3 Ways Retailers are Leaning More on Acquirers for Data and Strategy

For retailers and merchants, payments are no longer just a “check the box” exercise.

As the world evolves and shopper expectations continue to mature, businesses are increasingly relying on payment processors and merchant acquirers, not only for the bread-and-butter services of transaction processing but also for valuable data insights and strategic guidance.

Look no further than the fact that Stripe’s application for a Merchant Acquirer Limited Purpose Bank (MALPB) charter has been accepted by the state of Georgia’s Department of Banking and Finance for proof that the acquirer and retail landscape is entering a new era.

The evolving relationship between retailers and acquirers reflects broader changes in how data is leveraged for strategic decision-making. The accelerated digital transformation of the retail sector, coupled with shifting consumer behaviors and competitive pressures, has underscored the importance of granular, real-time insights.

Acquirers, armed with a treasure trove of transactional data, are uniquely placed to help retailers optimize their operations, enhance customer experiences and drive revenue growth. From personalizing customer experiences to fortifying security measures and optimizing payment strategies, the influence of acquirers on retail strategy is growing rapidly.

Read also: Retail Customers Demand Simpler Checkout Experiences

Retailers Seek Digital Commerce Solutions to Add Efficiency and Deter Shrink

Given the realities of today’s commerce landscape, more and more retailers are looking to their acquirers for insights into optimizing their payment strategies. This can include everything from streamlining checkout processes to implementing alternative payment methods that appeal to new customer demographics.

“Merchants are acutely aware that frictionless experiences drive sales,” Guida Sousa, senior vice president, product management at Mastercard, told PYMNTS, noting that consumers demand immediacy, security and seamless experiences.

Payment optimization is no longer just about lowering fees. Retailers are looking to acquirers for guidance on improving authorization rates, reducing chargebacks and even strategically routing transactions to achieve cost savings.

Data from the PYMNTS Intelligence study “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces,” done in collaboration with Adobe, indicated that 50% of consumers consider the ease of a merchant’s checkout process when choosing where to shop.

“Everybody wants to streamline the checkout process. That’s what is driving payments,” Justin Downey, vice president of product at Maverick, told PYMNTS. “If you create too many hurdles in the checkout process, you might lose the payment.”

By analyzing transaction data across various channels, acquirers can help to identify inefficiencies as well as suggest improvements that may be able to enhance both customer satisfaction and profitability. For example, cross-border retailers are increasingly working with acquirers to localize payment options, providing a smoother experience for international shoppers.

As detailed in PYMNTS Intelligence’s work with Carat from Fiserv, “Platform Business Survey: The Rise of Embedded Payments,” we found that adding payment features to services has enabled independent software vendors and marketplaces to generate revenue by bring payments more prominently to the forefront of the commerce experience. Data suggests that 65% of ISVs and marketplaces that do not currently offer payment capabilities plan to add embedded financial products for payment acceptance.

See more: Embedded Finance Boom Continues to Reshape Financial Ecosystems

Unlocking Greater Personalization and Fraud Detection

Collaboration between retailers and acquirers is key to creating a layered approach to security, and with the surge in online shopping, fraud prevention and risk management have become central to retail operations. Acquirers are increasingly serving as crucial allies in identifying suspicious activity and mitigating potential losses.

Using sophisticated algorithms and machine learning models, acquirers can flag anomalies in transaction data that may indicate fraud. Retailers are leveraging these insights to enhance their own fraud detection systems and streamline their response mechanisms.

On Thursday (April 3), Visa unveiled three new value-added services designed to make accepting payments easier and more secure for acquirers, payment facilitators, retailers, marketplaces and shops, underscoring how the marketplace is responding to the needs of its stakeholders with innovative solutions.

Ultimately, the rise of omnichannel shopping has created the need for a seamless experience across physical and digital touchpoints. By partnering with acquirers who can unify payment data from various sources, retailers can create a cohesive view of the customer journey. The data acquirers process offers invaluable insight into spending patterns across different segments, which retailers can use to craft highly targeted marketing strategies.

By synthesizing this information, retailers can refine their marketing efforts, tailor loyalty programs and improve product recommendations.