Analysis of the need to develop payment interfaces between service providers

Transcription

1 Analysis of the need to develop payment interfaces between service providers Interoperability of ticket and payment systems project 27 November 2017

2 1 Contents 1 Introduction The need for forwarding payments Support for clearing Existing solutions for forwarding payments Stakeholder comments and experiences Conclusion... 4

3 2 1 Introduction The purpose of the Act on Transport Services is, in line with the Government Programme, to remove barriers to the development of new services that utilise digitalisation. The purpose of the first phase of the Act is to enable the provision of single tickets and travel entitlements for road and rail transport as a one-stopshop service. To facilitate this, providers of mobility services have to make accessible the sales interface of their ticket and payment system. Through the sales interface, it must be possible to purchase at least a ticket product at a basic price that, at minimum, entitles the passenger to a single trip or reserve a single trip or a transportation, the exact price of which is unknown when the service begins or which for some other reason will be paid by mutual agreement after the service has been provided. The initial purpose of the Interoperability of ticket and payment systems project ( LIPPU project ) was to prepare, in collaboration with the industry, the interface specifications required for the interoperability of the ticket and payment systems to enable ticket products to be intermediated and the associated payments forwarded. During the project, it became apparent that there is no need to specify separate payment interfaces. This analysis explains why the specification of payment interfaces was abandoned in the project and why it concentrates solely on the interfaces required for the intermediation of tickets. 2 The need for forwarding payments In designing payment interfaces related to acquiring and intermediating travel entitlements, the need to separate the events of paying for and acquiring tickets quickly became apparent, since tickets are not necessarily paid for when they are acquired. This is particularly due to the new business models pursued by operators, in which passengers/customers are not charged for travelling on the basis of individual tickets or journeys, but e.g. on a monthly basis. In addition, when tickets are intermediated between operators, the prices and margins of single tickets are low, while the costs of payment transfers are high. It is therefore expected that operators are pursuing contracts where payments are gathered into larger packages and receivables balanced less frequently ( clearing ). For these reasons, payment interfaces tied to acquiring travel entitlements would be unnecessary, even harmful. 3 Support for clearing Clearing (the allocation of the costs of a travel chain and paying adjustment sums) is the typical practice between the majority of transport industry operators even now. Such clearing models, and similar models in other indus-

4 3 tries, can also be applied to new contracts related to mobility services. They cost-effectively support a variety of business models. Since clearing does not have to be based on the price of a single travel entitlement, it is possible even likely that new pricing models will also appear on the market. In this case, to enable clearing, an indication of the acquisition and use of a travel right but not its payment is necessary. Some operators have already indicated that they would like to start developing business models for cases where journey-based collection of payments is not appropriate for reasons such as pricing models based on the time of making the journey. 4 Existing solutions for forwarding payments The payment transfer market is versatile and well developed, with a wide range of mature service products. Such products include payment walls, payment services and e-invoice services offered, for example, by many established providers of financial services. The Finnish Financial Supervisory Authority s list of supervised entities currently includes 53 service providers operating in Finland (including Maksuturva, Holvi Payment Services, Nets and IQ Payments). Creating platforms for their payment transactions would be a major technical effort for operators, since building a secure and reliable payment system is a challenging task. It would also involve a significant administrative burden: becoming involved in payment forwarding would possibly create an obligation for operators to be covered by the supervision of the Finnish Financial Supervisory Authority, including the associated reporting or approval procedures. Regulation related to consumer protection in payment transactions would also create new obligations for operators. The scope of new, MaaS-based business will initially be rather limited and created in a sector where margins are low due to intense competition. The requirement to build separate payment transaction interfaces would delay the creation of services if it were at all possible within the deadlines set by the Act on Transport Services. For these reasons, operators will principally seek to rely on the existing service providers specialising in payment transactions, which they already use in the transactions of their current business operations. In other words, there is a functional, mature payment transactions market, and there is no need to open it for the purposes of a single business sector. The versatile payment service products available do not limit in any recognised way the development of transport market and the adoption of new business models. Therefore, there is no need to increase the supply of these services in this sector. 5 Stakeholder comments and experiences Stakeholders interviewed during the specification process were clear in their view that the LIPPU project should not address payment transaction

5 4 arrangements. The stakeholders were of the opinion that in order to boost the development of new business and avoid extra costs, implementations related to payment transactions should rely on universally available payment services already in use. 6 Conclusion In designing the specifications, analysing the existing payment services and consulting the stakeholders, it quickly became apparent that there is no need to specify new payment interfaces, and they could even be harmful to the development of services. Instead, operators should rely on the payment services, systems and interfaces already on the market.

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