Accenture Banking Blog

I want to thank Emily Boese—a managing director in our Payments practice—for working with me to develop this post. Emily leads our team focused on payment acceptance working with merchants, acquirers and companies throughout the payment acceptance ecosystem.

Payment providers have grown up in a product- and channel-centric world. Market evolution has been linear: Add a channel, add a product, add a market. One building block after another. This model no longer applies in a networked economy.

The need for speed

As we explored in our last blog, merchants are increasingly customer-centric, networked and global. While POS product requirements for payment providers are shifting rapidly, new entrants have reacted faster than incumbents, leapfrogging traditional players with improved merchant experiences and more flexible coverage of needs. Our analysis shows that new entrants have captured about four percent of new banking and payments revenue in the United States.1

We expect this encroachment to continue, which will fuel Wall Street’s—and venture capitalists’—love affair with payments fintech. With fintech increasing its competition against incumbent payment providers and accruing more investment dollars all the time, traditional payment providers must adapt faster to achieve parity.

Flexible technology that reacts faster

This starts with speed to market of technology that is more configurable, more real-time, more adaptable, and more responsive to merchants’ needs with global reach. Configurable parameter and product flexibility along with seamless, cross-channel integration of offerings—both standard payment acceptance offerings and value-added services—is a must. Merchants see clunky integrations as a liability, especially when new entrants provide plug-and-play capabilities.

Take Square. The company unveiled online storefront capability thanks to its acquisition of Weebly a year ago. The company’s head of e-commerce says a significant motivation for the introduction of the new product category was to save merchants the struggle of navigating the complexity of e-commerce options. The product includes online store features tailored to today’s consumers, including Instagram selling.2

The future belongs to payment providers that enable merchants to offer compelling and engaging experiences to their customers and that provide seamless experiences directly to the merchants themselves.

Payment providers should also make it easy for merchants to integrate their product platforms with other software in the marketplace. This does not require payment providers to cultivate a mass of vendor relationships, but it does require them to have a robust API and analytics layer for seamless integration. The added benefit is that payment providers don’t have to “pick” the market winners and can instead let their customers decide.

With global e-commerce sales expected to reach $4.8 trillion in 20213, payment providers that don’t offer global platforms are on the outside looking in on a major merchant trend. Those that address global support will reap the rewards. When Adyen rolled out WeChat Pay in China in 2017, its merchants could accept payment from the country’s three largest payment providers on POS terminals around the world.4 Catering to merchant needs—and creating opportunities for them to reach more consumers—is one reason that Adyen saw a 61 percent increase in revenues between 2016 and 2017.5

Operations that orbit around the merchant customer

The value proposition required from payment providers is shifting with changing merchant needs around activation and interaction with acceptance solutions. The imperative for providers? Operations must be fully focused on the merchant customer. This starts with account sign-up, underwriting and activation that is frictionless and moves easily to quick integration into the payments platform.

Improving the ongoing merchant experience is critical. Self-service options give merchants the convenience and control to focus on the fundamentals of their business and the peace of mind knowing payment acceptance can essentially “run itself.” For more complex customer service needs, payment providers should be offering multiple access channels—phone, email, live chat, chatbot, community message boards and user-friendly documentation.

Payment providers can also differentiate themselves with more advanced reporting grounded in rich data analytics. Reporting that offers insights into customer spending patterns is a clear value-add. Providers can multiply this value with data insights about competitors’ businesses and larger segment trends. By utilizing data to validate a single transaction, then multiple transactions, then cross-merchant transactions, providers will be able to deliver a fresh view of a merchant’s business. Stripe’s Sigma analytics tool makes at-the-ready payments data analytics available to all its customers.6

A merchant-first experience must seamlessly integrate all of these elements and be truly omnichannel. Things like tender and currency coverage, loyalty programs, refunds and merchant data reporting have to be consistent across channels—for merchants and for their customers.

Competing in the new world

Digital, networked and data-driven economies shift industry profit pools much faster than the post-WWII economy. The future belongs to payment providers that enable merchants to offer compelling and engaging experiences to their customers and that provide seamless experiences directly to the merchants themselves.

Look for my next blog, which will explore the corporate payment landscape.

1 Accenture, “Beyond North Star Gazing” 2018
2Ainsley Harris, “Square Takes on Shopify with New Micro-Merchant Tools” 3/20/2019
3Statista, “Retail E-Commerce Sales Worldwide
4Adyen, “Adyen Launches WeChat Pay on Point of Sale Terminals to Process Payments for 400M Chinese Consumers” 12/6/2017
5CNBC, “Meet the 2018 CNBC Disruptor 50 Companies” Adyen #16 5/22/2018
6Ryan Lawler, “Stripe Launches Sigma, a New Analytics Tools to Help Businesses Track Payments Data” 6/1/2017