Sunil Gossain, VP, customer success at Token explains what constitutes customer success in Open Banking payments, why more needs to be done to educate consumers on A2A payments and what Token is doing to drive the shift away from traditional methods of payment.
1. What is your background in payments, prior to joining Token?
Previously, I’ve worked predominantly on the issuer processor and network side of the payments industry while at Visa, Amex and Fiserv.
In all of those roles, my work focused on digital transformation in payments. At Visa, I worked on the early iteration of Visa Direct, a peer-to-peer payment service. At Amex, I was focussed on how a PSU’s digital footprint could be used to make better fraud decisions. My role at Fiserv centred on how digital improved the cardholder experience through enriched transactions and better insight, control and configurability.
For me, working in Open Banking is a natural extension of my digitally-focused career: using digital technology to circumvent traditional payment intermediaries so that consumers can make direct payments from their account to a merchant account with all the commercial and experiential benefits this provides to both parties.
2. What does your role at Token entail?
The mission of the customer success team at Token is to help our clients achieve their commercial goals through the use of Token’s technology, expertise and the unique insights we’ve gleaned as the leading Open Banking enabler for the payments industry.
Token’s strategy is solely focused on the provision of our Open Banking infrastructure and expertise to banks and PSPs, so they can offer this payment method to their clients.
That means that we are a B2B2B2C company: Token-to-PSP, PSP-to-merchant, merchant-to-consumer.
It is therefore essential that we are involved in helping our clients achieve their strategic and commercial ambitions in adding Open Banking as a new payment method.
For me, this starts with understanding the context. Why did our client choose to add Open Banking payment services to their portfolio? What targets have they set for merchant adoption and transaction volume? Are these targets realistic, too conservative or too optimistic? What is the net margin contribution for Open Banking payments compared with cards and other payment methods?
Once we understand the context, we can provide support, which ranges from developing sales and marketing collateral, to supporting go-to-market and commercialisation activities, to sharing best practices.
An important aspect of customer success is providing advice and guidance to PSPs’ merchants that are launching Open Banking, to help drive consumer awareness and adoption of A2A.
3. Can you explain what ‘customer success’ in Open Banking payments looks like?
Analysts have said that account-to-account payments (A2A) will account for a significant proportion (10%+) of all payments within a five-year period. If we can ensure that A2A is widely understood and subsequently adopted by consumers, and not considered an ‘alternative’ payment method, but rather a ‘mainstream’ payment method, that would constitute customer success.
4. Do you feel TPPs and merchants are doing enough to promote Open Banking as a primary payment method? And, if not, what might be holding them back from doing so?
No, but I can understand their reticence to do so. Across Europe, we have different user experiences when it comes to A2A payments, and varying – but steadily improving – success rates. Despite the obvious benefits that A2A offers to merchants (reach, faster settlement, lower costs and higher conversion) I think there’s a reluctance to really promote A2A until a consistent UX is offered.
Where A2A has been deployed, more needs to be done to educate consumers on how A2A is an easier and more secure way to pay. This starts with providing the consumer with clear and concise information on the checkout page, as well as possible incentives to try an A2A payment for the first time.
5. What can PSPs do to drive the adoption and awareness of A2A with their merchant customers, and how should A2A services be offered?
The main challenge for PSPs in this market is identifying the most efficient and effective strategy for launching Open Banking payment capabilities, while generating the highest revenue and greatest margins.
For some time, PSPs have been squeezed between the card schemes’ rising fees and merchants demanding lower costs. The result is that PSPs’ margins are eroding.
A2A offers a lower cost payment option for merchants when compared to cards and other payment methods. As merchant and consumer demand grows for this low-cost, secure, frictionless form of payment, in Token’s view, this leaves payment service providers with three choices:
- PSPs can do nothing — and potentially risk losing future A2A revenues;
- PSPs can aggregate local A2A payment APMs (incumbents like iDeal, Giropay, and new entrants like Klarna Kosma, etc.) However, these pay notoriously little back to the gateway, risk cannibalising existing revenues, and result in a congested checkout experience;
- PSPs can work with a partner like Token – which has white-label capabilities – to launch their own “private label” Pan-European A2A payment solution. This is how smart payment providers will deliver streamlined checkout experiences, generate the highest revenue and margins as they deliver the Open Banking capabilities that merchants increasingly demand, and protect the primacy of the merchant relationships.
6. At Token, what will you do to help drive the shift from traditional payment methods to faster, fairer, frictionless Open Banking payments?
Token is focused on the provision of our Open Banking infrastructure and expertise to banks and PSPs.
We know that if PSPs are to make A2A a default payment mechanism on their merchant checkout pages, there may be technical, commercial, contractual, compliance and resource barriers that need to be addressed.
As Token’s VP customer success, my job is to identify these issues and work collaboratively with our client partners to remediate them. Once achieved, PSPs, their merchant clients and consumers will all benefit from faster, fairer frictionless Open Banking payments.