Leveraging Technology for Holistic Payment Services

David McHenry, Managing Director, Head of Global Treasury and Payments Advisory – EMEA, Silicon Valley Bank

What are some of the major challenges and trends that have been impacting the Payment and Card space lately?

• In the UK, Secure Customer Authentication for eCommerce card transactions is one of the most notable areas. It has become a bit of a moving target for banks with extensions until later this year.  This mandate steps in an extra level of security with memorable passcodes, dynamic pin code, or biometric into some card transactions performed online. Getting this implemented for merchants and card issuers has proven challenging. While it will bring an additional level of security using these out-of-band security techniques to online purchases, those same techniques will disrupt what was a very straightforward checkout experience
• Additional areas have been the ongoing enhancements to local and global payment rails. Whether that is:
  • the implementation of IS20022 standard for "universal" payment file formats,
  • the emerging real-time payment schemes in large economies like the US,
  • Global non-urgent/low-value clearing schemes,
  • Push to Debit become very important for mass-payout issuers
  • These are all pushing financial instructions to focus on near-constant platform development and deployments, while many forward-looking institutions are in some state of core platform development and conversion. 

With money movement comes risk, and with complex money movement comes exponential risk

What keeps you up at night when it comes to some of the major predicaments in the Payment and Card space?

• I would say the rate of change and the need to continue to offer holistic payment services to our clients. We are fortunate at Silicon Valley Bank to have some of the most forward-looking and innovative companies as our clients. Day in and day out, we are pushed to deliver scalable and innovative solutions.  That speed of innovation is relentless and exponential.
• Risk also keeps me up at night. Payments are ever more complex. We are far from the central clearing houses of the old days and now managing complex clearing, vendor, and partnerships locally and globally. Add in complex clients that are marketplace platforms or third-party senders, and you have a level of money movement that is multi-faceted through the use of different payment rails and value-added partners. With money movement comes risk, and with complex money movement comes exponential risk. However, I'm excited that we can access more information and tools than ever before to build more holistic, far-reaching, and embedded risk mitigation processes.

What are some of the technological trends which excite you for the future of the Payment and Card space?

• The move to more agile architecture and powering better integrations. Embedding and integrating solutions are baseline expectations. Whether that is loading account data into personal finance or business accounting platforms or building better bill payments or complex payment acceptance platforms. Initiatives like Open Banking help drive that for the average consumer or small business. Still, equally larger companies are becoming more sophisticated and looking to work with API-driven platforms and move away from the past's complex manual or batch integrations. Additionally, I'm excited that the aggregation and direct-developer platforms powered by APIs will allow for ever more significant partnerships that we can develop.