How acquirers can solve the payments puzzle
Summary
A new paper from Tribe Payments outlines huge opportunities for acquirers in the digital economy.
The way consumers pay has changed beyond all recognition over the past decade, with digital wallets, account-to-account payments, and BNPL all making significant inroads into the traditional dominance of card payments. In advanced economies like China, the US, the UK, and the Nordics, as much as 10% of all economic activity has moved from the physical to the digital space.
Tribe interviewed more than a thousand merchants across major European markets to find out how they’re responding to this new landscape - and what they need from acquirers. The findings show merchants eager for change and looking to acquirers for services beyond what’s currently available - reflecting changing merchant payment needs as the economy goes digital.
Almost two thirds of merchants (59%) in the UK, Spain, Netherlands, and Germany said they wanted to expand into other geographies through cross-border e-commerce, while 55% wanted to accept multi-currency payments. Just under half (45%) said they wanted to create their own app for ordering and payment, while almost one in three (32%) said they wanted to offer their own payment options, for example through store cards or BNPL.
While merchants are looking to diversify payment types and expand geographically, they also want to blend the physical and digital shopping experiences they offer, with more than a third (34%) looking to move to an omnichannel experience.
Some expressed an interest in moving from an internet-only model to physical locations (41%) or transforming their shopping experience for the digital environment (19%). Many are looking for help with regulatory compliance (46%) and navigating new consumer trends (46%), priorities now overtaking more traditional concerns like controlling costs (31%) and reducing fraud (27%).
The paper also sets out a range of other findings and makes recommendations designed to help acquirers reduce merchant churn, improve service levels, and enhance profitability. In this new landscape, acquirers should be competing on the basis of value-added services, rather than cost, and the paper set out actions acquirers can take to make this happen.
Insights
The traditional acquirer firm may be forced to look at its business model, it if is to stay competitive. Material growth in this sector has begun to slow it seems, thus many merchant acquirer firms are now looking to expand their global reach, into new, emerging markets, or consider the range of services they provide. Such firms need to first consider the scope of the payment services licence(s) they hold and where any change in strategy may require a variation of permission or, in fact, a new FCA application.
Lorraine Mouat - Head of Payment Services
Links: https://www.paymentscardsandmobile.com/new-white-paper-how-acquirers-can-solve-the-payments-puzzle/
https://www.paymentscardsandmobile.com/research/how-acquirers-can-solve-the-payments-puzzle-post-pandemic/?utm_source=Landing+Page&utm_medium=LeaderBoard&utm_campaign=Tribe2022