have any POS devices that were working and so, unfortunately, pierre didn't have cash and so that was a lost transaction, both for the shop and for his daughters.
• 34:13
  Speaker 4: So by installing this on the phone, it's very easy to make that available and to be used.
• 34:20
  Speaker 4: So my advice to merchants is try it.
• 34:25
  Speaker 4: I had lunch with an entrepreneur whose wife runs a yoga studio and he was saying that his wife's getting more customers who want to pay with card and so she signed up with Revolut, but that comes with a dongle which she's also having to use.
• 34:43
  Speaker 4: But we had a conversation about soft pause and not everybody's aware of it right now and I think, as Pierre mentioned, that's where the schemes could have a big role to play to help drive awareness of the solution, because it's surprising how many people are still not aware that it's out there and it's as easy to use as it is taking a photograph on your mobile phone.
• 35:08
  Speaker 2: Okay, great.
• 35:09
  Speaker 2: So, as we come to a close start to wrap up the show, Pierre, any final thoughts, any key takeaways you'd like our audience to take from this episode?
• 35:18
  Speaker 3: I think the future of softpods is more about that.
• 35:21
  Speaker 3: It's an embedded payment experience, and so it all comes down to these application integrators what they choose to do with SoftPos, right.
• 35:30
  Speaker 3: So how do they bring it all together?
• 35:32
  Speaker 3: Now, the terminology is an SDK software development kit.
• 35:36
  Speaker 3: That's what SoftPos has been distilled into, and you can add that to multiple applications so any existing application can embed that and have a tap-on-phone type of experience.
• 35:48
  Speaker 3: If you think about the next time you need to sign up for Netflix and you've got a reoccurring debit order, instead of typing in all your card information, you could simply tap your card for that first initial transaction and that will become tokenized for all the reoccurring debits.
• 36:04
  Speaker 3: Short transaction, and that will become tokenized for all of the reoccurring debits, and in that process you've never shared your sensitive card details in clear text with anyone.
• 36:12
  Speaker 3: So it becomes a far more secure experience for cardholders.
• 36:16
  Speaker 3: And then downstream you've got your reoccurring debits and the convenience of never worrying about that, and then I think it'll also benefit from embedded loyalty and rewards.
• 36:28
  Speaker 3: So, as these application integrators that have got control of what's being sold compare that with SoftPos, you know you can start giving instant rewards and immediate discounts on the spot.
• 36:41
  Speaker 3: So I think those are the types of experiences we're going to see emerge, with SoftPos being embedded in more places.
• 36:47
  Speaker 2: Okay, Norman, same question over to you.
• 36:49
  Speaker 2: Any key takeaways you'd like to share with the audience?
• 36:53
  Speaker 4: So, surprisingly, and even though softbuzz has been available in Europe, for example, for over five years, the stage of market maturity that we're in is still very early phase.
• 37:05
  Speaker 4: I'd still call it phase one as we move into phase two, which is beginning to start to be discussed in some countries.
• 37:12
  Speaker 4: You're going to start to look at, as Pierre talked about, this need to build in additional application capability so, for example, dynamic currency conversion, the ability to add in embedded finance like buy now, pay later, and this provides a fantastic opportunity for the banks to make more revenue by expanding its ecosystem of fintech enablement and capability, but it actually provides a beautiful opportunity for them to incentivize a whole new distribution channel in order to sell additional services.
• 37:48
  Speaker 4: So suddenly, with the right kind of training, the bank can begin to put education programs on to the merchants and allow the merchant to participate in some of those buy now, pay later rewards from it, similarly, with the loyalty and reward concept that Pierre was talking about.
• 38:05
  Speaker 4: So, with a little bit of creative thinking, this can be a very big win-win ecosystem for everybody, and help with the grander goal of financial inclusion.
• 38:17
  Speaker 2: Okay, so, Norman.
• 38:17
  Speaker 2: Final question where can people go to learn more about Stanchion and SoftPause?
• 38:22
  Speaker 4: So our website is stanchionpaymentscom.
• 38:25
  Speaker 4: You can go on there and find information, or myself and Pierre we're regularly traveling so we're often posting on LinkedIn, so you can find my LinkedIn profile, norman Frankel or Pierre Harrell LinkedIn profile and you can get more information there.
• 38:42
  Speaker 2: Okay, great.
• 38:42
  Speaker 2: So, Norman Pierre, this has been a great conversation.
• 38:46
  Speaker 2: I know our audience is going to learn a lot from this.
• 38:48
  Speaker 2: As you mentioned, this is kind of new, so I think this series is really educating people on soft pause.
• 38:53
  Speaker 2: I love the use cases and sharing those, so thank you both for being on the show.
• 38:57
  Speaker 2: I really appreciate it.
• 38:58
  Speaker 2: I know your time is valuable, so thank you so much for being here today.
• 39:01
  Speaker 2: Thank you, Greg.
• 39:02
  Speaker 3: Thanks, greg, appreciate it.
• 39:04
  Speaker 2: Absolutely, and to all you listeners out there, I thank you for your time as well, and until the next story.
• 39:10
  Speaker 1: Thank you for listening to today's episode.
• 39:12
  Speaker 1: If you'd like to explore how SoftPause can unlock payment freedom for your business, please visit businessingenicocom.
• 39:19
  Speaker 1: Slash swipe, dash write, dash on dash soft pause.