“The future of the payment is not in the payment itself or the payment mechanism, but in what the payment does for the customer and the merchant contextually” says Brett King in his now very popular book Breaking Banks: The Innovators, Rogues, and Strategists Rebooting Banking. As the disruption of banking services has been a much talked about topic, fintech companies are creating an impact by providing services in niche areas like lending, investment management, bill payments, money transfers and many more.

Most of these services have traditionally been provided by banks, who tried to capture market share based on their relationship management skills and cross-selling different services to the customers who may have started off simply with a checking or savings account. Over a period of time, the fintech companies have targeted the inefficiencies in the banking system and payments processing is no different. Some years ago, a merchant would have approached a bank or an acquirer to help them set up payment processing for their services. But with the changing landscape of payments to include more digital sales, the payment processing industry itself has undergone a big change.

Growth of Digital

Millennials now account for almost one-fourth of the US population. With advances in NFC technology and all major players in the mobile industry launching their version of wallet (Apple Pay, Android Pay, Samsung Pay), US mobile transactions are expected to more than triple by 2021. A research report by Forrester estimates that mobile payment transactions in the US will grow to $282.9 billion by 2021.

Today, while credit and debit transactions have a big share in digital payments, the future clearly lies in adoption of mobile wallets. According to a global survey “The Future of Money: How digital payments are changing global commerce”, conducted by Oxford Economics and Charney Research, 72% of executives say accepting mobile payments can boost their sales—and more than two thirds think failure to do so would put them at a competitive disadvantage. The survey findings lay out a very clear call to action: Merchants that can leverage mobile technology to shape the customer experience—with seamless payment, embedded reward programs and other capabilities—will enjoy a competitive advantage.

Merchants spoilt for choice but is payments a focus area for them?

Merchants today have an unbelievable choice for payments processing with the lush landscape of payments processing providers especially in the digital space. But merchants are not excited about that, they are focused on growing their business and if digital payment systems help them with that objective, then there is reason to cheer.

While it is tempting to look at the cost of payment processing as the main driver while selecting the processor, this becomes a very operational or tactical view of things. Today merchants are keen to understand how sales can grow based on their choice of a payment processor and that makes it a very strategic decision.

Payments processor as a strategic partner for growth

Enter the payments processor who is a strategic partner and caters to your specific business needs including helping you drive more online and mobile-based sales. Some of their abilities would focus on:

  • Giving the merchants an ability to enable payments on their mobile apps and help them drive sales growth through digital channels
  • Securing your business and your customers’ data by complying with PCI standards.
  • Complete fraud prevention, chargeback management and reporting, and admin tools for enhanced business protection.
  • Improving your business operations with advanced management reporting features such as batching, returns and voids.
  • Support for different types of payments on their website – accepting all major credit cards, debit cards and ACH payments with quick, secure account verification.
  • Support for non-traditional methods of payment.
  • Providing customized solutions for high risk categories like health and wellness products, multi-level marketing, dating sites, travel and infomercials.
  • Providing multi-currency and multi-region support in case of international transactions

As the payments industry evolves, more varied options for delivering payments will emerge and companies will continue the battle to stay at the forefront of innovation. Ultimately only the processors who can help deliver to merchant growth needs are the ones that will succeed in the marketplace. The new-age payment processor will be driven by building efficiencies, being customer centric and capitalizing on the digital transformation that is taking place in the industry.

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