Nets: A hub of innovation for electronic payments - Francesca Terrell and Kristian Sørensen

Banks are facing greater competition than ever from new entrants to the payments space, including some of the world's biggest and most influential companies. While payments solutions run by the likes of Apple still usebank processes, the financial institutions are losing the direct interface with customers and merchants. Francesca Terrell and Kristian Sørensen explain why Nets has found a way to put banks back in the frame.

The challenges banks must overcome are constantly evolving, and the pressure is intense to stay relevant to customers in a world where standards of service quality and personalisation are defined by powerful technology, and retail customers like Apple and Amazon. Banks must respond quickly to a changing competitive market, but it can be hard to know where to begin.

"Banks are managing battles on all fronts and there is a flurry of activity in spaces that are traditionally part of their core business. Agile and innovative new players are encroaching on their territory, so banks must choose where to focus their efforts in an ever changing battleground. The payments ecosystems are very complex and difficult for them to negotiate," says Francesca Terrell, head of Mobile Services Unit/FS at Nets.

"The problem is how to remain relevant in the eyes of customers and merchants, and to meet increasingly high customer expectations, which the likes of Google and Facebook have taken to a much higher level," adds Kristian Sørensen, senior manager, corporate strategy at Nets.

As a leading provider of payments, card and information services in the Nordic region, Nets has positioned itself as a hub that offers banks the ability to quickly and cost-effectively position themselves as key service providers between customers and merchants in the payments space.

"In their attempts to pick the right battles, banks are choosing different strategies. Some are going toe to toe with new market entrants by introducing innovative products and services all the time. These are the digital-hungry banks. Some are doing nothing, which is not really a viable option, and others are testing the water. It all depends on their appetite for risk and innovation," says Terrell.

"They must understand the critical points of their business; one of which is payments. That service opens the door for customers to select other products and services from the bank, which keeps them loyal to the brand. Banks must be great at customer relationship management, but they must also strive for transactional excellence," she adds.

A tried and tested model

As a Nordic hub for payments processes, Nets provides a transparent interface between banks, customers, merchants, public sector organisations and businesses across the region. Banks can capitalise on Nets' many-to-many connectivity to reduce complexity and speed up time-to-market by putting their own brand and services on the core functionality Nets provides.

"We manage the common infrastructure in a non-competitive space. Everyone can plug into that hub, and banks can concentrate on their brand and their product offering. Our approach is to make it as much plug-and-play as is possible. Next year, we are introducing a mobile-payments service for the Nordics on which banks can build. It will focus first on NFC payments then we will add other functionality such as loyalty schemes. Banks can quickly implement that through our hub, but there is also a long-term road map," says Terrell.

"We remove the complexity," adds Sørensen. "For instance, banks wanting to develop mobile-wallet applications know that negotiating individual agreements with merchants is a big investment and will take time. Our model means they can reach those merchants and their customers much quicker and more cost-effectively. We provide the connectivity, but we don't get in the way; banks can bring their products directly to customers."

Nets is already working with Nordic banks such as Eika Kredittbank on contactless payment solutions using smartphones to further the development of mobile-wallet applications. The strength of the company's payment infrastructure, and its strong track record of reliability and innovation, have made it a regional powerhouse in the electronic-payments space, and it is likely that its services and proven model underpinned by tried-and-tested technology will attract a lot of interest in the years ahead.

Francesca Terrell, head of Mobile Services Unit/FS at Nets.
Kristian Sørensen, senior manager, corporate strategy at Nets.