Latest / The Payments Shed / Ep. 59 - Payments from the Merchant Side: Risk, Regulation & Reality in 2026 with Kingfisher plc

Transcript

Ep. 59 - Payments from the Merchant Side: Risk, Regulation & Reality in 2026 with Kingfisher plc · The Payments Shed

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Welcome to the Payment Shed Podcast, the weekly podcast that
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dives into the big topics, trends and people shaping the
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world's of payments, fintech and business leadership with your
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two Co hosts, myself Grant Evans and Justin Hannah.
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Welcome back to the Payment Shed podcast.
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I'm Justin Hannah and I am joined by my Co host Grant
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Evans. Today we are joined by Fines
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Davey Group, head of payments at Kingfisher.
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Fines. Thank you for joining us.
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Thank you very much. Tell us a little more about
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yourself, your background, and the role you do today.
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Yes, as as you say, I'm group Head of payments at Kingfisher.
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So for one, probably worth explaining Kingfisher, it's
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group retail company behind B&Q and Screwfix in the UK and trade
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Point Castorama, France and Poland in Europe and also Bricca
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depot, which is in France and Iberia as well.
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So just to give a bit of context there been with the business my
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third year now, which is flown by and essentially my my role is
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as head of payments. The way I describe it in sort of
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one line quite succinctly is responsible for all things
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payments performance and strategy across the group.
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So what are we doing now to make sure payments is sort of doing
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what it needs to and sort of the cliche driving value and not
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just working and then applying that sort of long term to what
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the group strategy and we call them banners just for context
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when I say banners instead of brands applying that sort of
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banner strategy as well. So just trying to look after
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things there and then sort of where I came from was spent a
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fair while at Worldpay before that.
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Well, I did all sorts. I joined in 2017 mainly to work
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on PSD 2, which obviously took me on a good long, interesting
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journey there and and worked across all sorts of things from
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product, strategy, operations and risk.
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So yeah, I've been in the industry now coming up to 10
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years, I think, which in fairness is most my career at
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this point. But yeah, it's been good.
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It's been really interesting. And you said that that merchants
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are finally recognizing that payment needs dedicated
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attention, which I guess is why we're seeing people like
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yourself moving from the payments industry into retail
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brands as as sort of payments leads, right.
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So what do you think has driven that change from them sitting
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under IT or Finance to having dedicated departments now?
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I think, I mean, I've, I've got a sort of obviously caveat.
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I'm not sort of maybe one of these people who's been in
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payments for like 20 years and sort of seen an enormous change
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from sort of kind of almost pre. It's not it's not pre E com, but
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I think you know what I mean. But in the last 10 years, I
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mean, I think you've really seen that not just growth of sort of
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share of Wallace wallet of e-commerce, but probably the
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number of levers that can be pulled within it to turn it from
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like say something that just works to yeah, a value driver,
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which is sort of the big cliche everyone, everyone throws
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around. And well, it's not, it's not a
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wrong cliche, but I think also certainly when I came into it in
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2017, largely sort of spurred on by PSD 2.
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I think what regulation has done and is doing is probably also
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subtly one of those things that's actually both creating
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opportunity, but actually in a way creating more complexity,
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which drives the need for people to come in and actually start
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looking at this in a little bit more detail.
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What typically goes wrong in kind of a large organization
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when payments isn't treated as a strategic function?
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I think it's mainly you just see the focus in in the wrong areas.
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Basically, you see that sort of legacy mindset of, well, let's
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just make sure the lights stay on and and keep it cheap.
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And I think cost is sort of probably one of the biggest
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areas that just gets too much weight from sort of people who
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aren't looking at it maybe how they should be.
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I mean the amount of people I've spoken to where just their focus
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is cost, cost, cost sort of and not even having any idea of what
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they're sacrificing because they're just so one track minded
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on it. So I think I think you get the
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focus in the wrong places. I think you absolutely see sort
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of certainly within merchants if they don't haven't had that kind
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of moment of realizing how important payments actually is
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to keeping the business sort of going and achieving long term
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objectives. I think you see it really under
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resourced within companies in terms of bringing people from
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the payments industry in into the company, not just having it
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being run on the side of a desk by finance or treasury or or
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whoever, whoever it may be. So I think sort of that internal
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organization perspective and then sort of where the focus is,
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is probably sort of two of the key areas that I think if you're
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not sort of addressing those points, then I think it's
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probably going to, I don't know, maybe it sounds a bit dramatic.
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It sort of creates a little bit of rot in a company that I think
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as the industry develops and regulation moves on as well, I
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think you can quite rapidly in the space of two 3-4 years find
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yourself sort of really quite far behind.
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And how do you think that payment payments ownership piece
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differs in, you know, mindful that you work at a really an
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enterprise level brand, right with with multiple banners, as
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you say, beneath the the sort of top tier.
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So you're a very large organization, but you also have
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different payment stacks. I mean you have to think about
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things in a different way to, you know, even not even you
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know, a small business that's a medium sized business, right.
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You guys are just at another level.
