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Payments Are Changing: Merchants

Merchant payments

Merchants are in the eye of the storm. They have reacted quickly to the consumers and new technology.


As the ease and convenience of electronic payments increased, consumers adopted and demanded to pay by card. Merchants were beholden to the card networks and issuing banks. Recently, regulations and lawsuits have gone in favor of the merchants. However, the explosive growth of eCommerce coupled with high smartphone adoption has created additional complexities for merchants across the world.


Three trends have presented an incredible opportunity for merchants:

  1. Regulation and lawsuits have proven to be beneficial to merchants across the world by reducing the costs and complexity of accepting electronic payments.
  2. Internet-enabled devices have powered consumers to shop from anywhere at any time. The traditional store hours of 10AM-7PM are long gone; retailing is a 24/7 business.
  3. Free trade agreements and the reduction in tariffs have encouraged cross-border shopping.

An omni-channel solution encompassing inventory management, logistics and payments is a goal for which merchants are striving. Consumers are demanding to pay with any and all payment types available to them, and eCommerce is driving this growth—currently accounting for 7% of all retail spend.


Challenged with inefficiencies and shrinking margins, most notably in the grocery segments, retailers will look for efficiencies. Margins will be protected by investment in core retailing services.

New entrants are seeking to provide simplicity in a complex world, and have started at the edges of payments. In some cases, they’ve bypassed the existing payments infrastructure. By working closely with banks and new providers, merchants may be able to cut out intermediaries and lower the cost of payments. Retailers will start building partnerships—working  directly with the large banks to provide a simple and valuable payment experience for the consumer and cut the costs of payment acceptance.

In turn, this can be plowed back into reward and marketing programs to further increase revenues and expand operating margins.