Innovate and Integrate to Accumulate: Investing in Payments Systems to Drive Growth
Today’s merchants face numerous challenges, which boil down to one central issue: how to succeed in a constantly changing, complex market, while also investing for the future.
Merchants need to deliver on growing expectations around the customer experience in an increasingly competitive environment, while battling growing costs and squeezed margins. This pressure extends through the whole business for every merchant, in every sector, and it’s driving merchants to look into every corner of their operations for ways to cut costs and redirect resources.
The payments process is certainly a big part of the struggle for many merchants. Compliance burdens and consumer demand for a seamless checkout experience are creating payments challenges for every merchant’s business. But the growing digitization of commerce and diversity of devices and channels – in sectors such as travel, telco and entertainment – give merchants additional headaches in their efforts to balance innovation with cost to serve.
Legacy systems won’t make the grade
Merchants that haven’t yet modernized their payments systems face the biggest challenges around successfully reducing operating complexity while still investing for the future, which is why so many are funnelling more budget into upgrading their payments capabilities in 2018 and beyond.
Merchants are opening their eyes to the benefits that innovations such as real-time payments, social channels and IoT (Internet of Things) can deliver, but it is also becoming evident to them that their siloed, unwieldy legacy systems are not going to give them the support they need to make a success of these innovations.
Payments system modernization is undoubtedly one of the keys to cutting costs, but its other (and perhaps more significant) benefit is that it can unlock opportunities for a huge array of service enhancements that can give merchants competitive edge and drive growth. For instance, by uniting channels, merchants can improve data aggregation, which can improve cross-channel customer visibility. This, in turn, means that merchants will have a greater ability to personalize services, spot customer trends and use AI, customer profiling and data mining to stop fraud.
Coming full circle – streamlined, modernized payments systems can also give merchants greater agility to respond quickly and cost-effectively to future technology developments and new customer trends.
Prepare today and innovate tomorrow
Of course, all of this isn’t simple, and many merchants will need to enlist the help of their payments partners to critically examine their existing systems and adapt their development roadmaps to cater for the relevant innovations and trends that will underpin sales growth for their business.
One key consideration – given the pace of change and increasing complexity of payments – is which developments merchants can cost-effectively and successfully manage in house. In our recent global survey with Ovum, we found that merchants that have seen their payments operating costs fall run fewer in-house systems and more vendor applications than those that have seen costs rise. While this is just one view, it does show the benefits that are being felt by those merchants that have invested in modernizing their payments infrastructure through external expertise.
In our upcoming webinar my colleagues will be exploring this topic in greater depth. In this exclusive session, Kieran Hines (Head of Industries, Ovum) and Mike Braatz (Chief Solutions Officer, ACI Worldwide) will reveal today’s trends in merchant payments and what merchants should do to begin preparing for tomorrow.
Don’t miss out on your place – register for the webinar Investing in Innovation, Real-Time Payments and Security: What Merchants Need to Know – July 12, 11am EDT / 4pm BST.
Related Blog Posts
19 for 2019 (Payments Predictions Galore!)
Can you believe it! Snowflakes in the Northeast, which means getting the skis tuned up to race down (steep) hills. And speaking of racing, businesses are racing to complete their 2019 plans and put the finishing touches on remaining 2018 campaigns, which I hope are resounding successes. It also means (delicious or disgusting egg nog… #judgementfree), office holiday parties and prognostications galore!
A Postcard from Money20/20
Greetings from Las Vegas. By the time this note finds you, I will be back at my desk pouring over my follow-up notes from another crazy, wonderful, insightful and totally exhausting Money20/20. The event itself has grown to become the annual ‘must-attend’ on the financial technology schedule, and this year’s event didn’t disappoint with new attendees, old friends and an agenda that kept you on your feet for 4 days (and nights).
What Are the Five Payment Items You’re (Most) Looking Forward to at Money20/20?
Mark, Money20/20 is a mere few days away… and with many of our lovely colleagues making their way to Sydney for Sibos, you and I are heading out west for another thought-provoking and fun-filled week at what I believe is the world’s largest payments event, Money2018… err… Money2020.
Three Flavors of Payments Innovation
Let’s talk innovation! But first, what do we really mean when we say “innovation” anyway? As we all know, innovation can take many forms, but in my view, there are three main varieties – and these are evident in the world of payments and financial services.
Request for Pay – What Does It Mean For Financial Institutions?
What do banks – one with $60B+ in assets, one a mid-size regional bank, and one, a small innovative credit union – have in common with payment networks and the ‘Big 4’ consulting firms? They were all part of the first ACI #PaymentsForBreakfast event in North America! The theme was real-time payments, but the focus was more specifically on Request for Pay.
Why Open Banking Might Need to Rely on a Magic Illusion of 24x7 Availability
The adage “the more things change, the more they stay the same” appears to ring true when applied to the early phases of the evolution of open banking (or open payments). Especially when you contrast it with the early days of ATM withdrawals; particularly those made in the dead of night so you could pay cash for your after-party greasy feast.
Sibos Preview: The Five Trends Transforming Real-Time Payments
Real-time is now a reality, with more than 30 schemes live around the world. And real-time is in the spotlight as banks and financial service providers make their way to Sydney for Sibos 2018. What better time to look ahead at the key trends that are going to shape the ongoing development of real-time payments.
US States' Rights and Fintech?
I moved to the United States (from England) well over a decade ago now, but one thing that I’ve always found interesting, puzzling and at times downright dumbfounding is the various levels of government. City, county, state and federal government bodies – all with a role to play. However, as I studied the history of my new home, I’ve became increasingly fascinated with how the Constitution and Bill of Rights were written.
Open Banking and the Evolution of Digital Payments
The introduction of Open Banking is without doubt one of the most significant changes the European banking sector has seen in recent years. Many banks in the US, Australia and Asia are paying close attention to what’s happening in the UK and other European countries with a view toward implementing similar systems in the future.
What's Next for SWIFT gpi and Cross-Border Real-Time Payments?
Recently, I wrote about the potential benefits of SWIFT gpi for banks. Like any technology, the rate of change is accelerating, making it critical that banks keep pace with the market and with their competition. In 2018, as domestic real-time payments schemes reach near-ubiquity thanks to a combination of regulatory and customer demand drivers, we have seen an accelerated parallel trajectory for cross-border real-time gross settlement (RTGS) payments.