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Yeah, I mean it's, it's big. We're I mean we're one of the
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biggest retailers in in the UK sort of mainly behind sort of
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the big, the big supermarkets, but especially when so we've got
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a Federated model where we've got Kingfisher and then we've
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got the banners underneath and all the banners have got their
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own organizations up to CE OS of the individual banners.
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So it's, it's, it's Federated in, in that sense of they've all
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got control and autonomy over sort of what they're doing.
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And therefore sort of before I joined from a payment sense,
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they were all in silo making their own decisions around what
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are they doing for payment solutions and setups and
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architecture and all that kind of stuff.
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So I absolutely have like a patchwork quilt of, of, of all
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sorts going on, which certainly does make things.
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It's both interesting and and and and complicated at the same
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time, but it's been a, it's been a really cool learning
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experience the last couple of years.
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And moving from a big corporate acquirer like a world pay to
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being on the merchant side, what surprised you most from from
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from from that from that movement?
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I think I mean what I just said like the learning experience.
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So at World Pay, it was very much, I had kind of my role in,
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in my own sort of niche as it were.
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As I think most people who work at acquirers, they have their
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thing like even if you work in sales, like you probably got
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your vertical or something that, that you're working on.
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So you do generally have your niche and your specialty.
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And, and what I've really enjoyed being at Kingfisher is,
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is now all of a sudden being responsible for all of this.
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I kind of have to know a little bit about everything.
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There's so much breadth in what I've got to look into and look
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after, whether it's fees, whether it's marketplaces,
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regulation, like pretty much everything I've got to dive
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into. I mean, it has its drawbacks
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that it almost means there's nothing I'm going into tons and
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tons of detail. But at least I've, I've sort of
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got this really, really broadview and it's something
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I've really enjoyed. And certainly when I've thought
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about sort of my career long term, it's something I'm, I
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think I'll probably really struggle to let go of.
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Is, is having that sort of breadth and being able to kind
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of have sort of a, a finger in all the pies as such?
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Have you had to get to know ERP systems quite well as well?
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No, probably not quite got to that yet.
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I mean, yeah, probably. About it there then I think
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where do you think acquire is still underestimate merchant
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pain points having worked on the other side of the fence as well,
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now you're you're merchant side. I think, I mean, I think the
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pain points are going to differ a lot merchant to merchant as
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well. Like when you look across the
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verticals, I mean, the important distinction is, is there are so
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many different kinds of merchants, whether it's an
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airline, a big retail company like us, crypto or or whatever
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it may be. I think certainly when you look
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at kind of the big legacy merchants like us, I mean, we
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certainly don't move nearly as fast as I think a lot of other
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merchants can. And, and I've seen examples
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where perhaps acquirers or or other solution providers, maybe
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maybe they don't get frustrated, but maybe a little bit on the
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cusp of getting frustrated that we can't move as quickly.
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And then certainly when you think about what I explained
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with sort of our Federated model of, of if we want to do
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something, especially multi banner, then it creates a whole
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load of complexity. Because actually, if we want to,
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let's say we want to change something across the whole group
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is we're not changing something across one company.
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We're changing something across six companies simultaneously and
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getting them all to buy into that.
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And they'll all have their own nuances and, and, and little
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quirks that we've got to cater to.
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And so trying to do anything multi banner especially is
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really complicated and quite difficult to difficult to drive.
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So I think these are things that maybe some, some acquirers
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certainly on the face of it, if you're having initial
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discussions about things they, they won't have thought about
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that. It's only when sort of you
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really start getting into the weeds of it, they go, oh, OK,
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maybe this is a slightly different beast.
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But then flipping that on its head, having worked in payments,
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did you feel that when you went into Kingfisher, you were also
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able to educate the business on, you know, regulatory challenges?
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And you know, someone says to you, why can't that be cheaper?
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You you're like, This is why because they have interchange
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and scheme if it's not actually their base cost, you know, was
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that something you experienced as well?
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The the as much as we spoke about sort of my own education
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in it, yeah. Being able to come in and take
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something I when you've been in the, the industry, there's
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something to probably take for granted as being quite simple.
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And but then bringing it into a company where, yeah, there's
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there's not been this sort of big proliferation of payments
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expertise. And so bringing some of these
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quite simple concepts and trying to explain them and and yeah,
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educate is it has been, it's, it's been fun, I suppose.
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Yeah. And we we're really pushing to
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try and actually do a lot more in terms of home grown payments
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expertise as well. Like you look at, you could just
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go high from the industry or something like that, but we've
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got a, a number of people who were working towards, so the
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MRC, for example, is a great platform for sort of their
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educational material. And so we work with them a lot
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and we've got people going through that material working
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towards, they do the CPFPP and, and everything like that.
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So it's it's going to be really cool once we start getting the
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first couple of people who've gone from that, people who
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haven't come from a payments background and just from being
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in Kingfisher are going through this whole journey and and sort
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of working towards our milestone.
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So when we hit that, I think that's going to be really
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satisfying. If you can fix one thing of how
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merchants and maybe PSPS work together today, what would that
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be? I think my, it's, it's not so
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much what they work together on. It is a little bit, but my
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biggest gripe at the moment, which I think really hinders
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good partnerships in a way is data.
