Once upon a time, businesses only had to be prepared to accept cash, checks and credit cards at brick-and-mortar locations, over the phone, or through the mail. While this hasn’t been true for some time, merchant acquirers haven’t made it easy for small and medium-sized businesses to meet the purchasing needs of the contemporary consumer.
In 2019, established institutions are jockeying to attract new customers and keep existing ones through mergers, acquisitions, in-house development and strategic collaborations with industry innovators.
Partnerships Yield New Tools for Merchants
Worldpay, for example, recently partnered with AEVI in developing its new SmartPay Series terminals.
AEVI lays the foundation for next-generation acquiring by empowering merchant payment solution providers, such as acquirers, merchant banks, independent sales organizations (ISOs) and value-added resellers (VARs), to move and manage their classic payments proposition into a new value-added world of apps, payments and smart devices.
The company’s open-solution design helps SmartPay provide a common user experience for customers across multiple smart devices. Clients receive growth-directed analytics and capabilities for loyalty programs, payroll solutions, and inventory and sales management.
And that’s not all.
In 2019, technology and added benefits for merchants have become central themes for growth, and recent mergers and acquisitions are proof of this shift in thinking. In 2015 there were nine incumbent merchant acquirers and today there are only six—and these six are on their own buying spree, acquiring small to medium-sized companies that provide complementary resources in a technology or specialized vertical market.
Raymond Pucci, Director of Merchant Services at Mercator Advisory Group, calls these new relationships “very positive.” Merchant acquirers, he explains, are recognizing that they need to deliver greater convenience, customization and value to merchants. Thanks to companies like AEVI, merchants of all sizes can now access tools and services that were unheard of just a few years ago, such as:
- Integrated payments: Integration provides customers with a frictionless shopping experience across channels, and a wide range of payment methods.
- Web-enabled terminals: Companies like Clover, a mobile POS developer acquired by First Data, provide a mobile unit that can accept payments anywhere, and without a card.
- Business tools: Value-added services include gift card solutions, end-to-end encryption and tokenization at POS and online.
- Data analytics: Business owners now have access to massive amounts of costumer and industry data that can inform a variety of business decisions. Plus, businesses can get help assessing new technologies as they emerge, based on what the analytics say about their needs.
- Customization by industry: Solutions are becoming more and more focused by market segment. Research into markets feeds creativity and inspires innovation; and innovation leads to solutions, which are in turn adaptable based on future analytics.
- Fraud detection: Fraud is a serious threat to e-commerce merchants and payment providers, so acquirers are providing enhanced purchase transaction security—or seeking to develop strategic partnerships or acquire security solutions firms.
According to AEVI Senior Vice President Sales America Bill Nichols, new tools and services are helping level the playing field between small fish and big fish across industries. Independent and regional restaurants and restaurant chains, for example, are capitalizing on mobile apps and digital commerce to offer mobile takeout orders, and the neighborhood barber shop can deliver the same mobile check-in service as a large chain.
As payment services providers fight to differentiate themselves it’s all about choice for today’s merchants. That’s a good thing, but all that choice can be confusing.
Decision-Making for Merchants
How do business owners and managers find the time to sift through all these payments services options? After all, they’re pretty busy running their own businesses.
AEVI has a simple answer to this problem: provide merchants with customized solutions that meet their customers’ needs, with added value for management and growth. The company does this by providing merchant payment solution providers access to an open and vendor-agnostic platform that combines payment services and a multi-vendor selection of value-added apps and services and payment devices.
“I think what you’re seeing is that organizations are looking not only to drive scale and reduce prices, but to bring value-added solutions to the emergent countertop,” says Nichols. “It’s not just about pricing. It’s about making it easier to deliver solutions to that countertop, and how we deliver improved value.”
Value certainly has improved for business owners when it comes to payment services, but how did we get to this point?
The Disruptors that Started a Revolution
In previous eras, acquirers’ business models thrived on millions of transactions and a commoditized pricing structure. That has since changed, as transaction scale and volume are no longer viable roadmaps for future success. Instead, strategic initiatives for acquirers are driven by downward pressure on fees and margins, e-commerce shopping trends and industry disruptors such as:
- Alternative payments: Amazon Pay, PayPal, Apple Pay and other alternative payment providers are a real threat to merchant acquirers, and they show no signs of slowing down. In 2018, PayPal alone boasted more than 250 million users worldwide.
- E-Commerce gateways: Adyen, BlueSnap, Checkout.com, Stripe and others use smart routing and local banking relationships to provide online merchants with fast, friction-free sales transactions.
- Mobile POS: Square, Clover, and Poynt are at the forefront of a burgeoning Mobile POS industry that simplifies transactions and quickens fee schedules.
The effect of these new services has led to a revolution in consumer behavior. Today’s shoppers are “hybrid shoppers” who may research a product online and then go buy it in a store, or vice versa, and they have multiple channels available to them. If merchants aren’t ready to serve these customers—wherever, whenever and however they want to make purchases—they will inevitably migrate to another seller, one that delivers more convenient, easy and secure payment options.
Fortunately, it’s easier than ever for merchants to meet consumer demand. New relationships, such as the one between AEVI and Worldpay, are bringing innovation to everything from integrated payments and web-enabled terminals to fraud detection, data analytics and customization.
The future is here, and businesses of all sizes can now compete in today’s seamless purchasing environment.