Our Payments Manager Duncan McEwen talks to Marc Docherty, Head of UK Acquiring at Worldline.

The Final Policy Statement sets out the PSR’s intention to introduce both contractual and disclosure remedies to the acquiring market during 2023 aimed at helping retailers switch card acquirer. The final remedies include:

• A maximum duration of 18 months for Point-of-Sale (POS) terminal lease and rental contracts, and maximum one month notice after any renewal (due January 2023)
• Summary boxes containing bespoke key price and non-price information to be sent to each retailer and made available online; and online quotation tools to be made available (due July 2023)
• Trigger messages to be sent to retailers to prompt them to shop around and/or switch. The timing of these messages will be linked to minimum contract term expiry dates or, where contracts are indefinite, will be provided at least once every 30 working days (due July 2023).

We have been proactive in our engagement with the PSR during the course of the market review, holding the regulator to account on evidence base and the proportionality of its approach. The timescales for implementation are short, but we will continue to work with our members as best we can to help manage their delivery.

The PSR has focused its remedies on fourteen acquirers / PSPs through specific directions (representing 95 per cent of the market). Recently we spoke to Worldline to get its perspective as an acquiring organisation sitting outside of the directions, but one which will be impacted by the changes to the market overall.

DM: How will the acquiring landscape change with the introduction of the proposed remedies?

MD: I believe these remedies will allow merchants to switch acquirers more easily. Indeed, retailers understanding when their contract is up for renewal. Having access to comparison tools and greater transparency around pricing will help to ensure it’s easier to negotiate more competitive acquiring contracts. The contractual remedy is designed for merchants with a turnover below £10 million, so it is intended to protect the SME market specifically. 

Once the remedies have been rolled out with UK acquirers, and merchants have become familiar with the associated benefits, it is likely that there will be increased pressure for other payment acceptance types to adopt the remedies to offer choice, flexibility and remain competitive.

DM: One of the interim remedies proposed was Point-of-Sale (POS) interoperability. How would this have impacted the market?

MD: Our key role in the UK terminals market highlights to us the use of cards as the primary retail payment instrument of choice for most consumers and merchants.

The notion of POS interoperability – to have all terminals made reconfigurable to encourage the concept of ‘interoperable portability’ – has thankfully been dropped. The complexity and costs associated in making such a change and the process of having this standardised across a range of differing systems, accreditation standards and proprietary technologies and solutions would have been a huge task.

The diverse range of terminals already available demonstrates how dynamic and competitive the terminal manufacturing space has become. New acceptance devices and solutions are being offered by established players like ourselves, as well as other newer entrants such as new cross border acquirers.

In the future, POS terminals will need to service a range of payment channels (e.g.: Open Banking and crypto) and transaction environments as newer use cases come to light (e.g. electronic vehicle charging).   

DM: Given your unique offering (in being both a terminal manufacturer and acquirer) do you anticipate this hybrid approach as a growing trend?

MD: Worldline has several decades of experience and expertise in manufacturing terminals and many UK acquirers today rely on us to provide them with devices. I believe it is unlikely that other acquirers would look to do so in-house.

Having a large market share, and working with a number of other acquirers, provides us with a unique perspective and allows us to better understand merchant requirements when providing an end-to-end solution. 

Download Worldline's 2021 Integrated Report.

For more information about UK Finance’s work in and around the Acquirer Market Review  and other related information please refer to the following link – click here.