Partnering to push payments into the future

As ANZ works through its strategic simplification, we have created a joint venture with European-based, global payments specialist Worldline to provide market-leading merchant services and payments solutions for Australian businesses.

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The joint venture will build on ANZ’s growing digital and data capability and will combine our traditional, in-house merchant acquiring business with Worldline’s market-leading transactional services and technology.

"“It is another example of our strategy to create a simpler and more digitally-focused bank.” - Hand

Australian businesses will have access to everything they need to accept in-store and online payments. They will also have access to Worldline’s specialist expertise and a global payments ecosystem through world-class terminals, solutions and services.

Partnering with a global payments provider means we can combine our banking expertise with Worldline’s leading solutions to offer our Australian customers not only the best merchant services today but also ongoing access to new developments from a global specialist.

Who is Worldline?

Worldline is the European leader in the payments and transactional services industry and the number four player worldwide. With its global reach and its commitment to innovation, Worldline is the technology partner of choice for merchants, banks and third-party acquirers as well as public transport operators, government agencies and industrial companies in all sectors.

The company has more than 20, 000 employees in 50 countries and offers sustainable, trusted and secure solutions across the payment value chain.

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This joint venture will further enhance our capability as one of Australia’s foremost transaction banks while continuing to foster positive customer relationships.

It is another example of our strategy to create a simpler and more digitally-focused bank.

As we work through our business, and indeed as the whole banking industry evolves, there will be more and more such partnerships. We’ve already created several at ANZ including an ATM network joint venture here in Australia and a specialist finance business in New Zealand.

This particular partnership for our merchant services business is something we’ve been working on for several years because, again, to best serve our customers we don’t need to own every part of the process and indeed we reduce complexity and improve the product offering if we partner with a world-leading specialist.

Big banks – including the big Australian banks – have traditionally tried to be all things to all people but that’s not the best option for customers or our shareholders.

As Worldline’s Vincent Roland explained in the podcast below, like much else in digital banking, COVID-19 has accelerated the trends we were already seeing and added to the case for such specialist partnerships.

“We see that the complexity of accepting payments dramatically increased for most of the merchants and one of the reasons is, of course, the explosion of payment solutions in this hour,” he said.

“When the [payments] industry started [several decades ago], it was mainly about local solutions. And then you had the card schemes like Visa and MasterCard coming in. These days, I've never seen such an explosion of new payment methods. [Think] about all these new mobile payment solutions. And within the world of mobile payments, the world of wallets.”

What that means is greater pressure on our merchants to accept a variety of payments - they don’t want to miss a sale. We need to be able to help them do that while making it simple.

My colleague Lisa Vasic has had exactly that feedback from our customers, those merchants.

“Banks need to have the ability to respond to changing consumer preferences and the complexities of payment acceptance. We know our customers want a reliable banking partner that can offer them a frictionless and clean payment experience,” she says.

“But also our customers are now asking what can we do before the payment and what can we do after the payment to create a better experience for the end customer? Who are they? How many times did you come to this store? How much money are they spending in my store?”

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This partnership, and the partnerships we are looking at more broadly, are about more than just completing a task, they are about gathering and using data to lower costs, improve the experience, provide information and lower the risk.

ANZ has been at the forefront of mobile payments for consumers as the first major Australian bank to offer Apple Pay and Google Pay. This continues that ambition.

The Joint venture arrangement involves Worldline acquiring a 51 per cent interest in ANZ’s merchant acquiring business via a newly incorporated entity. We estimate proceeds from the transaction will increase our Level 2 CET1 capital ratio by ~5 basis points.

Mark Hand is Group Executive Australia Retail & Commercial at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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