Today we bring you a new podcast!
We take you behind the scenes of e-commerce, with an interview with the Vice President, Development and infrastructure Support at JCB International (Europe) Ltd: Andrew Mitchell.
With him, we talked about future of Payments: challenges and trends. Discover his vision of the market in this new podcast format that we´ve inaugurated in ECN.
Alfredo: Hello everyone. One new week. We’re really happy today we’ve got one lovely interview with Andrew Mitchell. Andrew Mitchell from JCB international International. That’s right. I’m doing great.
Andrew: I’m very pleased that you introduced me as lovely. That’s lovely. You call me lovely. Let’s have a great love Yes sir.
Alfredo: So Andrew Mitchell is the vice president and developmental and infrastructure support at JCB International. And we’ll be talking with him about payments and future of payments. We’ve both recently been at Merchant Payments Ecosystem in Berlin. From my side I had a lovely time I don’t know about you.
Andrew: There’s a lot of partners there it’s a very good networking experience and I really enjoyed it. I think we could see everybody’s concerned about PSG too. Great. I think we’d like to keep going more and more and we.
Alfredo: Especially like it it’s one of our favourite events as well for me from commerce nation we always every year partner with them as media partners and every year we keep learning and the value itself will all of the keynotes is really good. Great. So let’s not waste any more time. And what. First of all I think it’s most interesting if you introduce yourself. You give us a quick intro to JCB and we’ll take it on from there. So Andrew all in your hands.
Andrew: Thanks Alfredo. OK. Andrew Mitchell vice president development and infrastructure support that JCB International. So that’s twice what we said. We didn’t get stuck. That’s great. That long job title but JCB Japanese originated a global card schemes nearly 60 years old actually it’s originated in 1961 as a Japanese domestic entity kind of operating its three party model card scheme as an issue to acquire a processor developing and proliferating card acceptance in Japan. It’s internationalise this business really from the early 1980s and look to build and acquiring and issuing network globally which I think originally was more intended to service Japanese car members and their outbound travel but actually as we’ve grown organically has become also geared to becoming a bit of a behemoth in terms of the issuing market in Asia-Pacific. So actually we’re growing our business in terms of the issuing side I think we increased 40 percent of our issuing non Japanese originated issuing in the last five years. So I think we’re growing exponentially there by collaborating largely with domestic entities card schemes and central banks particularly in Asia Pacific. And actually we’re starting to school out even beyond that. So we’re now starting to issue in Russia we issue in Brazil and really we’re spreading that JCB message that uniqueness that we have as a brand and a real good customer service ethos as well as you know from a European perspective what I’m doing here is to ensure that we have adequate infrastructure to provide all different levels of service to our card members be you know face to face process transactions more and newer ways of accepting via the Internet. Even down to ATM acceptance you know anything our customer wants better service or be it a form of payment.
Alfredo: That’s what we aim to offer. So I hope so now a bit more clear for everyone at least there is for me. I’ve got a simple question with a complex complex answer. I think so. Well what do you how do you feel the future of payments is going to be by 2025 / 2030. Where do you see the future payments going?
Andrew: Well where where do we start. So I think to unpack that question I thought you know I think I can keep it relatively simple and you know when I look at how payments are evolving now I think we in Europe seem to be ahead of the curve maybe you know in the Gartner hype cycle with definitely the early adopters so I think we probably have a slightly warped vision of what payments might look like and I think standing back from JCB and seeing different elements and luckily you know in my role I get to interact with a lot of our company branches and regions and I get to see you know different maturity levels in the different sort of expectations from consumers. So I see a very very diverse payment market. If I stand back and look at the whole sphere so by 2025 I think Europe will still be Europe right. It will still be quite far ahead moving more towards an instant payment ecosystem. Maybe the card schemes have to evolve with that but maybe empowering the banks a little bit more towards owning their own payment ecosystems but still supported by what we today would see as card schemes. But I would probably call payment networks I think internationally speaking. I think we will start to see a proliferation of of those methods occurring in spots particularly the more mature payments markets will start to adopt and adapt in a similar vein to how the Europeans are doing it. But I think the diversification of payment methodology is real. Really the key thing and I think we would just end up finding more new innovative ways to pay. So instead of you know just cash, card or bank transfer you might start to see 10 or 15 different ways to pay so maybe the headache I guess is more for the retailer side.