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So it's, it's actually one thing that almost coming back to the
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earlier question that really surprised me was how poor some
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of the data is that you get from sort of acquirers PSPS.
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It seems that those with actually good data availability
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and visibility, I think are actually in the minority.
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I mean, Worldpay had had a decent, decent product for being
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able to sort of put it in front of their merchants.
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And so I, I, I suppose I'd kind of use that as my benchmark
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because I hadn't seen anything else.
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Why would I have? And then I come over to
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Kingfisher where yeah, we work with a lot of different
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acquirers and gateways and it is certainly there's not a
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consistent standard across all of them.
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Like some of them I've I've got to create just bespoke.
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I mean, similarly for learning level, I've learned what some
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people say is basic like building my own models and and
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things like that because I've had to because these these big
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payments companies just for some reason haven't been able to
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figure out actually giving us our data in a logical format.
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There's a payments industry misconception around that there
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where we like to talk about customers just want it to work.
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They want a lot more than that actually.
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They want it to work. They want it to be fast.
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They want the data to be good and accurate and easy to
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understand. They want the UX and the UI to
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be really good on interfaces. Like there's a lot more to it
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than that. I think we can be a little bit
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narrow minded. I, I feel like the data side of
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things for me, it's such a basic requirement that in terms of
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certainly with working with anyone, you've got to have not
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just good data, but actually deliver it to us in a convenient
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and sensible way as well. And and if you're not doing
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that, I think it speaks volumes probably about the rest of the
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company as well. Definitely.
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I wanted to also talk to you about PSD three, yeah.
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And marketplaces, which obviously you guys sit into and
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the commercial agent risk exemption, our commercial agent
13:27
exemption risk, I should say that is a mouthful, that one.
13:30
Now interesting you saying you came into Worldpay PSD 2 and
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that was the start. We're now at PSD 3, right.
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So the next conjunction is is occurring.
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Why does this matter so much for marketplaces and slightly more
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complex merchant models? I think certainly what sort of
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I've been learning about, I mean, the, the PSDS in general,
13:52
they'll see massive things. And, and what we've mentioned
13:54
now the commercial agent exemption is one small part of
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it. I mean, you'll speak to some
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other merchants and they'll be focused on an entirely other
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part of, of PSD three that they're, they're really
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concerned and, and worried about.
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But for us, I mean, we've got 4 marketplaces.
14:12
And so being able to do that kind of horizon scanning of
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what's coming around the corner and, and making sure that we're
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adapting to what regulation is, is doing long term to make sure
14:21
our marketplaces continue to grow is, is really important.
14:24
And one area that we identified was, I mean, the commercial
14:28
agent exemption is, is to my knowledge, fairly widely used
14:31
or, or depended upon, I, I suppose across the industry.
14:35
And, and it's something that as much as at least at the point of
14:39
recording the, it's not been fully published by European
14:43
Parliament, but the way things are going, it looks like it's
14:46
going to be tightened quite significantly.
14:48
And, and so the sort of the flexibility being able to, to
14:52
depend on it does look like it's, it's going to, it's going
14:55
to change at the end of the day. And what we found, I mean, my
15:01
view and, and I've got a kind of caveat because I've spoken to a
15:04
lot of other marketplaces about this and, and views vary
15:08
enormously merchant to merchant, but everyone's sort of got their
15:10
view. They kind of stick with and,
15:12
and, and they run with, but our view is, is look, there's kind
15:16
of three routes for kind of, I suppose marketplace models in,
15:20
in a way at a, at a high level. And, and one is you're dependent
15:24
in some way on the commercial agent exemption and that grants
15:26
you a certain degree of flexibility. 2 is you've already
15:32
kind of outsourced that end to end to sort of another provider
15:36
and and you're not in any way sort of close to performing any
15:39
kind of payment services. And three is you've got a
15:41
license yourself, which gives you the most flexibility, but
15:44
obviously comes with with other obligations.
15:47
And So what we found was, well, if the commercial agent
15:51
exemption is being tightened and it can't be depended upon, then
15:55
everyone who is kind of in that bucket one has got to move into
15:58
bucket two or three. And so you got to kind of look
16:01
at, OK, well, what does that mean?
16:05
And, and start planning for what we think is probably about two
16:08
years time we think enforcement might be for PSD three start
16:13
planning for, for what that change might mean.
16:15
And I and in some cases, I think that change could be quite
16:18
significant for some merchants. And two years is not a lot of
16:21
time if they haven't figured that out already.
16:24
So it's, it's something that yeah, we saw and, and I
16:27
certainly picked up on and, and looking at the scale of the
16:30
potential changes needed sort of I've been relatively keen to
16:33
talk about it a little bit to in case there's any merchants out
16:37
there have gone. We haven't quite thought about
16:39
this yet. And yeah, there there is, albeit
16:43
not yet when it's published. And like say we think maybe a
16:46
two year enforcement period, they will eventually be a sort
16:48
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17:34
You think there's any assumptions that marketplaces
17:36
are making today that could prove quite risky?
