Technology services, merchant services, payments processing: These terms woefully minimize the range of needs merchants face in today’s mobile, digital world — and they often fall short of accurately describing the solutions innovators are bringing to market to help merchants maximize their potential.
That potential, said Shane Happach, head of Global Enterprise eCommerce at Worldpay, lies at the center of the blurred lines that now define commerce. It’s time to stop differentiating between online and offline commerce, Happach emphasized, because for a merchant, it’s now all about “customer acquisition activity” across the board. Most physical businesses have a digital presence. And, increasingly, digital-only merchants — even the big ones — are branching into the brick-and-mortar domain.
For merchants, finding clarity amidst those blurred lines means that a lot of technology must talk to a lot of other technology, and those systems don’t always speak the same language. The global distribution system must talk to the payment gateway that must enable alternate forms of payment, that must enable purchases and refunds across channels, seamlessly, Happach said.
Additionally, he emphasized, online and offline components of the business must interface smoothly; it is not enough to be the sum of their parts.
That’s where Worldpay, Inc., Happach said, has found its niche. The global payments provider is a combination of two major players in the space: Vantiv, Inc., a provider of payment processing services and related tech solutions for U.S. merchants and financial institutions (FIs) and Worldpay Group plc, a technology-led payment solutions innovator.
The companies formally combined on Tuesday (Jan. 16) after proposing a merger back in August of 2017. Happach spoke with Karen Webster about the vision behind Vantiv’s acquisition of Worldpay and what it will mean for the companies coming together as well as for the space where they operate.
Online Vs. Offline Commerce: It’s Not a Competition
If there were ever a proof point that the lines of commerce are blurring, look no further than these two data points, Happach told Webster. Many merchants are shipping products from physical and digital points of sale, and even formerly pure, digital players like Amazon and Alibaba are making their mark in the physical world — both have acquired grocery stores, and Amazon now has a small chain of brick-and-mortar bookstores and has set up shop inside Kohl’s.
That’s where Happach said Worldpay has found its sweet spot: enabling merchants to make their way in a blended-channel world — all without unraveling the customer company’s DNA to achieve it.
Today, said Happach, retailers are still organized in that online/offline dichotomy, and even industry giants and innovators struggle to reconcile the two. It’s not unusual, he said, that when he and his team engage with customers, it can feel like engaging with two separate customers in one.
He believes the problem is that there are too many roads inside these merchants to the same destination. The reconciliation of channels means something different to different players, and they each need a unique roadmap to find their way. Part of Worldpay’s plan is to help draw that map, said Happach.
The Road to Visibility Is Paved with Data
There are a few points on which everyone seems to agree, though: A consolidated view of end-customer data, regardless of where and how they interact with the brand, is needed to guide the growth process.
Once that is achieved, Happach said most merchants agree that the next problem will be the broad system of middleware partners, such as till and cash register software. These pieces are not always implemented at a single time or as part of a single strategy, so the challenge is to integrate choices that have been made over time to create, again, more than a sum of parts.
He predicted this will become even more important as more devices connect to the internet. Retailers must wrap their heads around what it means to reach out to customers beyond stores, web and mobile platforms. No matter which endpoint customers use for their queries, Happach said, retailers want to ensure they can be found there.
“When you try to put it all together, it’s more than ‘1 + 1 = 2,’” Happach said. “It’s more like 1 + 1 = 5.”
The Harmonious Orchestra
When describing the interplay of participant technology platforms, Happach referred to a business’ technological system as a “harmonious orchestra” whose pieces must all be in tune to produce the optimal outcome.
The same, he said, could be said of Vantiv and Worldpay as they come together in a single unit.
Happach described the acquisition as a marriage between a forward-thinking, U.S. payments leader and an international player with only a small U.S. footprint. These geographical footprints, he said, overlap enough to be an asset, yet are diverse enough to complement each other and deliver additional value to both parties and their customers.
Among those areas of value, Happach said, is in the business-to-business (B2B) payments space, where the opportunity to extend Worldpay’s suite of technology and merchant services is well-suited to tap into that massive market potential. The opportunity to move those payments is a high priority for issuers and networks alike. Happach emphasized that Worldpay has the acceptance model to help those customers hit that sweet spot for their customers.
Additionally, he said that both companies have a strong partner focus and a great interest in reaping value from the data they see — data which, at that scale, can hold great power and potential.
Happach predicted that the biggest difference Worldpay can deliver to customers after the merger will be harnessing customers’ data to enhance factors like authorization rates, understanding consumer behaviour, planning for market entry, evaluating projects, providing offers to customers and anticipating problems.
Customers, analysts and employees have agreed on the value these companies can add to each other through the unified Worldpay unit.
“They see the value in bringing solutions to bear at scale in a fragmented space,” he said. “Being big is good. We want to be nimble as well, but we want to prove that we have that viability at scale that allows all of the world’s businesses to put their trust in us — and we feel better together than we did apart.”
Beyond Payments Processing
When asked how Happach would describe Worldpay, he agreed the traditional labels weren’t adequate. The proposition of “payments processing” is defined as the exchange of value for goods and services, yet Happach said that players in this space must do more than process payments.
It’s an area that has plenty of room for growth, as business models evolve and doing business across borders becomes “business as usual,” he said.
On that score, Happach said there’s “more to come,” as the company aligns the reality of their new global capabilities with the appropriate narrative that articulates their promise to their stakeholders clearly and definitively.
“This is a new area in a more traditional enterprise of merchant services,” Happach concluded. “There’s a high volume of opportunity — especially in B2B — to take companies to the next level. For Worldpay, this opens a new customer base for us and new opportunities for working capital, cash flow and receivables management to make our customers more efficient.”