Alfredo: Just this as you mentioned and I think innovation is the key for the next the next year. And we both we all know that technology is pretty much an enabler to allow consumers to get what they need. So how is the JCB innovating in terms of technology as well. We’re talking to is a feature that’s going to be like a complete different range of payment offers for the merchant. So how how you guys doing it to keep innovating and driving innovation to its payments?
Andrew: Well great question everybody’s you know looks at R and D sort of being the B on end when I think, to be honest you know you have to look at how you’re deploying R and D. R and D now you know you can easily throw money at different fads and trends but I think for us one of the things that I always enjoy about working with JCB is that we’re pretty smart in where we invest our time. I think now, realistically speaking maybe talking about specific cases JCB is very much of an e-commerce footing in Europe. We want to be that gateway to Asia, I think having spent many many years working in JCB actually coming up to my 20th year in JCB. So I think we are trying to really position ourselves as a gateway towards the Asian market. Like I said our core issuing base is in Asia Pacific. I think we have a hell of a lot of value there particularly on the e-commerce sector. Maybe it’s taken us a little time to really activate our proposition in terms of technical connectivity to be able to really facilitate. That’s a very simple manner for retailers outside of Asia to connect into Asia.
Andrew: So I think we’re really now trying to transmit what JCB is as a casket to retailers outside of Asia and ensure that we offer simplified means of connectivity to ensure that anybody can set up and accept JCB in a very easy way. And probably the way to do that I know it’s a big buzz phrase everybody’s hearing in this new sort of host PSG two world is API. I think that really has opened up a door for us and can really reduce the setup times and the difficulty in programming to integrate JCB. I think another thing that we’d like to do is to really move payments towards being seamless. And I know everybody’s obviously looking now towards an m commerce oriented market you know everywhere in the world. I don’t think Europe is necessarily alone in that vein but we particularly are looking towards biometric methods of transacting. You know we can almost leapfrog mobile if if need be because you know in the end what better payment method could there be that yourself you know you can’t forget yourself and your batteries won’t run out. So I think that’s probably a way forward for us.
[00:08:58] Yeah that’s totally true. I would as well. I mean we were both last week in Berlin for the 8th for the NDP as we mentioned and one thing that surprised me was they’re still billing it’s quite cash cash cash city SSA cards and there’s not that level of acceptance of of cards in in Berlin or in Germany as a whole I would say.
[00:09:24] Why is cash less inclusion so gold still in some countries.
Andrew: Well I think Germany is a very specific case and having lived there as well myself for a certain time I was able to tap into that and I had my first shocking experience moving there and going to a furniture store and I’m actually trying to use a debit card a UK based debit card to make payments on my furniture and then actually being told No please cash. I know it’s crazy. But I think you know that’s very culturally specific to Germany that they have a very strong debit network. So even when retailers do accept cards they prefer the local domestic scheme. And that’s why I said JCB always positions ourselves to cooperate well with these domestic schemes. You know we’re quite happy for them to flourish in their markets. So I think there’s maybe even a level of cultural preference towards cash. You know it’s it’s something I guess maybe even Big Brother can’t watch is something that people feel comfortable with having in their pocket. You know we see that even in certain markets. I think even in our domestic our home market you could say even in Japan now it’s still quite heavily a cash country. But to be honest I think as I said you know we like to offer all or capacities to our car members. So if a car member wants to use cash that’s fine you can use your JCB to get cash. So I think we have to be a facilitator but also if we put the other hat on and say that we’re a card scheme and we want to proliferate car payments or biometric or mobile payments actually the sort of persistent usage of cash shows us the potential growth margin. So you know we look at that as some form of encouragement we want to help people towards a more convenient form of payment if they feel cash is the most convenient then so be it. No problem if they feel its card biometric and great we want to offer them that too.
[00:11:20] You know it is true what you were mentioning that what it takes to be one of them one of the best things or one of the good things that JCB is doing is this partnering or partnerships with the local local entities.
[00:11:32] So the best examples that we have as well which are OK they’re not European base but in Australia New Zealand and Canada is through a partnership with American Express. And in the US it’s through Discovery Network as well. So I think like same same as happened in Europe with especially in Europe where we’ve got I think it’s 27 27 different countries.