17:40
I, I think, I, I think one of the assumptions is, is probably
17:46
that things aren't going to change or, or maybe that's just,
17:49
they've not sort of reviewed sort of the changes that are
17:53
coming and just assumed that this works today.
17:56
Why won't it in the future? I think one, one I've thought
18:00
about is, I mean, sure, I've not heard of penalties or anything
18:08
being handed out for anyone like falling foul of, of commercial
18:12
agent exemption or things. I've not heard of anything
18:14
actually being dished out. Doesn't mean it hasn't, but I've
18:16
not, I've not heard of it yet. But then one thing I think is
18:19
actually, if they're going to continue to regulate and clamp
18:22
down on these areas, then surely that's also an indicator of
18:27
they're going to apply perhaps more scrutiny on it in the
18:30
future as well. Like otherwise, why would you
18:33
bother regulating it if you're not then going to enforce and
18:35
scrutinize these things in in the future?
18:37
And so I think assuming that nothing's going to change or
18:42
things might change, but it'll probably be fine based on what's
18:45
happened in the past. But this all comes down to risk
18:46
appetite at the end of the day. And and some merchants will have
18:51
very different views of that than than others.
18:54
We like to delay these things as well, which maybe makes people a
18:56
little bit blase about it sometimes.
18:58
True. Exactly.
18:59
God, I can't, I can't remember how, how long PST 2 was delayed
19:02
in the end and then it had the sort of the sort of bit by bit
19:08
roll out, didn't it? Yeah, it took a long time.
19:10
We've done that. It was a fair few things in
19:12
payments to be honest with you, which brings me on to open
19:16
banking very nicely as a sub chat matter.
19:20
You know, you guys are in that open banking pay by bank
19:25
Dreamland, right, of high average transaction value
19:28
baskets in some of your retail brands, right.
19:31
So naturally a target for the the open banking platforms to
19:35
say, well, you can save a huge amount of money on those high
19:37
basket transactions. Do you feel like that's like the
19:41
default answer that that you're now getting internally as well
19:45
as externally? Like should we be looking at
19:46
open banking? Are we looking at open banking
19:48
because these high value transactions and there is a
19:50
deemed saving that can be made against traditional card payment
19:53
fees? I think for one, for pure
19:55
context is actually our ATV is probably lower than you expect.
19:59
It's like. I think between 50 and and 70
20:02
lbs in in the UK. Is that across all your brands
20:05
combined though? So do you not have some brands?
20:07
Yeah, without. Getting my laptop out and
20:09
reminding myself. But in, in, in the UK it's yeah,
20:11
it's around 50 to 70. And I think a lot of people
20:13
probably think we'd like DIY and homeware stuff.
20:15
You probably think people are going in dropping couple of £100
20:18
on on this and that and certainly trade customers and
20:21
and things. But it is I at least my view is
20:24
it's, it's surprisingly low than what I think if I asked you to
20:27
guess what the ATV was, which does diminish that sort of open
20:31
banking argument from a pure, pure cost perspective.
20:34
I mean, I think if you are at a high ATV merchant, sure, the
20:39
argument to do open banking from a cost perspective is there,
20:42
it's relatively compelling. But I mean, my, my view still
20:49
remains that I, we've, we've, we've looked at it and, and not
20:56
progressed it yet, I would say, because I mean, one, one part of
21:01
that is I don't believe that customer proposition is there
21:04
yet and it's not mature enough yet.
21:06
And I think, I mean, we don't really need to go into the
21:09
details of why everyone knows the headlines of, of, of that to
21:12
begin with. So it's something we've looked
21:14
at, it's on the radar. It's it's finding the right use
21:18
cases in my view because we're not that big high ATV merchant
21:22
at the end of the day. You know, that is interesting,
21:24
the value there I would have definitely guessed I'd have been
21:26
saying like 150 at least. If I was selling an open bank,
21:29
I'd be knocking on your door every day of the week.
21:31
It's lower, lower than you think I.
21:33
Suppose it's because you do have the average shell that comes in,
21:37
goes in and gets one tin of paint, right?
21:39
And might just screw 3 or 4 * a year, or literally screw,
21:42
especially in the trade world as well, right?
21:43
Because they'll buy one thing and then they'll have to go back
21:45
because they forgot something. Yeah.
21:47
Yeah, exactly. But in defence then of the open
21:49
banking brands that haven't knocked your door down yet, are
21:53
there risks that could emerge if if a merchant or a merchant
21:55
group become overly dependent on a single payment method?
22:00
Well, I think if you, if you look at, I mean, I've, I've
22:03
heard stories about like car dealerships, for example, who,
22:06
who are like, yeah, we only, only do open banking and things
22:09
like that. I mean, my view personally, like
22:13
I said with the customer proposition, I'll always put
22:15
something in my credit card if I can.
