In the payments industry, change can come at you fast. New trends and innovative technologies can have a sudden and dramatic impact on consumer behaviors. Merchants, in turn, start looking to their acquirers and merchant service providers to help them keep up with new demands.
To keep pace with the rapid evolution of digital payments in the global economy, these providers need to offer a greater level of value and service than ever before. What sort of value-added services are merchants hoping to get from their service providers, and what can acquirers and payment processors do to meet their expectations?
We've also seen open banking initiatives that opened the door for disruptive fintech startups to introduce brand new ways of making electronic fund transfers.
Consumers want what’s new and convenient. Merchants want to keep their customers happy. This leaves the acquiring banks, payment processors, payment facilitators, and other merchant service providers (MSPs) who make digital transactions possible faced with new expectations, stiffer competition, and a rising tide of online fraud and disputes.
What will keep merchants happy—and loyal—are value-added services that go beyond the basics of processing and settling transactions. Acquirers and other “traditional” MSPs now have to compete with a new generation of integrated software vendors, or ISVs, who legitimately have a lot to offer the typical small business retailer. To stay relevant, providers need offer compelling add-on solutions of their own.
In the context of the payments industry, value-added services can describe any features or solutions that go beyond the minimum requirements of processing and handling payments.
Here are some of the value-added services that merchants are most interested in:
The possibilities don’t end there. Corporate credit cards, customer relationship management integration, and loyalty programs are just a few more ideas for value-added services that have been gaining traction in the payments space.
Many smaller retailers are flocking to ISVs like Square, who combine easy onboarding with a suite of helpful features designed to make payment acceptance easy and hassle-free. To compete with them, MSPs need to be able to offer comparable services and value.
As things currently stand, about half of all small businesses are choosing ISVs for their payment processing needs. Providers who operate on a more traditional model may be more cost-effective and scalable as retailers grow, but that doesn’t mean you have to cede the field to the upstarts and wait (and hope) for merchants to outgrow them.
One of the smartest things MSPs can do to level the playing field is to partner up organizations who specialize in particular value-added services.
Rather than creating services for invoicing, fraud prevention, data analytics, and chargeback management in-house, MSPs can form partnerships with companies who already have a proven track record in those areas.
This combination of innovation and reliability will be particularly important for merchants who are trying to navigate the challenges of the new omnichannel-focused global marketplace.
In an increasingly interconnected and technologically advanced world, it’s no longer business as usual for acquirers and other MSPs. To support your clients through the many challenges they face—whether it’s reaching diverse customer segments across a multitude of channels, accepting the latest cutting-edge payment solutions, or fending off sophisticated cyberattacks—you have to be willing to provide a multitude of value-added services.
Given the prevalence of online fraud and the high costs of the payment disputes that accompany it, offering fraud and chargeback services is one of the best ways to provide real value to merchants.
By partnering with a company that has expert knowledge and years of experience dealing with chargebacks, you can help merchants protect their revenue and avoid the worst consequences of fraud and first-party misuse.
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