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First Data’s Bid To Go Beyond Payments Acceptance

Mighty oaks from little acorns grow, goes the old saying.

And, in payments, there are a slew of providers clamoring for the chance to get in on the ground floor with those little acorns so that – as they become those mighty oaks – they are able to ride the growth curve along with them.

There’s only one problem: Many services providers who are great at catering to the little acorns can’t accommodate their needs on the way up to becoming the mighty oaks. Conversely, those experts at serving the mighty oaks can’t capably provide a slimmed-down version of their products to help those young firms get off the ground.

First Data, with its newly announced exclusive partnership with Silicon Valley Bank, is aiming to make that challenge with respect to merchant services and payments technology a thing of the past.

The company announced today (June 29) that it will act as the exclusive payments technology provider for Silicon Valley Bank’s clients – a diverse client roster that includes everything from early-stage companies to unicorns.

As part of this partnership, SVB’s clients will have access to First Data’s tools that will streamline their operations and their ability to accept payments, expand their business and customer intelligence, and enhance their customers’ payment experiences.

“We get to start with these companies in their early foundational days and provide them a very important service around payments, which is the life-blood of their ability to grow,” Christopher Foskett, Executive VP and Head of Corporate & Business Development for First Data, told Karen Webster in an interview prior to the announcement.

Foskett acknowledged the challenges that young companies have when just starting out – they want access to a rich portfolio of services that span their entire growth cycle, but to get them, have to hop around between merchant services partners as they grow. That, Foskett said, creates distractions and even can sub-optimize their performance as they “settle” for what it easiest to get and integrate to – not necessarily what they may really need. This includes the ability for these innovators to optimize their omnichannel capabilities by more seamlessly enabling online to offline transacting.

“With our SVB partnership, as these young companies’ needs evolve, we’re there to seamlessly move through their lifecycle with them — and without the disruption,” Foskett said. “When you think about our small business focus, it is all about making it easier to manage their business, that’s what we will be able to do now in a much more formalized fashion for the innovators who are part of SVB’s prestigious client portfolio.”

But payment acceptance is just the tip of the iceberg, says Foskett. The goal is not just to be there for innovators as they navigate their path to growth, but making the onboarding experience seamless and even automatic.

“Our process is all very seamless. It’s so integrated that new SVB clients don’t even have to sign up, in the true sense of the word – the merchant account is just there,” Foskett said. “We have to make it simple, painless and lasting. Those three things together are what we will bring to the SVB clients.”

Foskett also emphasized the long-standing nature of First Data’s relationship with SVB, calling them an “outstanding ally” with shared and deep roots in the technology industry. Foskett emphasized that through the collaboration, First Data will ensure that SVB’s clients can “safely and securely accept payments wherever their customers conduct business,” adding that, “in turn, SVB will connect First Data with some of the most innovative emerging and established technology companies in the world.”

“With the power of First Data’s technology, combined with our broad relationships across the innovation ecosystem, we help increase our clients’ probability of success while making payment issuance and acceptance easier and more effective,” said Eduardo Vergara, Head of Payment Services for Silicon Valley Bank, in a press release announcing the collaboration. “Technology companies tend to expand into many markets earlier than companies in other industries, and require services that can scale easily and globally. Together with First Data, we are able to deliver payment solutions that will truly help our clients grow.”

Foskett also said that he and First Data hope that the SVB partnership provides opportunities that go beyond payments acceptance and enablement to encouraging innovators to create new applications that can be made available to First Data customers through its app ecosystem. “It would be great to have innovators see gaps in the payments technology space and then create apps that not only solve them, but that we can make available throughout our network,” he said. Foskett also confirmed that clients had already been onboarded in a beta period designed to “work out the kinks” and optimize the merchant experience.

The First Data/SVB partnership leverages First Data’s suite of eCommerce solutions, including its payments gateway and cross-border mobile payments acceptance in more than 160 countries. First Data currently powers 28 percent of global eCommerce. The solution will offer a “developer-friendly” payment gateway for web and mobile commerce applications and Clover Security, First Data’s payment card security solution that combines encryption with tokenization.

“Our goal is to see these companies grow and for us to grow with them and to be there throughout their success of a cycle,” Foskett said.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

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