22:16
I'm almost a bit annoyed if someone doesn't give me and
22:19
they're really pushing pay by bank or, or just any kind of
22:23
bank transfer. I mean, we, we moved house last
22:25
year and my wife was getting, I think quite fed up with me
22:28
because we've had, we've done a little bit of work on things.
22:31
And so I had a few sort of fairly big bills.
22:35
She was getting really fed up because the amount of times I
22:36
was like, can you ask them if they take card instead, please?
22:41
Because it's, I mean, I, I would even go as far to say as I, I
22:45
would pay marginally, only marginally more to put something
22:48
on my credit card because. Of consumer protection.
22:53
Well, no, the, the honest truth is I, I play the points game
23:00
and, and try and sort of, yeah, do things right there is.
23:03
So that's the truth because I get some value back.
23:06
But I mean, I, I have, I'm not going to go into detail.
23:09
I can explain to you afterwards off the when we're not live.
23:14
I, I have had a situation where quite an expensive purchase has
23:18
gone wrong and I'm like, well, thank God for that because I
23:23
know it, because I work in the industry.
23:25
I'd insisted I'm putting this on my credit card at the time.
23:28
So like, I do have experience where, yeah, the customer
23:30
protection point is really important.
23:32
Otherwise it could have actually been a real problem.
23:34
Did the chargeback system work for you in that instance then?
23:39
It's not finalised, OK. There's, there's a obviously an
23:42
episode we've, we've recorded recently, we have an open
23:44
banking provider that I'd love to run in parallel to this
23:47
because the two arguments and besides that coin, yeah, are,
23:52
are very interesting to run in parallel.
23:53
And you know, the real reality of the chargeback system, the
23:56
legacy nature of it doesn't actually work.
23:58
It's basically, but you went straight in and said, I want the
24:00
points, which is a completely different argument.
24:02
So. Genuinely is the reason.
24:04
Like something that needs addressing in pay by bank is a
24:07
higher or higher volume of off the shelf points based products
24:12
to remove that narrative as well, right?
24:14
There's definitely there's an opportunity out there for
24:15
someone to go and be the a loyalty brand behind an open
24:19
banking provider, right? Yeah.
24:20
And it's how like figure out the model, how does it work.
24:23
And I think if you do that, I think figure out the customer
24:26
proposition, because sure, several merchants can go put it
24:29
on their check out. And, and, and it sounds like
24:32
I'm, I'm bashing open banking. It's I suppose to pay by bank.
24:38
I, I like it in the right use cases, like paying tax HMRC,
24:43
which normally you'd have been like, well, this is going to,
24:46
this is a government payment thing.
24:47
It's going to be terrible. But now actually doing pay by
24:50
bank on that, like it's actually, it's pretty good for
24:53
doing something like that. So certain use cases great.
24:56
It's just I, I kind of think there's a bit too much emphasis
25:01
on it. The end of the day that some
25:02
people look at it as this Messiah that's going to fix all
25:05
of our problems in the industry. And sure, long term, yeah, it
25:11
can. But you look how slowly it's
25:12
gone, the last, what is it nearly nine years or so,
25:16
something like that, I don't know.
25:18
So to get to the point where it is genuinely, I think what
25:21
people are hoping it's going to be, it's going to take forever,
25:24
I think. But do you look at those
25:25
redundancy rails? Obviously cards probably king in
25:27
your organization, but you guess you'll have invoice based
25:29
payments for B to B customers which they doing bank transfer
25:33
still some of them. We've, we've got all sorts of
25:35
things going on because I mean, yeah, we've got in store and
25:39
e-commerce, we've got huge consumer base as well as huge
25:44
trade base as well. And and you've got anything from
25:46
your sort of small independent tradies up to sort of really big
25:49
key customers. So yeah, how we accommodate some
25:51
of those does does change in all sorts of ways.
25:53
Would Omni channel infrastructure be a much more
25:55
more important thing for you guys?
25:57
Compared to pay by bank, yeah, yeah, there's, there's loads of
26:00
stuff that is a higher priority than pay by Bank for us at the
26:02
moment. So moving from kind of pay by
26:05
bank to to card payments, yeah, the schemes and the power that
26:10
they have, should merchants kind of be looking about how they
26:14
insure themselves against scheme dominance and kind of the
26:17
inflation fees that seem to happen every couple of years
26:20
from acquirers that they normally say is down to schemes?
26:24
I don't know. I don't know how much you can
26:26
necessarily insure yourself. Like sure speak about pay by
26:29
bank and people say well put pay by bank and you insure yourself
26:32
and that. But actually you're not doing
26:33
anything unless the customer proposition's there and you're
26:35
actually getting the adoption of it, it it achieves almost
26:38
nothing. So like actually in insuring
26:41
yourself in the schemes. I think from a merchant
26:44
perspective, there's our hands are kind of tied in a in a lot
26:47
of senses and there's a lot of areas where does feel like we
26:51
just kind of got to sit there and take it to a degree.
26:54
I mean, there are things we can do and, and there are levers
26:56
that can be pulled. I would, I would love to see
26:59
more merchants working together on something like this.
