FIS Merchant Payments has been enabling retailers and other merchants in the UK, Ireland and France to accept different types of payment for over 25 years. The company name may not be that familiar although its products and services are well known to retailers. In particular, TRANSAX Cheque Warranty is a service that thousands of retailers have used to accept millions of cheques more securely.
However, with the decline of cheque usage (especially for payments of lower values amongst consumers) the company has diversified over the last 12 years or so and is established not only as one of the largest payment processors in Europe but also as the one with the broadest range of payment types on offer. This success can be measured by the 183 million or so payments they process each year, worth £12 billion.
The company now processes card payments, Direct Debits, retail credit agreements, fuel cards, gift cards and trade account cards in addition to the traditional cheque services.
They also offer secure acceptance solutions for eCommerce and mail order/telephone order transactions. FIS have strong relationships with over 14,000 merchants in Europe, who use their services at over 100,000 locations. FIS works with retailers and suppliers of all sizes from Tesco, Total and Whitbread through to independents and sole traders, all relying on FIS to accept payments more securely, quickly and efficiently.
John Fogwill, Payment Solutions Director at FIS Merchant Payments, spoke to The Grocery Trader.
The Grocery Trader – John, what does your job entail as Payment Solutions Director? Where were you before?
I coordinate the development and direction of our products. I was previously at American Express where I joined as a software programmer and went on to manage a group of software developers responsible for transaction switches. I originally trained with British Airports Authority (BAA) as an engineer, obtaining chartered status, working on information, control and monitoring systems..
GT – Do you work with individual customers to develop solutions for them?
Yes, I get involved in identifying and developing solutions for many customers. I enjoy talking to them and finding out their needs. FIS is solutions oriented: we don’t use third party hosts or software, so we have direct control over the services and solutions that we can provide.
GT – How are you organised to service UK retailers and other merchants’ need for your solutions?
We have a talented group of people across our Sales, Account Management and Development areas and we work closely as a team both pre-sale and post-sale. It is important to win new business opportunities but it is just as important to provide the best possible service to our existing customers. We are set up to ensure that we gain a good understanding of what our current and prospective customers require in order that they can be successful.
GT – How well known in UK retailing is FIS?
FIS has come to the fore quickly for the services it provides to the banking and financial services communities, but is a less familiar corporate name amongst retailers. However, many Grocery Trader readers should be familiar with some of our product portfolio, not least the TRANSAX range of payment processing services.
GT – Who owns FIS Merchant Payments?
We are part of FIS, a leading global provider of financial technology. We are quoted on the New York Stock Exchange and we are in fact classed as a Fortune 500 company and a member of the S&P 500 Index. In short, that means we are one of the largest companies in the world.
GT – Is FIS Merchant Payments a global operation?
FIS Merchant Payments currently operates in the UK, Ireland and France. As part of the global FIS group, however, we can leverage expertise from other parts of the wider company if we need to.
GT – How would you sum up what FIS Merchant Payments does?
We supply merchants with a wide range of payment processing and warranty services, and help them sell more goods and services by making it easier for their customers to pay. We achieve this through a choice of payment acceptance solutions and by reducing the merchant’s concerns about payment risk. With many of our services, uniquely we also provide payment warranties that protect merchants from non-payment and fraud.
GT – How do you reduce concerns about payment risk?
We have specialist risk and fraud management software and we have an expert group that provide risk and fraud analysis and services. As well as providing the tools and expertise to allow retailers to manage risk effectively we can add a warranty of payment – meaning that we will pay a merchant using our services if a transaction does not complete.
GT – What are payment warranties? How do they work?
For most forms of payment, until the funds arrive in your account there’s an element of risk, and even then there may be continued risk (for example, chargebacks on Cardholder Not Present transactions). We can offer a payment warranty on certain types of payments so if a payment fails we pay our customer instead and we assume the role of debt collection for the outstanding debt. In this way, our customer can trade confidently, knowing that they will be paid and they save themselves the hassle of waiting for and collecting bad debt.
GT – What payment methods do your payment warranties cover?
GT – How many payment transactions does FIS Merchant Payments process?
