Merchant Innovation

ISVs Help Merchants Make The Digital Pandemic Pivot — With Data

ISVs Can Help Merchants Thrive After COVID-19

To paraphrase Winston Churchill, when you find yourself going through tough times, keep going.

The current coronavirus pandemic seems interminable. The loss of life and the economic toll continue to mount.

And across any number of verticals, merchants are struggling with sudden and steep drop-offs in business, so much so that they have to pivot at a moment’s notice toward new business models that reach customers where they live, literally.

To that end, Bjorn Ovick, chief commercial officer at RS2 Software, told PYMNTS, independent software vendors (ISVs) and payment facilitators (PayFacs) can help those firms make the pivots they need to survive now, and even thrive in a post-COVID-19 world.

“We’re in a unique time right now where things have paused,” he told PYMNTS. “There are quick shifts happening from a B2B standpoint to delivering services and products into the home environment.”

ISVs and other providers need to empower their corporate customers to make that shift happen — with haste. Doing so can open up new revenue streams for those providers.

“Right now, what we’re seeing is a lot of ISV application developers have the time now to fast-track the ability to embed payments into their applications,” he said.

Embedding such functionality, in turn, can help merchants get what they need to support brick-and-mortar locations (in the case of, say, a restaurant offering takeout and delivery) while shifting to online commerce at the same time. The merchant, of course, benefits from not having to juggle multiple providers.

The ISVs, for their part, have individual considerations as they seek to fast-track and broaden their offerings to their merchant base.

The ISVs and PayFacs have to examine their own cash positions in an environment that could charitably be called rocky and see if they are able to weather the storm for a few months. Beyond those immediate operating concerns, looking toward what merchants might need in the midterm to make it through the pandemic (and after it) can be fruitful across the ecosystem, particularly within the services space. (Ovick noted there have been indications that bookings for summer 2021 are starting to gain traction.)

Data is critical here for service businesses such as online travel agencies, fitness and health providers moving to a virtual environment and other stakeholders, and as Ovick explained, it must be mapped to what he termed the “customer journey — understanding who your consumers are and who your audience is from a data perspective.”

Those ISVs, in turn, have to aggregate data from multiple sources into their applications, spanning initial authorization all the way to settlement.

He said firms such as RS2 can “plug into the middle part” of the equation and aid ISVs in their efforts to offer those payment experiences through application programming interfaces (APIs), with speed — and where time to market previously had been months.

To stay relevant and capture new revenue streams, said Ovick, service firms must look at the previous interactions they have had with customers.

ISVs can access the historical data necessary for such granular insight and build software that can reach the right consumers at the right point of interaction where there is “intent to buy” and more engagement.

Upon the purchase, merchants must offer a range of payment options (using the software from ISVs) spanning digital wallets and cards and streamlined forms in which to offer payment details.

“It’s about curtailing the purchase process to make it easy,” said Ovick, “and removing hurdles for the consumer … to complete the journey.”

There’s potential to cement relationships post-purchase, maintained Ovick, and manage the consumer lifecycle to keep them engaged over the ensuing six, 12 and 18 months, through cross-selling efforts centered on gift cards or new experiences and services.

Fighting Fraud

And beyond the services verticals — indeed across any vertical, but especially boutique retail — said Ovick, there’s opportunity for ISVs to help merchants combat fraud.

“They’re shifting from in-store traffic to virtual traffic, and many of these boutiques don’t have any experience understanding what type of fraud risk and vulnerability they have,” he said.

ISVs can help merchants determine whether a customer is known or unknown, and what parameters should be in place to mitigate risk.

In one scenario, ISVs can create what Ovick termed “bad actor databases to understand who those bad actors are and the trends behind those bad actors in the local ISVs market.” It’s an additional line of defense where ISVs can identify risk and communicate it back to retailers to stop bad transactions from getting through.

Looking ahead, said Ovick, “there will be pent-up demand on the consumer side as well as on the business side. When we get through this, I think there’s going to be a big influx of spend” that will undoubtedly benefit merchants and ISVs — if they’re ready to pivot and take advantage of the opportunities.

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New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.

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