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.
How are merchants investing in payments systems to drive growth in 2019? Visit us NRF 2019 Retail’s Big Show in New York City, Jan 13-15.
Related Blog Posts
European Banks Have the Right Tools to Stay Ahead – But Will Big Tech Overtake?
Open banking and immediate payments have come a long way, according to the panellists who joined me during the ‘Open Banking in an Instant World’ session at EBAday in Stockholm recently. The building blocks are now falling into place through the introduction of national and regional schemes, open banking initiatives, regulations such as PSD2 and the acceptance and use of APIs.
Checkout Optimization Challenges: Top Tips for Online Merchants
As the current conference season draws to a close, it’s time to reflect on one of the key topics topping the agenda for many online merchants: checkout optimization.
How Banks and Acquirers Can Deliver on the Benefits of PSD2 SCA Exemptions and Differentiate Their Merchant Services
PSD2 is an opportunity for acquirers to differentiate themselves by delivering improved services to their merchants, if they implement modern solutions to manage SCA exemptions. This will drive the best customer experience in combination with regulatory compliance.
How UPI is Driving India's Shift from Cash to Digital Payments
The Indian economy has traditionally been heavily dominated by cash, while experiencing low adoption of various online payment systems including National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS) and inter-bank mobile payments. The dominance of cash is evidenced by the ratio of cash withdrawals at ATMs vs debit card usage at Point of Sale (POS)—ATM transaction volume is more than 2x greater than POS.
Cooperation, Consultation and Collaboration Are the Keys to Countering CNP Fraud in Australia
As Europe, and other parts of the world ramp up for regulatory changes around PSD2, Australia is about to launch its own strategy to combat Card Not Present (CNP) fraud.
PSD2 and Strong Customer Authentication – What's in Store for Merchants?
With the final pieces of the Payment Services Directive (PSD2) puzzle coming together, payments businesses are highly focused on meeting their compliance obligations. But the forthcoming changes will affect everyone in the payments chain – and it’s important for merchants and PSPs to understand the practical implications for their businesses and customer relationships.
Transforming Telecom Companies in a Retail World
The recent MVNO World Congress in Amsterdam brought fascinating insights into the changing telecom industry, particularly around the opportunities that lie ahead for Mobile Virtual Network Operators (MVNOs) and how they can they can cement their position in today’s fast-paced climate.
Success Speaks: Surprising New Ways Students Want to Pay
Colleges and universities are facing the dual tasks of accommodating not only new payment methods, but also a new generation of students, Gen Z, whose expectations differ greatly from even millennials. How can higher education institutions meet these demands?
In our latest Success Speaks webinar, experts from Temple University, FutureCast, ACI and MTFX Group of Companies explored today’s payments landscape for colleges and universities, payment desires of Gen Z, innovations the higher education sector is already implementing and how schools can better assist with international payments.
Women Must Choose to Rise Up Despite Past, Current and Future Circumstances
Money20/20, Europe’s biggest payments and fintech event, was recently held in Amsterdam and featured Rise Up Money20/20, a global program designed to address the gender imbalance in leadership positions within the financial services and fintech industries. A cohort of 30 female professionals was selected to take part in an exclusive curated agenda, complete with a series of bespoke content sessions, one-to-one mentoring and unique networking opportunities.
Beyond Borders: Navigating the Challenges of eCommerce Expansion
eCommerce continues to flourish, with impressive growth figures year after year. In 2018, global online sales reached almost $3 trillion, and are expected to hit $4 trillion by the end of 2020.
Despite eCommerce taking an increasing slice of the retail pie (which could now be as high as 15 percent according to recent figures), it is increasingly challenging, with competition and cost pressures creating significant issues for merchants of all sizes.