By Marco Conte
The volume of global digital payments is set to triple this decade. That’s according to research from PwC.
For merchants, this growth creates opportunities as well as new business pressures.
The choice of the payment service provider (PSP) and payment methods is not simply a requisite for doing business. It has become a strategic decision that has real, bottom-line business impacts — impacts that will only grow in the coming years.
The APAC region will lead the way in future digital payment volume through 2030, PwC writes. Europe is the second-largest region by volume and will account for more than 500 billion such transactions annually by the end of the decade.
Some of the top merchant acquirers in Europe include:
Some of the top merchant acquirers in the US include:
But payment services are not consolidated around a group of top companies — not in Europe, nor in any other region. Merchants are spoiled for choice in the offerings available to them. This is what makes it so hard for those businesses to develop a payment strategy.
Merchants have to consider several factors when vetting PSPs:
There are hundreds of payment methods available worldwide. Here is a broad overview of some of those options:
Keep in mind the local context of these decisions. Some payment methods are global. Some are specific to regions or national markets. Before expanding into any new market, merchants must understand what options are locally available.
Protection requires a proactive, strategic approach. Having 3-D Secure alone is insufficient, and merchants cannot rely on card providers’ fraud and chargeback monitoring programs.
Further, merchants need to know how vulnerable they and their products are to fraudsters and customer complaints.
For many merchants, it makes sense to have a dedicated solution for fraud prevention or to enable similar tools if PSPs provide them.
Most merchants find that they should have at least two PSP integrations in place to avoid any business disruptions.
Some businesses might find that any two or three of the biggest PSP brands — Stripe, Worldline, Adyen, Worldpay, JP Morgan — plus other direct integrations is enough for their needs, and they can do that in-house. Other merchants might conclude that a better solution is to have a payment orchestration layer to facilitate switching among providers, and implement routing and retry logic.
Once the merchant’s payment stack is live, a new challenge emerges. The merchant must then have processes in place to monitor payment data so that the business can optimize its revenue.
Again, complexity can make this incredibly labour-intensive. Most merchants have to rely on someone on the team who can spend hours collecting payment data from all of those PSPs just to reconcile sales and incoming transfers. That person likely has no access to an analytics tool or even industry benchmark data to assess the performance of those payment systems.
This means the majority of merchants have no meaningful way to determine whether the payment systems they’ve strategically and meticulously assembled are actually working optimally.
At Congrify, our mission is to support these merchants by: