Payments Innovation

The Invisible Opportunities In Integrated Payments

Consumers may not spend much time thinking about payments, but they certainly have expectations for them. High expectations, in fact: As the 2010s are drawing to a close, customers demand a better experience when it comes to buying — and if they don’t get it, they quickly move on.

Customers’ demands, Payrix President Bob Butler told Karen Webster in a recent podcast conversation, ultimately drive what the merchants need. If customers expect buying experiences that are simple, smooth and quick, merchants need to be able to offer them up. That’s a tall order for the B2B players that serve those merchants.


“I think all these applications — software platforms, business platforms, digital marketplaces — are looking for that ease of doing business with the customer,” Butler said. “It is an expectation that payments [are] a part of platforms that are being set up every day, and are really driving these changes.”

This idea — that payments are a necessary integration — is not exactly new, he noted. People have been talking about integrated payment solutions for over a decade. However, the solutions in the last half-decade are a magnitude better, in terms of capacity, than those that preceded them. Integrated payments, Butler added, are changing the core of payments themselves, transforming them from a utility and switch to be flipped into more of an essential tool to drive top-line revenue.

Integrated Payments 2.0

Though the integrated payments discussion has been ongoing for some time, what was on the table a decade ago was very different. There were certifications and offerings, Butler noted, but there was a massive disconnect in terms of understanding how the payment experience worked. The systems were clunky, slow and dependent on manual input from users.

Small business (SMB) owners — unless they happen to be accountants — don’t want to spend all their time trying to figure out and manually input all the payments data coming into their systems. For example, Butler said his sister founded a gym/health club because her passion was to help people improve their personal fitness. However, because her software platform only partially offered integrated payments, that was what she was spending her time doing.

“She didn’t want to think about payments and doing a bunch of manual inputs. Eventually, she went out looking for new software with easier reconciliation,” Butler said, noting that, at the end of the day, she needed something that could manage the processes she did not have the time or expertise to handle.

The software she used initially wasn’t bad or cheap, Butler noted. In fact, it was an extremely popular, custom software for running gyms that offered a lot of excellent functionality. Yet, his sister ultimately gave it up because it couldn’t add as much value as the management of payments was subtracting.

Moreover, the data that comes from the payments themselves is an invaluable resource. For merchants, payment data offers all kinds of insights into who the best customers are, who comes in the most and who spends the most.

“The deeper insights into the business performance, the more you can do — which means merchants need not only integrated payments, but integrated payments that guide them through the day,” Butler said. “They want to grow, and when you know this stuff, you get a much clearer picture of what to sell to who, and what additional products and services you can add. The payments piece is a critical element of a larger data set that drives revenue.”

From Payrix’s perspective, he noted, integrated payments 2.0 can do better. Merchants like his sister shouldn’t have to choose between vertical-specific services and services with robust payments utility. They should be able to have both.

No One-Size-Fits-All Solutions

Payrix serves as a payments technology and digital commerce platform that focuses on embedding a white-labeled version of its API-based payments solution into its partners’ software or digital marketplace, said Butler.

“And our tools are tailored for each offering, because not every vertical is the same, which means the toolbox needs to be flexible,” he added.

Hair salons have different needs and use cases than companies that lease heavy equipment for construction — they do different things and work with different customer sets. According to Butler, that is essentially the case across Payrix’s clients’ entire SMB ecosystems when it comes to customizing needs — scores of verticals and sub-verticals that no one has ever thought about in a digital context are now migrating online, and developing use cases for integrated payments that were not even vaguely considered a decade ago.

“There are so many verticals that you don’t think about at first, then as soon as you see a platform to manage it, you suddenly see that this approach makes so much sense,” Butler said. “The horizontal view of software only takes you so far — these businesses need to have tailored solutions for their specific industry.”

There are many horizontal solutions in the market that work as something of a catch-all service for SMBs, he pointed out. Some of them are excellently designed, and offer a lot of function. The problem is that horizontal solutions can only go so far, and, in some verticals, the needs are too specific to fit under that broader umbrella.

Payrix is dedicated to embedding its part of the process, letting Software-as-a-Service providers combine what they know about the vertical with the tools on offer. Entrepreneurs don’t need to be told what to build, Butler said — they need to access the tools to do the building.

“There is no one-size-fits-all solution, and there isn’t going to be one because this is now a constantly growing, moving and changing environment,” he stated. “The tools have been designed so the end user — the merchant — can keep evolving along with the needs of their customers.”



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.