Every single day in the UK, Ireland and France, FIS processes over 500,000 card, cheque, consumer finance, trade finance and Direct Debit transactions. We respond to 63,000 payment warranty requests every day, with 99.9% of decisions delivered within seconds, and save our merchant customers £375,000 every 24 hours by paying them for credit sale transactions and dishonoured payments and alerting them of their highest risk transactions. All of this equates to some 183 million payment transactions processed per year, with a value of £12 billion.
GT – How do these break down between cards, cheques and other transactions?
The total includes 140 million (£4.86 billion) card transactions processed from retail, hospitality, fuel, online and B2B merchants, 33 million (£4.3 billion) consumer and business cheque transactions and 10 million (£2.76 billion) consumer finance, trade finance and Direct Debit transactions.
GT – Do your payment processing systems ever crash?
We operate dual active hosts to minimise the risk of any our services being unavailable. We achieve very high levels of service availability but it never pays to be complacent!
GT – How many people do you employ?
We employ 300 in Europe, in our divisional offices in Birmingham, Glasgow, Dublin and Paris.
GT – Do you offer a solution for everyone?
In a word, yes. We provide a wide range of services from card acceptance with rented terminals for independent retailers to payment fraud reduction for eCommerce retailers through to large-scale payment processing for large multiples, including data storage that is PCI DSS compliant.
GT – Can you talk us through your areas of expertise?
We handle Card payment processing and PCI DSS accredited payment data hosting; eCommerce payment processing; risk management and fraud detection for multiple payment types; payment warranty protection; robust system architecture at dual primary data sites; and custom solutions developed to meet unique commercial needs. In addition to all of these high end solution oriented services, we also provide credit and debit card processing at highly competitive rates through TRANSAX Merchant Services.
GT – Your custom solutions sound interesting. Can you tell us about them?
We write our own software for all of the products and solutions that we support. This means that we can work with customers to develop a “custom” technical solution if it is required. Risk and fraud management solutions will often be specific to the clients operating environment and processes and will change progressively as risk and fraud evolves.
GT – Which are your key services in the retail space?
Probably the most important one is ClearCommerce, which enables eCommerce retailers to accept and process card payments more securely by reducing fraudulent transactions. Then there is the TRANSAXion Managed Payment Service, where we provide switching, routing and settlement for all card services – a fully comprehensive, managed service for debit and credit cards, ideal for larger organisations where payment acceptance and security can be improved. These are followed by Ezi-Pay, a retail credit payment product and TRANSAX Merchant Services for low cost card acceptance.
GT – Do you also provide card terminals to merchants?
Yes, in 2008 we started supplying payment terminals to smaller and medium sized retailers and other merchants. We launched a dedicated Merchant Services Division and kept the TRANSAX name.
GT – How many card terminals do you now have out there?
We’ve been particularly successful with TRANSAX Merchant Services and in just 2 years we have signed up 5,000 retailers in the UK and Ireland. That’s nearly one percent of the merchants in locations where people use cards.
GT – Do your terminals also enable a guarantee for cheques?
The standard TRANSAX Cheque Warranty is also instantly available through our card terminals for those businesses that need it. It’s an easy service to use as the merchant only has to input the cheque number, sort code and value.
GT – How is the market developing for Gift cards?
The UK Gift Card market is now maturing, although it still has some way to go to catch up with the USA. For us in the payments industry, we call this a stored value solution because the outstanding credit value of a gift card has to be stored and each transaction has to be authorised. We are uniquely placed to provide this storage and authorisation process using our system architecture, and we have been selected by several retailers as their partner as they launch their Gift Card offer. Of course, the concept can also be applied to refunds or savings card schemes.
GT – What are the benefits to customers of your solutions?
In terms of payment continuity, our reliable, robust systems mean ultimate payment uptime. Our secure data hosting reduces the costs and associated risks of PCI DSS compliance. Our payment fraud detection and alerts reduce exposure and protect revenue. Customers’ ability to accept more payment types with our systems means increased sales for the merchant. We protect their profits through more secure payment acceptance and less exposure to payment fraud. We guarantee payment certainty with our various warranty services and offer advanced payment information. Our wide choice of payment management systems and reconciliation information means financial reporting is faster, more accurate and disputes can be resolved more quickly and resolutely. Finally, there’s our broad base of payment expertise: our experience, knowledge and technical capabilities are an added resource for customers’ business success.
GT – Where do you fit in alongside the likes of Barclaycard and VISA and the other payment acceptance companies? Why come to FIS?