[00:11:54] We’re 27 28. I’m not sure it is on the way
[00:12:00] There are 28 different accredited languages.
[00:12:02] So it’s totally different as well for love for a card entity to get into each.
[00:12:07] That is a different market and as well because of the amount of regulations that European or the European Union is bringing every week every month that means that people have to totally keep themselves updated. And as we mentioned before open banking then we’ve also got the interchange fees regulation which apparently was meant to bring some benefits with it. So yeah. So I’ve got a question which I don’t know if you’ll be able to help us. Sometimes some people here the combination or I’ve been reading some some comments on some articles that within the past week either one on payments thing not it’s block chain. I don’t know what you guys are doing in respect to block chain and if you’ve got any future plans you’re currently working on it. I think that maybe you can give us a better some better in-house feedback on this topic but it’s always something that’s interesting and people seem to be really interested and has it is.
[00:13:12] And it’s you know methodologically for us very interesting you know if you consider you know everybody says Okay JCB you know AmEx Visa MasterCard union pay discover we’re card schemes right.
Andrew: But actually I tend to stand back and as I mentioned before I think I look at us as payment networks and really what we do is obviously we provide a liability distribution between different stakeholders at either end of the chain you know the payment user or the Payment Recipient. And we operate you cryptographic network that is there and is you know breeds confidence to everybody in terms of the level of cryptography involved to ensure that our payment information is kept secret and kept protected. And then we also have the safeguards of disputes when things do actually go wrong. Everybody understands what they can get and what they must do to fulfil their end of the bargain. So for us when we look at BLT I think that’s a very interesting area you know suddenly does that change the modus operandi for us. So it’s something we’re looking at. I’m not going to sit here and say that you know we’ve got particularly particular farm with it and certainly we have partnered with one particular partner but that’s kind of more off the record so I won’t go into too much detail here but we have looked at potential usage cases for it.
Andrew: I think the main thing for us is obviously to make sure that something is scalable and speedy you know when we look at the networks that we already have that they’re fit for purpose. So I think if we have something here that makes integration easier and makes commerce easier I think we will adopt that a good thing for us is that we kind of had this weird model over everybody looks at JCB and Visa or MasterCard sometimes they look at this as the same animal you know in terms of the full party card scheme operation but actually we kind of do a bit of both. So in Japan, we have a processing network and I think if you’re going to see a development for JCB on block Jane is probably going to come out about domestic processing background because we have to be able to offer many different capacities to our issuers and to our acquirers. So you could find a future that Bush-Cheney is one of those. We’re certainly not sleeping on it.
[00:15:24] Yes. Always good to know.
[00:15:26] So guys Jason is not leaving on block chain comfortable pillow it’s too blocky today just in case.
[00:15:35] Good good good good.
[00:15:36] So I’d also I was reading a JCB in Europe was extending its reach through JCB payment systems which I think you’ve already mentioned or semi left in the past.
[00:15:51] What is they say. What benefits does it bring.
[00:15:55] What I don’t know maybe you can tell us a bit more.
[00:15:59] Ok let me let me put my old man hat on and say once upon a time we think I mentioned near the start actually sort of in the early 80s we really had to go out and build an international network of acquiring one by one.
Andrew: So actually in Europe particularly there was one guy based the U.K. that went to Japan started up JCB as a franchise for Europe and he actually had to go out with his briefcase and a plane ticket in his hand and travel around Europe and say hey come on. This is the future JCB get built up and acquiring network of of partners. And today we do pretty well in terms of country coverage. Certainly we’re servicing very well for the TNA sector and I think JCP still is quite popular in the TNA sector. So airlines hotels restaurants transit systems these are the kind of acceptance that we prioritize. So we have to look at that sectors in particular countries now as we’ve diversified our issuing portfolio we’re finding the typical sort of footfall patterns of what a JCP card member is is changing. So particularly with JCC you know is a very top player in the Cypriot market we absolutely recognize that once we start issuing to a great degree in Russia the Russians do travel a hell of a lot to Cyprus. So we look at the footfall pattern changing and we see that there is demand we naturally have to go in and talk to the biggest player in the market. And luckily for us JCC was a very co-operative partner. And yeah that’s that’s how it all came together.
