One of the themes of the coming decade — we’ve sprung for a top-shelf crystal ball here at PYMNTS, so we can state such things — is getting more value from payments, and making them an even more central part of the overall consumer experience.
However, like anything interesting or worthwhile, that will be easier said than done. That’s why PYMNTS recently caught up with two payment experts from Endava — Global Head of Payments Delivery Petru Metzger and SVP of Payments Delivery Glenn Geil — for what amounts to a sneak peek of the coming attractions in payments in 2020, at least when it comes to value-added services.
At this point in time, as Christmas music worms its way into our ear canals, the progress of value-added payment services is generally moving along parallel tracks, with acquirers, large merchants and small businesses (SMBs) often using differing tactics.
“On the B2B side,” Geil told Karen Webster, “you will see it more in terms of how each business is integrating payments in a marketplace. It’s not really a particular acquirer driving value.”
For so-called mega-merchants (his term), the tendency is that the platform takes priority over payments. For SMBs, typically, it’s the acquirer running the show when it comes to value-added payment offerings.
All this matters because as the need to provide a robust consumer experience increases, so, too, does the need for merchants to improve their payment offerings, whether that is via more payment options or other methods, such as mobile point-of-sale systems. Doing so not only removes friction from transactions, and serves to decrease the rate of abandoned online shopping carts, but can give merchants, via data, more insight into their businesses and consumer preferences.
Take consumer preferences, where things are changing fast when it comes to payment expectations. “There is a lot more value-add coming into this area,” Geil said. “We are seeing a big trend in installments now, which involves consumer lending at the point of sale.”
That is not all that’s happening in this ongoing task of increasing value when it comes to payments. As Metzger told Webster, data is a big part of all this, and can lead to more value when it comes to increasing the visibility of fraud (one cannot stop what they cannot spot), as well as integration with accounting software and inventory management systems. The main goal of all of this, of course, is to drive conversions for merchants.
“What merchants like are good integrations,” Metzger said, talking about some of the common pain points merchants face when seeking to use payments and the technology to increase those conversions. That’s not all, though. “They want digital service and self-service,” he added. “They don’t want to have to call someone. They just want to do it themselves.”
Geil expanded upon this point. “Merchants want all the available options,” he said. “They want to be able to offer all available payment options, and they also want to make sure the path of getting there [to a conversion] is as seamless as possible.”
So, is progress really being made on all those fronts? “Yes,” Metzger told Webster.
As Geil explained, artificial intelligence (AI) is indeed coming into play as it relates to value-added payment services. More specifically, AI is enabling more efficient merchant onboarding while cutting down the risk of fraud. “It’s not just looking at a merchant’s bank account and years in business,” he said. “It’s looking at social scores” and other factors.
Not only that, he added, but the rise of cloud-based services and technology are part of the move toward providing more value-added services and tools in payments. That trend, in turn, gives rise to such features as downloadable payment terminals, which can make merchants more mobile and more efficient — and drive even more conversions.
Investment And Disruption
There are other areas to watch, too, as the new decade approaches.
“Vertical integration is a key part of the value-add,” Geil said. “A quick-service restaurant has a different set of vertical needs than a sit-down restaurant. There is not enough focus in this area.”
As payments become increasingly global and faster, that is putting pressure on companies to offer more real-time settlements, which adds a new dimension to the challenge faced by acquirers going into the new year.
Overall, the world is changing, with the Endava executives telling Webster that big acquirers are putting investments into these value-added services, something that wasn’t necessarily the case just two years ago. As that happens, work is progressing on marrying legacy systems that still work well with the newer technology. “How do they unify that delivery?” Geil asked when talking about the future view.
Another driver, according to Metzger, is the recent wave of mergers and acquisitions in the payments space, and the bringing together of various technologies under one corporate umbrella.
“That sounds like an opportunity for disruption,” Webster said.
“It is,” Geil said.