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Why Human Nature Presents a Challenge for Acquirers

From contactless and Apple Pay, through to immediate payments (IP) initiated via QR code, there are numerous examples of modern payment behaviors that have exploded in popularity, despite initial misgivings from some.

With minimal effort on their side, consumers can pay with more options and with greater convenience. But for merchants and acquirers that must adapt and offer these new capabilities, agility become paramount.

Especially since – as we’ve seen in recent weeks – seemingly unpredictable events and economic challenges can emerge and quickly alter the landscape.

So, what can acquirers do, as consumers’ payment behaviors – with the COVID-19 crisis acting as an accelerant – change faster than ever?

Be ready to innovate and stay flexible

While acquirers can’t predict the future, they will be set up for success if they can adapt quickly to changing payment behaviors and support new business requirements from merchants by facilitating access for their customers.

Rather than trying to spot the “next big payments thing” with certainty, acquirers should be “ready for anything,” by operating in a lean way. They should strive to build modern, agile systems that can connect flexibly to any payments ecosystem. And they should ensure that flexibility can then filter down to merchants, who – just like acquirers – are under plenty of pressure to adapt to consumers’ changing payment behaviors.

In a challenging market, acquirers can go beyond acting as simply service facilitators for their merchants and become trusted partners. This means helping merchants maximize every opportunity for conversion, whether that means more payments choice, friction-appropriate transactions at the point of sale, or something else that ensures customers convert and feel inclined to return in the future.

But it’s not just about driving actual sales. Merchants also want to maximize the value of each transaction; optimizing them and facilitating lower-cost mechanisms like non-card or real-time payments can be a way for acquirers to help their merchants even further.

Innovation, planning and merchant-focused UX: three pillars for acquiring success

It’s not all about responding quickly to change. One reason that payment types like credit cards are so well embedded is that there are a wealth of mechanisms and architectures that support their smooth running, from processes for queries and disputes, to payment reversals in the event of fraud.

For new payment types, like IP, these support mechanisms and rules have not yet evolved. So, while card alternatives might have low-cost mechanisms that can help merchants and acquirers take a higher margin from every transaction, there’s more that’s missing. Especially since the new paradigm of direct-from-account payments opens new opportunities for fraudsters, based on misdirection and authorized push payment (APP fraud) scams. Care is required to safeguard consumers and merchants, providing similar protection to that afforded by established credit card schemes. Acquirers and other players in the payments ecosystem must work together to put the relevant infrastructure in place.

Achieving this can’t happen without significant investment – and this alone can be enough to put acquirers off at a time when margins are already squeezed. But there is an argument that if acquirers can develop services that are innovative, advanced and comprehensive enough, merchants may be willing to pay a premium. This could be used to develop the wider ecosystem required to fuel those value-added services.

Keep an eye on the customer experience

It’s all well and good racing to accommodate new payment types desired by customers, but this can create complications. If all the focus is on innovation and access to new services for consumers, the back-office demands and functions experienced by the acquirers’ customers (i.e., retailers) could be overlooked. And in a world where retailers are evaluating acquirers more carefully, and looking for competitive differentiators, this is a crucial point.

In addition to trying to retain loyalty by giving merchants access to relevant payment types and helping them complete more transactions, acquirers should offer flexible and easily accessible billing/management services in a consolidated merchant portal. Such a portal could compile bills for different payment types into a single stream and present this information, together with settlement options and easily accessible functions to merchants, making the wider process of managing payments simpler than it’s ever been.

Overcoming the unpredictable

We, as consumers are unpredictable — especially now — but if acquirers can operate in an agile way, help their merchants with varied access and optimized processes, and position themselves as trusted partners in the payments ecosystem, then navigating that unpredictability may just become a little more manageable.

ACI’s five top tips for acquirers to manage unpredictability

  1. Strive to support emerging payment methods quickly, empowering merchants to effectively engage with their specific buying communities
  2. Ensure online systems are agile enough to access the new connections required for new payment types – and for access to value-added services
  3. Help merchants find new opportunities for higher conversion rates and increased repeat business and loyalty
  4. Present merchants with a simple-to-use portal for fees and billing, ensuring that the confusion around processing multiple payment types doesn’t leave merchants grappling with overly-complicated systems; let merchants feel they can take control
  5. Become a trusted partner, not just a service facilitator – and help merchants win more clients, manage their businesses more efficiently and run leaner operations


To learn more about how global acquirers can tackle these challenges, download our eBook, No Margin for Error: Why Acquirers Must Change Their Business Models to Thrive in the 2020s.

​Solutions Practice Lead, Consumer Payments EMEA

Lu Zurawski is Practice Lead for Retail Banking Products at ACI Worldwide. Bringing with him a varied and extensive background in consulting, systems integration and service management, Lu develops ACI’s strategic payments business propositions in the emerging fields of Open Banking, new access models and real-time alternative payments. Lu has over 20 years’ experience across a variety of payments markets, which is evident in his thought-provoking and often unorthodox viewpoints on the world of payments. In particular, Lu’s interest in Behavioral Economics often shines through, as he addresses the latest trends across policy, regulation, technology and customer behavior.