There are many influencing factors in play shaping how merchants and acquirers approach their payment strategies, both from an infrastructure and processing perspective. Bernhard Lachenmeier, head of products and marketing, SIX Payment Services, takes a look at market trends and gauges what lies ahead
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The renewed focus on payments is rooted to a number of causes. There are many influencing factors in play which are shaping how merchants and acquirers approach their payment strategies, both from an infrastructure and processing perspective. There has been heated discussion around what impact the changing payments landscape is having on its contributors.
As an example, merchants across Europe are now taking measures to arm themselves against a fast-paced customer demand for seamless service, and are therefore pushing for a heightened service for less investment.
Taking trends like this into consideration, where does this leave acquirers, if the majority of acquirers are banks? New technologies are very much in the spotlight now and traditionalists are having to fight their corners in order to remain competitive.
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By GlobalDataWe can start with the exponential interest and growth in m-payments. However there are still challenges, with questions remaining around payments authentication, customer ownership and regulatory compliance.
These issues tie in with the growing demands for, and implementation of, m-commerce platforms, be that through a web browser or an App. Undeniably, these technologies are heavily influencing consumer spending behaviours which in turn is encouraging respective businesses to re-visit their existing platforms and strategies.
New market entrants are coming in thick and fast to saturate the space; from the Silicon Valley start-up to multi-national mobile handset provider – all claiming a corner of the market to entice an expecting global audience.
Customer loyalty is at an all time low following the economic turbulence of recent times and we have reached the point where we are all seeking more from the next generation of technologies. Increasingly we see merchants looking to alternative providers, be it Google or PayPal for a more seamless customer experience. This positioning of new players between merchants and payment facilitators is a significant development and not one that acquirers should take lightly.
Nevertheless, the trend is in its infancy. In the next year or so, we will continue to witness many parties sitting on the sidelines, awaiting further industry developments before committing to a payments initiative. For example, there is anticipation around Apple’s next move. It was a surprise to many that the new iPhone 5 did not boast an NFC capability.
Payments will now be underpinned by state-of-the-art technology. While processing will always remain an important responsibility for acquirers, in terms of cost, we foresee the trend moving in favour of infrastructure to elevate the value-add proposition banks and payment players can offer their customers. I am definitely a keen spectator as the story continues to unfold.