[00:17:33] So as well I have to say it was not an easy question.
[00:17:40] We’ve seen as well in the last couple of years that especially with fintech and this online banking that’s coming up.
[00:17:50] So we’ve seen in 26 we’ve seen revenues here in France we have seen contour for our company businesses. What do you see in each of these companies because you are yourself experts in fintech. I mean at the end of the day what they do is they have a fantastic user experience and user interfaces which is what brings in the region badly.
[00:18:15] But what you see when you really see this because I mean the best the best example I always put is tomorrow I’m going to buy a house and I’m not going to go to one of these companies and ask them for a loan asking for credit. So what is your or your feedback on. What’s your feeling on this kind of companies to us a feature.
[00:18:34] Very interesting. And you know having sat down and talked with some of them obviously we see a certain hype around fintech and we obviously want to separate the wheat from the chaff. We want to make sure that okay we’re positioning ourselves and that we’re continually being able to service what we would see as our clients.
Andrew: Now you know who are our clients our clients could be a merchant could be a bank and acquirer. We know today a terminal handler. And it can be a card member. What we see is a card member today. Now think you know we have to keep it relevant in the market so you know we certainly don’t ignore any anything. We talk to these guys the FinTech providers the hype names let’s say but in the end I look at this from a simple consumer level. And I don’t know about you whether you agree with this or not but I would say that a lot of people don’t seem to really revolution or revolutionize their salary being paid into a particular bank account. Now whether it’s you know a neo bank or a traditional bank I’m not really sure at the moment. But I think I still see that as a pattern. So for us you know we don’t worry too much because what we are trying to do is facilitate people being able to spend their money. To me is interesting is potentially the other side of the equation to say okay what is a merchant. Is there an acquirer involved in the chain. We just have to make sure that a retailer is getting paid.
Andrew: Right. That is the ultimate recipient of the money and you know the guy getting his salary paid into a bank be a neo bank or a traditional bank as long as we’re able to service them on both sides of the equation. I think okay but I am very interested to see what is the future process device in an acquiring relationship and that to me is very interesting if we look at open banking as a topic obviously we could see the move towards a grab by banks be it neo banks or even the traditional banks developing the API is quickly now to grab the merchant relationships. Now that’s very difficult. And I come back to our charming English chap with his briefcase and his plane ticket. It takes a long time to build that network and a lot of trust is needed and trust can be broken if not yet can be broken in an instant. One outage one mass data breach and all of a sudden you’ve got a problem. So I would say you stick with the tried and trusted in terms of the payment networks with banks hey now I’m quite happy to try both and see which ones best value for money.
[00:20:59] At least until we see well how do the able to the feature. What happened. No it’s true that as you say for me if I need to get paid I’d always prefer to guess my weight fate on a still traditional ask to call a banking account. Good good good. So as well. We met at the MP others as well any other events where you guys are going to be I know for example that for money 2020. What is happening in Europe in Amsterdam as well.
[00:21:31] Your responses to this about to have to sharply plug us for that. Yeah absolutely. So I think again we’ve had a presence of money 2020 and in Europe for the last few years so last year we were five star sponsors are we going to do that again. So yes third to fifth June come and visit us. JCB will have a pretty large Booth. It’s looking quite funky in the design phase at the moment so we’re open for business and we’re very happy to meet people there.
[00:21:57] Pretty much recommended as well money 2020.
[00:22:00] Definitely Europe’s launch its largest fintech event and JCB I’d say as one of the biggest sponsors of the event. OK well so with with all of this set under you I don’t know if you want to say something before we finish the podcast recording address the audience with a particular message. So if your message would just received like make sure you spend your money we’re gonna get just about Jesse.
[00:22:32] Definitely definitely. Great.
[00:22:34] So you know thank you so much for being with us today. It’s been a real pleasure having you. For anyone that’s interested as well.
[00:22:42] You can visit directly adjacent based Web site Bissett and attend the money 2020 Europe of which e-commerce nation is also a media partner with all directly get in touch with the choice of Europe.
[00:22:56] Job would be the ideal way I would say so. Andrew thank you very much. As I said it’s been a pleasure.
[00:23:05] And for the rest I’ll see you next week with one new port cost and have a lovely end of week.