27:02
It's, it's something I, I certainly speak to other
27:05
merchants a lot about is how can, how can we work better and
27:10
certainly look at sort of various groups like the BRC who
27:12
can help facilitate stuff like this.
27:14
So I'd love to see more of that. And that's a way that it's not
27:17
really insuring yourself, but actually trying to maybe carry a
27:21
little bit more weight. Because, I mean, even what some
27:24
people would say are the biggest merchants, there's still very
27:27
little they can do with the schemes unless, yeah, you know,
27:31
Amazon's and ebay's, which there's been sort of public news
27:33
about in the past. Do you guys qualify for any of
27:36
the Visa merchant performance program type caps as well in
27:40
your business, even your wholesale businesses in your
27:42
book? Because there's been some
27:43
interesting stuff that's happened in that area right
27:45
around you said there's no high ATV, but if there is a wholesale
27:48
element to your portfolio, then stuff like that exists that can
27:50
help to cap interchange, right? Yeah.
27:53
So, so looking, looking at sort of commercial card into changing
27:57
things and, and how do we essentially make some headway
28:01
on, on what is a yeah, pretty big bill for us at the end of
28:04
the day because we got a lot of trade customers.
28:08
Yeah, VMPP it's it's tough because you've got A and I was
28:12
reminding, reminding myself it's it's you've got to have 50% of
28:15
your volume over 2 1/2 grand in the UK, which means you've got a
28:21
pretty high ATV. So sort of from what I said
28:23
earlier, it's yeah, we're we're nowhere near that or it's or
28:27
it's your commercial and it's only debit as well or your
28:30
business debit is only debit. Yeah, it's only business debits,
28:34
not credit. So even then it's still a very
28:35
small part you can actually influence.
28:38
But yeah, otherwise if your business debit is more than 75%
28:42
share of wallet across business and consumer debit cards.
28:46
So actually to try and qualify for it, I recognize a very low
28:50
number of merchants and actually volume that qualifies for it.
28:53
So yeah, if people are pushing that saying, Oh well, there's
28:56
things you can do for commercial card interchange, sort of raise
29:00
a bit of an eyebrow and go, yeah, it's quite tough to
29:03
qualify for that. Going back to what you mentioned
29:05
around marketplaces speaking more to each other, I've been
29:09
over the last few months been to quite a few events now where
29:12
definitely seems like there's, there's conversations going on.
29:15
But do you think that the the industry could be doing more to
29:18
to help one another when it comes to marketplaces and the
29:20
brands are sit and done? Marketplaces or merchants?
29:23
Merchants and marketplaces. Yeah, I, I, I absolutely think
29:26
so. I mean, I, I, I love trying to
29:31
get sort of certainly more merchants together and speak to
29:34
merchants. Like I'll take kind of any
29:37
opportunity to, to go and just chat to people and learn.
29:40
Because as well, like I said, I've only been on the merchant
29:42
side now for a couple of years and there's so many people
29:48
who've been doing this like their whole careers basically.
29:51
And so there's so much I can learn from them, which, which
29:54
has been fascinating. There's as even like 1 quite
29:59
cool marketplace opportunity, which it was actually chatting
30:03
to someone at Tesco's literally over, over a drink last year.
30:08
And I was asking questions being like, we got this problem, like
30:12
do you have any ideas? What do you guys do?
30:13
And we sort of talked about it and came away from that and we
30:16
basically had a solution, spoke to a couple of our partners, put
30:20
it in, hey presto, all fixed. And so just being able to have
30:23
those conversations and get people together, I, I think is
30:26
super valuable. And you've got obviously
30:28
European brands within your portfolio and there's a lot
30:31
going on with the EPI and we're and consolidation of local
30:36
payment methods or an attempt to consolidate local payments
30:39
across the, you know, the single market.
30:41
Yeah. How are you looking at that and
30:43
planning ahead for that at the moment as an organization?
30:46
I. Mean specifically like we're in
30:50
in Europe, again, I'd I'd say similar to pay by bank.
30:53
It's it's not hugely high on, on the priority list at the moment.
30:56
It's something you keep keep an eye on and see how it develops.
31:01
Obviously hand in hand with that is well, it's not hand in hand,
31:03
but similar vein of things is, is the digital euro and, and
31:07
what's going on there. So again, that's like a keep an
31:09
eye on it, which I think is, is really interesting, sort of more
31:12
like less from a Kingfisher perspective, but more on
31:15
industry level. Is, is, is what's going on?
31:19
Why is it, why is it being done necessarily?
31:22
And, and what do we think it'll look like in the future?
31:25
But yeah, from a Kingfish perspective, it's, it's a little
31:28
bit like I say, it's, it's trying to focus on what are our
31:30
priorities as a business, which I would say we're fairly still
31:35
fairly early on in kind of that sort of payments transformation
31:38
journey. So whereas I'm sure there's
31:39
plenty of merchants who are like great, let's be like really good
31:42
sort of early adopters aware or whatever kind of comes around
31:45
the corner. Like I said, that's sort of
31:47
priority list of, of the journey of taking payments from sort of
31:52
that legacy mindset through to sort of where, where it could
31:56
be. It's yeah, the priority list is.
