A Conversation with Nicolas Huss, Chief Executive Officer of Visa Europe
We recently spoke with Nicolas Huss, Chief Executive Officer of Visa Europe. In this Q&A format we discussed the evolving payments market in Europe and Visa Europe’s approach to the latest trends in the industry.
Nicolas Huss is Chief Executive Officer of Visa Europe – the leading payments system in Europe. Since joining Visa Europe in October 2013, Nicolas has embarked on a radical change strategy, driving a customer centric focus built on innovation and consumer insight. In his first financial year in the position, Visa Europe’s gross revenues grew 9% to €1.9 billion, with profits up 30%. There are now more than 500 million Visa cards in Europe, accounting for one in every six euro spent. Under Nicolas’s leadership, Visa Europe is committed to building partnerships across the finance, technology and retail sectors, expanding access to its services, and accelerating growth to underline its position at the beating heart of payments.
Prior to becoming CEO of Visa Europe, Nicolas was Chief Executive of Avant in Spain and Ireland, part of the Apollo Group. In this role, he was responsible for overseeing the consumer finance business for Apollo Global Management. Nicolas has over 20 years experience in the financial services industry, including time as CEO Spain for GE Money, and roles at GE Capital and Bank of America. He was also a member of the board for a number of joint-ventures with Spanish banks and a member of the board of GEC SAS (GE France Financial Entities Holding). A true European, Nicolas speaks English and Spanish, in addition to his native French and has lived and worked in a variety of countries. He has a track record of growing businesses and building multi-cultural teams. Nicolas holds a degree in Law and an MA in Political Science and Government, both from the University of Toulouse.
1. Europe is on its way towards leading the world in contactless adoption and there are clear mandates driving towards full penetration by 2020. What will a fully penetrated contactless market mean for Visa Europe, for Visa Europe’s members, and for consumers and for merchants?
We are all living in an age of unprecedented technological innovation. Every part of our lives – from the ways that we communicate with each other to the ways that we travel to the ways that we work – is changing rapidly due to new technological developments. How we pay – and are paid – is inevitably a key aspect of that tremendous change.
Ultimately, we are moving towards a world where we are able to pay for the things we need much faster and more easily – and the methods are much more convenient. Contactless technology has a fundamental role to play in this momentum, particularly in providing the foundation for mass-market adoption of mobile and wearable payments.
Today we already have more than 131 million contactless cards and over 2.6 million contactless terminals across Europe. In the last 12 months alone, more than 1 billion contactless transactions have been made. We’re ensuring that, by 2020, all consumers will have access to a contactless device – be it a card, a mobile phone or a form of wearable – and all terminals will work for contactless payment.
Mobile is changing everything. It is not just a new channel, but enables new experiences and bridges the digital and physical commerce worlds. While Visa Europe and our members face challenges with increasing complexity, we also have some clear opportunities for growth, innovation and expansion.
2. How would you advise Visa’s members to prioritize efforts in a world in which they have a number of different, viable mobile wallet platform alternatives? Is it practical for financial institutions to support numerous wallets?
Payment should never get in the way of buying. The most innovative banks are looking at how their customers are interacting today and identifying their “mobile moments” where they have opportunities to make their experience better, whether that’s paying for an item, keeping track of their spending or managing all their accounts. We see our role as an enabler to provide banks with debit and credit solutions that work in any wallet, through any channel and on any connected device.
Consumer demand will drive the market – there will be no “winner takes all” in mobile payments which is why we have adopted an open approach to innovation, developing a string of products, services and infrastructure improvements to address the different use cases that are prevalent in how people are shopping. Financial institutions will need to respond to that demand by allowing consumers to load secure payment credentials into a variety of solutions that enable online or mobile commerce.
Research has repeatedly shown that consumers continue to trust their own bank when it comes to adopting mobile payments services so the opportunity is there. You can see with services such as Apple Pay, and the work being done with Host Card Emulation and Android Pay, that these experiences revolve around the central concept of the cardholder paying with a digitised version of their bank card so the existing relationship and trust is absolutely integral.
We are focusing our efforts to give our members the tools they need to develop the services that will best address their customers’ needs from our tokenisation service to HCE cloud-based payment solutions to many, many more opportunities. Tokenisation is one of the most important technologies to emerge in the digital payment industry. It gives people the confidence to make payments knowing their identity and card information will remain secure and private, and unlocks really powerful new propositions.
All of this presents a unique opportunity for Visa to bring everyone on board. By taking an open platform approach to innovation we are giving our new and existing partners the tools to quickly and easily build services that answer the many demands of their customers.
3. How can financial institutions reinvent their payments P&L in the wake of reduced interchange levels? Are you seeing FIs that are prepared to adapt quickly to this new paradigm? Are you worried that lower interchange will equal lower investment in Visa products by your members?
Interchange regulation is the new reality. While we will continue to work with local members and regulators to ensure appropriate interchange rates are set in each market within the IFR framework, our role now has to be to help our members to grasp the opportunities that result from regulation. That means working with members and retailers to drive greater and faster acceptance growth and increased digital innovation to increase usage. This can then in turn replace lost revenues in a cost effective way for our members.
In response to the changing card economics and fast-changing consumer and merchant expectations, our members are looking to us to provide the innovative products and services they can use to meet the digital growth potential. That’s why, this year, we are investing €200 million, providing services that make it easier and safer for consumers to shop online, for businesses to offer borderless e-commerce, support small businesses to compete and facilitate start-ups to grow.
4. What does the separation of scheme and processing mean for Visa Europe? How will it impact the way in which Visa Europe goes to market and interacts with its member?
Separation of scheme and processing will require some changes to structures and ways of working for us but, more importantly, we are examining how it can be turned into a growth opportunity rather than simply a compliance requirement. Our approach is to build on separation to expand access to our network, making it easier for others to hook into and benefit from our platform, through collaboration. We are building deeper partnerships with a more customer-centric approach, working with our members, retailers, telcos and technology companies to create distinctive payment products that meet customer needs. Apple Pay and Android Pay are the most recent examples. Both are enabled by Visa technology in tokenisation and HCE.
5. PSD2 will require strong customer authentication for e-commerce transactions. What does this mean for the future of Verified by Visa and for the millions of cards that are used in card vaults today?
We support the principle of strong authentication but it needs to be proportionate, balancing the consumer’s desire for convenience with the level of risk and security applied.
Security in the internet space remains an area of focus for everyone involved in payments – the consumer, merchant, issuer, acquirer as well as Visa. Risk-based authentication is the logical approach – looking at the combination of the details of the devices a consumer uses and the transactions they undertake. This allows day-to-day control and could then be complemented with the option of strong authentication when usage changes. This allows the best of both worlds – easy payments when they are predictable and enhanced security when they are not.
From a Verified by Visa perspective the infrastructure is entirely compatible with the Strong Customer Authentication requirements that are currently proposed and is flexible enough to allow authentication in conjunction with risk-based solutions.
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