6 Challenges to Overcome When Positioning Your Business for the Future of Payments
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Digital payments adoption is changing the trajectory of the future of payments. An in-depth study by Edgar Dunn & Company found six key themes that reflect the concerns of the industry about payments today and the opportunities the future of payments may bring:
- Market Trends
Payment market trends fall into three categories–well-established, emerging, such as biometric payments, and futuristic payments which include technologies that leverage the Internet of Things for payment processing.
- Enhancing Customer Engagement
Merchants are challenged to link past in-store transactions to active customer accounts. Digital loyalty programs are working to solve this, connecting customer experience across in-store and online purchases and further cultivating an emotional connection between brands and their customers.
- Costs and Complexity
Affordability and efficiency are top of mind for merchants when selecting digital payment solutions. Additionally, merchants are more often relying on solutions providers and payment service providers to help prioritize and manage processes and overcome device complexities.
- Identifying New Revenue Opportunities
Customer retention is top of mind as merchants seek to deliver experiences that build loyalty. Additionally, they are looking for ways to diversify revenue streams including leveraging co-branded store cards and buy now, pay later (BNPL) options. Merchants are also considering financing options as they overcome the challenges of decreased cash flow during seasonal slumps.
- Implementing New Technologies
Evolving customer behavior means that merchants must embrace new payment technologies that deliver functionality and security or lose market share. They are looking at payment technologies including QR codes, softPOS for seamless payment acceptance, and self-service payment options.
- Leveraging Data Analytics
More than ever, merchants are relying on data to make critical business decisions. AI and predictive analytics are empowering merchants with the data they need to optimize key performance indicators and ultimately drive more sales while increasing loyalty.
How Are Payment Service Providers Addressing The Challenges of Merchants?
Edgar Dunn & Company has developed a “5-pillar framework” for addressing modern challenges and positioning businesses for success in the future of payments:
- Merchant Portfolio Management
This pillar involves segmenting key account management (KAM) teams by vertical market and tier, in order to more effectively manage high-value relationships while delivering the tailored strategies that will drive growth for merchants.
- Omnichannel Customer Journey Design
Seamless customer journeys have never been more crucial. Payment service providers must collaborate with merchants on the customer journey, centralizing data for an enhanced merchant and consumer experience across all touchpoints. A one-size-fits-all approach will not be effective.
- Proposition Partnerships
Collaboration with third-party experts like ISVs, ISOs, and technology providers has allowed payment service providers to enhance propositions, leverage expertise, share resources, and grow merchant relationships. This allows payment services providers to meet merchant needs faster and pivot as emerging technologies gain traction.
- Performance Analysis
Basic sales data and dashboards may be adequate for small merchants, but larger retailers demand sophisticated insights. Predictive modeling and benchmarking against industry peers are helping to drive improvements, decrease costs, build relationships, and enhance the merchant experience.
- Innovative Payments
Keeping pace with a rapidly evolving payments industry is challenging for merchants and payment service providers. Collaboration and strategic partnerships are essential to innovating at a pace that wins market share in a changing retail landscape.
Strategic Partnerships Help Navigate Payment Complexities
As customer behavior and market dynamics evolve, the future of payments will require creative solutions. By laser-focusing on the needs of merchants, and collaborating with providers who can help you deliver, you’ll drive sustainable growth today and tomorrow.
Download the report from Edgar Dunn & Company and contact Ingenico for more information.