31:59
Have you found managing? We talked about chargebacks
32:01
going, you know, Visa, MasterCard dominance in certain
32:04
markets and and other schemes Amex, but the dispute process on
32:09
some of the local payment methods in markets you guys
32:11
probably in very. So has that been something
32:13
that's been interesting for you to unpack when you again when
32:16
flipping over merchant side? I mean being being honest in
32:21
terms of that question, it's the dispute process on a market to
32:25
market level and different payment methods.
32:26
It's not something I've even been able to get into the weeds
32:28
of yet, even in in a couple of years.
32:33
So that's probably not a huge amount I can add on that if I'm
32:36
honest. Yeah, that's fine.
32:37
That's fine. What do you see as success for
32:40
marketplaces over the next kind of five years?
32:43
And the reason why I asked that we're seeing more and more
32:45
brands now becoming as merchants becoming marketplaces and
32:48
allowing more sellers onto their platform.
32:51
What do you see as successful industry?
32:56
I mean, I, I think so many, well, merchants, marketplaces
33:01
will, will vary enormously. So what success looks like for
33:04
them is going to differ a lot. I mean, you look at, so I mean,
33:08
one thing I'd, I'd saw on LinkedIn this week, last week,
33:11
it was another podcast, which I haven't actually listened to
33:13
yet, but they're saying how auto payments in Germany, which
33:16
obviously spun out of marketplace and they've got 250
33:19
people sort of had payments, well payments company now.
33:25
And, and so you look at like what they're doing.
33:26
And then when you compare that to us, like we're very much
33:34
thinking about, OK, how do we make payments sort of lean,
33:37
efficient, kind of high ROI for now and, and make sure we're
33:42
going after that low hanging fruit, making sure we're looking
33:46
to the future and, and, and planning for that now.
33:49
And then maybe years down the line, we start to look at
33:52
slightly sort of broader ambitions from a, from a payment
33:55
sense and in terms of where, OK, where's the value now?
34:00
So certainly if you compare us to like an auto, it's, it's,
34:03
it's very, very different. I mean, the, the goal for the
34:07
goal for me in relation to our marketplaces is I want to make
34:11
sure payments is enabling our marketplaces to grow.
34:14
At the end of the day, marketplaces is a really great
34:17
lever for our business to, to grow, which in fairness, DIY and
34:22
homeware is it's, it's not the most flourishing of, of
34:25
verticals and, and in fairness, we're performing well within it.
34:28
And one of the reasons of that is, is the marketplace.
34:31
So whatever I can do to help those other parts of the
34:34
business succeed and, and sort of for the, for the greater
34:38
good, as it, as it were fantastic.
34:40
Like I don't want payments to be the dependency that's holding
34:44
something up like going into a new market or whatever it may
34:47
be. Or like we say with regulation,
34:49
like I want to be on top of these things so that all of a
34:53
sudden we're not having this huge issue with our marketplaces
34:57
that's going to hinder growth or whatever we want to achieve
34:59
because we we haven't had the foresight to pick up on these
35:02
things. They kind of feel like the
35:04
future of retail, don't they? And I know they've been around
35:06
for a while, but I think it's just scaling and marketplaces,
35:08
just they're straddling so many sectors now.
35:11
It's really been fascinating to to watch the growth.
35:13
It remisses me not to ask this because I often talk about
35:17
Screwfix as one of The Pioneers of point of sale tokenization,
35:22
because they were doing recognition on card, identifying
35:25
the card holder and click and collect right and using that
35:27
kind of jewel token piece. How do you kind of manage the
35:32
day-to-day of having, you know, quite a large point of sale
35:36
estate as well as the, you know, the big e-commerce brands that
35:38
you're, you're operating and, and are they completely
35:42
different worlds to manage from a payment's point of view at
35:44
such a scale? At at the moment, yeah, I mean,
35:50
screw fix yeah, the the model is really cool.
35:52
Like it's all it's it's so much driven around it the customer
35:56
experience and and convenience. Like I'm a I'm a big fan of like
36:00
I would say if I started my own business, it would be based on
36:03
convenience. It'll be something that creates
36:07
makes life so much easier and I think that's what really gets
36:10
gets and going. I think that's what people
36:11
really love about Screwfix. But yeah, like you say, when it
36:14
comes to point of sale, I mean across not just Screwfix, but
36:17
all of our banners, I mean point of sale is it's still absolutely
36:21
enormous. Well, it's the majority of our
36:22
our sales at the end of the day. And sure Screwfix is the highest
36:27
sort of share wallet when it comes to E com versus point of
36:31
sale. And then probably be in Cuba
36:33
then certainly you look at our European banners and and like
36:37
very low e-commerce penetration at the moment, which I mean in
36:41
Venice, one of the the key pillars of of the overall group
36:46
strategy is, is we want to increase that, that e-commerce
36:48
penetration overall. But yeah, obviously trying to to
36:53
manage sort of that, that whole estate is, is a beast in and of
36:56
itself. That be enabling a better
36:58
experience for your customers as well as enabling a better
37:01
experience for the sellers on the marketplaces as well.
