Can software providers — independent software vendors (ISVs) and payment facilitators (PayFacs) among them — help their merchant clients pivot as they scramble to reinvent themselves amid the continuing coronavirus pandemic?
One trend that remains in place and likely to accelerate, according to Ovick: the movement toward contactless payments.
“A lot of them have started pivoting,” he said of ISVs. “They have a regular development model, and they’ve been moving forward. Now with the coronavirus, they’ve started to examine, ‘How can I design software to be able to support my merchants where they can operate in more of a touchless environment?’”
He illustrated the way many verticals are changing with the example of getting a vehicle serviced.
Appointments can be scheduled online, the car dropped off with no face-to-face interaction, serviced, and then picked up (again with no face-to-face interaction, but with an email prompting that the car is ready) and paid for online (even wielding mobile devices).
“It’s not completely touchless but it certainly gets away from having to fill out paperwork and standing in front of individuals,” said Ovick. “And then with payment itself, you’re not handing over a card.”
To leverage the continuum of services so that they focus on a digital experience centered around the consumer (especially ones that take place at least partly in brick-and-mortar environments), data is key, Ovick said.
He said ISVs and PayFacs can leverage data to help merchants — especially those in verticals decimated by the impact of COVID-19, such as the travel and hospitality industries — personalize their experiences across marketing and promotional activities.
It’s important for merchants to be aware of their customers’ preferred payment choices and to embrace everything from PIN-less debit to digital wallet offerings.
Merchants, he said, will always want to retain share of wallet and should be on the lookout (with input from software provider partners) for emerging payment trends.
Refocusing On Omnichannel
Ovick said small- to medium-sized business (SMBs) that are, or will be, refocusing on the omnichannel retail space or packaged goods delivered online (when previously they were solely brick-and-mortar) will want to offer the most secure payment options, which include tokenized transactions.
“You don’t want to just take one payment type,” he said. “You want to make sure this is a recurring customer coming back, and you don’t want them to have to continue to enter payment information every time they come to your site.”
One vertical that will likely continue to pivot toward home delivery models includes restaurants, he said.
Different verticals are going to have to react differently, contended Ovick, and flexibility is key.
“It’s tough [to] use data off of reactive buying,” said Ovick. “So, when you see toilet paper and hand sanitizer flying off the shelves, that’s certainly reactive buying.”
But those data points, he said, may not reflect longer term trends or point ISVs (and their merchants) toward effective, proactive strategies through which they can engage customers.
He said software providers can also seek to diversify the verticals in which they operate.
Despite the headwinds of the coronavirus, he said, “Now may be a good time to adopt a positive outlook and ask whether there is a way for me — as an ISV — to diversify as well and add on other verticals that I could support with my software that could help protect me in the future from something else like this [COVID-19] happening.”