While the focus in the media and on trade shows was the ongoing wave of digitalization, there were big changes in the Payment Industry happening in the background. It all began with the German firm Concardis, previously owned by German savings and private banks and now sold to the investor-duo Bain Capital & Advent. A few months later, Ingenico Group took over Bambora, previously held by Nordic Capital. Nordic Capital bought several payment firms between 2014 and 2015 in Scandinavia, such as Euroline, KeyCorp, Samport, MPS, DK Online and ePay. These were then bundled into Bambora and are now owned Ingenico. Switzerland is transforming as well: This year in August, Aduno sold their acquiring business to SIX Payment Services and later it become public that the SIX Group is looking for an investor to sell their Merchant-Business.

I must say, I am a little bit amazed that the banks in Europe and Switzerland are waving goodbye to the VISA and Mastercard Acquiring Business and to the card present, e-commerce and mobile solutions associated with it. I was convinced that it was very important to the banks to have control over the “non-cash money” in retail. A consolidation was certainly expected, but the total sell-out away from the banks towards investors and multinationals still surprises me.

The role of the banks

Okay, we all know that the banks are not the leaders in innovation and digitalization. In respect to the merchant business, they were rather concerned about stability and availability. They invested a lot of money to maintain the stability of the financial services and prevent form system outages. In my understanding, payment networks are system-relevant for countries and therefore deserve special protection. Failing payment networks can cause major instability in domestic markets. After selling the merchant services business, the banks lose the control over these systems and their uptime. Why is the control of payment networks not as important as it was in the last years?

I am asking myself what will happen when there is an outage in the future and transactions at the point of sale and in the internet suddenly won’t work? In the last 35 years, you can count such failures in Switzerland and Europe with one hand, there were so few. Will this quality stay the same with the new ownership structure?

Also, why are the banks so willing to separate themselves from this market? We will discuss this topic at our annual Payment Arena on 12^th of April 2018. Until then, there remain a lot of unanswered questions for me and lots of industry experts. For example:

• Are the margins after the interchange reduction so low that the industry must reinvent itself?
• Will VISA and Mastercard be pushed out of the market because of new mobile payment solutions by the tech giants?
• In the future, will acquirers and solution providers be considered as system-relevant by the banks?
• Will PSD2 completely change the non-cash payment industry?

As we are waiting for the turn of the year one question is especially bothering me: “What does the selling and merging of big enterprises to even bigger enterprises, away from banks, mean for the necessary changes in the industry?”

Yet, the hope remains that in 2018 future projects will help retail businesses to improve the simplicity, speed and security of the increasingly complex domain of payments with the numerous new and old methods of payment.

On this note, I wish you a peaceful and relaxing Christmas season and a Happy New Year.