37:03
Well, yeah, when when you get onto marketplaces, I mean, all,
37:06
all the marketplaces are relatively new at the end of the
37:09
day. I mean, I think B&Q is someone's
37:12
going to call me out on this. It's a couple of years old or
37:14
maybe a little bit more than that now.
37:18
And certainly as it grows, being able to look at that seller
37:23
experience to help generate more seller growth on the marketplace
37:27
and, and, and let it keep growing and growing and growing.
37:30
Yeah, that's absolutely something where from a payment
37:32
sense, I want to go to our marketplace teams and say what
37:36
about this, what about this, what about this?
37:38
We can do this and that that hopefully should appeal to a
37:41
seller base, make it more appealing and, and, and help
37:44
that growth. So I'm always, yeah, trying to
37:46
look out for ways that, like I said, sort of at the start of
37:49
this is, is how can I from a sort of payments position help
37:54
enable like that growth? Because I think a lot of people
37:57
would look at it as well. You can.
37:59
You can do things that are like sort of purely payments to drive
38:02
value, whether it's through conversion or, or whatever it
38:04
may be. But actually being able to
38:07
unlock things for other parts of the business, I think is is
38:10
great as well. Nice.
38:13
Very good. Well, it's been a a brilliant
38:15
chat. We love having merchants on the
38:16
show. I think it just gives a really
38:18
different perspective to the industry and and how we look for
38:20
the the merchant's eyes because sometimes in payments it can be
38:23
a little bit forgotten about from from the merchant's side of
38:25
the fence. So we have a final section of
38:27
the show, the Shelf of Shame, where you get to nominate
38:30
something that really grinds your gears in payments fintech
38:33
business in general. What's your your nomination for
38:36
us today? Well, you've actually just, I
38:37
think alluded to it. I mean, first, like thinking
38:40
about this like #1 it would have been too cliched to say like the
38:44
sales side of things can be a bit bit of a grind.
38:47
Actually. The other option was going to be
38:49
what I mentioned before was the data side of things.
38:52
But what, as I say, you kind of just alluded to that merchants
38:55
can be forgotten about a bit is it's, I suppose if you can say
38:59
something to put on the shelf, it would be, you probably call
39:01
it like merchant disintermediation.
39:04
And people who know me well will have heard me talk about this a
39:08
lot where I don't think there's enough merchant representation
39:13
in certainly in circles like regulation or, or industry
39:17
groups and things like this, like you see a lot, a lot of
39:19
things going on without the merchants being involved.
39:22
And I really and I try and sort of put my money where my mouth
39:25
is, where it's put my time, where my mouth is on this and
39:27
and and give my time to these things and try and get involved
39:30
and and make sure that merchants are being represented.
39:33
Because in sure only my sort of two to three years of being on
39:37
this side of the fence. I I still think the whole
39:40
community could be engaged a lot more.
39:42
And in fairness, I probably got to say is actually there's a
39:45
little bit of, I think merchants themselves could do more to put
39:48
themselves out there and get more involved as well.
39:50
And I think it'd be really great to see that.
39:52
That's great cool out. Yeah, I do agree.
39:54
And it's interesting to mention that because sometimes merchants
39:56
don't want to put themselves there because they're worried
39:59
about them being sold to off the back of it, right?
40:01
Yeah, I think, I think there's that in fairness, one, one thing
40:04
for me is when I, when I came on to the merchant side is actually
40:07
there's quite a lot of insecurity of, of I joined the
40:10
merchant side and there were a few like things that I saw.
40:14
And I thought someone must have already spoken about this or
40:16
brought this up. And there was a little bit of
40:18
surely I'm not the only one saying this or talking about
40:21
this, but kind of getting over that hurdle and just kind of
40:23
getting out there and talking about what either you see you
40:25
experience on the merchant side. And and it's only been a
40:29
positive experience kind of just going for it in a way.
40:33
I mean, that's a great show call out.
40:35
I'm happy to put it on on the shelf of shame.
40:37
Well, thank you very much for joining us today.
40:40
I will ask where people can get in touch.
40:41
It might be risky with our followers to tell them exactly
40:44
where you are. You might get sold to a lot, but
40:46
how do people contact you? And and find out more about
40:49
Kingfisher as well. Yeah.
40:51
I mean, in terms of finding out about Kingfisher, go into our
40:54
stores, buy some stuff would be would always be a great thing to
40:57
do. I mean, yeah, I'm, I'm on the
41:01
normal things like LinkedIn. I mean, I'm not exactly posting
41:03
much on LinkedIn in in fairness, but kind of what I said earlier
41:05
about being in person, I I try to get out and about to sort of
41:08
a lot of events. I mean, we're speaking early
41:10
about we'll probably see you guys next at MPE.
41:13
We will do that. Like suddenly tonight I'm at MRC
41:16
connects event and so just you'll probably see me around.
41:20
Brilliant. Well, thanks very much for
41:21
joining us on the show. Thank.
41:22
You very much guys. Bye bye.