FIS provides a range of payment processing and warranty solutions to merchants. We will pass transactions to acquirers and card issuers, including Barclaycard, and we will handle card payments for both the VISA and Mastercard schemes.
GT – What kind of consultancy and advice can you offer retailers who are thinking about updating their payment management systems?
We often adopt a consultative approach to providing solutions to customers. We have a wide range of solutions and we would welcome the opportunity to explain our capability and the breadth of our offering to merchants. The first piece of advice I would give any merchant is to consider that everything they do requires payment and without payment there can be no existence, therefore payment acceptance is a critical business issue. As such, it pays to bring in the payment experts. We know how payments can be accepted quickly, securely and reliably. Forgive the intentional pun here, but it really can pay and make all the difference if you talk to us at FIS Merchant Payments.
GT – What difference has the advent of PCI DSS made to your business?
PCI DSS hasn’t necessarily made a difference to our approach to data security as this has always been an important consideration: What it has done is focus the merchant community on the requirements for good data management and security, extending awareness to every level and type of retailer. PCI DSS does place quite specific technical/system requirements on any organisation that processes or stores card data and it requires an annual compliance audit. In addition the standard provides us with an opportunity to offer services to our customers that can significantly reduce their costs of achieving and maintaining their compliance.
GT – Can you briefly summarise what PCI Compliance demands of retailers?
The briefest of summaries would state that PCI DSS requires retailers to confirm, either by self certification or external audit, that they comply with the required standards for the secure processing of cardholder data. Card data security is the key issue for PCI compliance.
GT – The new PCI DSS regulations place a big responsibility on the retailer to protect cardholders’ data. What protection do you offer the retailer?
Our objective is to provide solutions that mean that the retailer’s own systems do not process or retain cardholder data in the clear. This can be achieved by point to point encryption directly from the pinpad or terminal. ‘Tokenisation’ of card data can also be used to reduce the degree of system changes that a retailer has to make, as they can store a token instead of the actual card data, without having to change the principles of legacy systems that use a card number to identify and link transactions.
GT – What industry standards do you work to?
We’re approved by BACS and rated as excellent in all areas of Direct Debit accreditation. In addition, we are certified to ISO27001, the International Standard for Information Security for the Industry Hot Card File that we operate on behalf of UK Payments Administration. We’re also a Payment Card Industry Data Security Standard (PCI DSS) Validated Service Provider, as we’ve discussed.
GT – Do your staff sit on the industry bodies’ committees charged with drawing up these standards?
Not in the United Kingdom, but our parent is involved in the USA, where many of the payments standards are set for the world.
GT – Are you members of any industry bodies in the UK?
We’re members of the British Cheque & Credit Association, the Consumer Credit Trade Association, the Credit Services Association and we are an associate member of The Payments Council, the organisation that recommends payments innovation in the UK.
GT – Have your solutions won any awards?
FIS has won various awards in the UK. Most recently we were the Best Prepaid Service Provider 2009.
GT – What difference will the end of the UK’s Cheque Card Guarantee scheme in June 2011 mean to your business?
It will clearly affect us, in the sense that we have always offered warranties on cheques, and we’ll extend the service to cheques previously covered by the guarantee scheme. The main difference is that the outgoing Cheque Card scheme has only ever been concerned with personal cheques and even then, it has only guaranteed such cheques for quite low values, whereas we will offer our TRANSAX Cheque Warranty on cheques from both consumers and businesses and for any value.
GT – What other external factors do you see affecting demand for your services in the UK, Ireland and France?
We are excited by the continued growth of eCommerce both in Europe and the USA. Our ClearCommerce solution enables us to meet the demand for more secure processing of on-line payments. In addition, as the requirements of PCI DSS are becoming more apparent, our payment processing and data management services are in greater demand than ever. Finally, an issue that is also close to our hearts is the Payment Council’s recommendation to close cheque clearing in 2018, which we, and many others, believe is premature.
GT – Finally, where do you see FIS Merchant Payments going from here?
I see us going from strength to strength. Our approach is to provide solutions to enable our customers to be successful; there is increasing pressure on merchants to find the right services at the right cost, a challenge that we are well positioned to meet hands down.
FIS Merchant Payments
Tel: 0121 410 4100