White paper: Next-generation acquiring in Mediterranean countries
If merchant acquirers are to outperform increasing competition from new entrants, they must leverage platforms that integrate digital value-added apps and services from third parties rather than try to integrate their own proprietary solutions.
This is the conclusion of a new report published by AEVI that examines merchant services trends in France, Italy, and Spain, with insights from leading industry experts.
It’s been a wild ride for payment and merchant services in 2019. Traditional players are being disrupted, while new market entrants have grasped the opportunity to quickly gain market- and customer-wallet share.
Megamergers are changing the acquirer landscape, and services integrated with point-of-sale (POS) devices are reshaping transactions and even some business operations. Acquirers are also responding to competition from the likes of PayPal, iZettle and Square, among others, by more aggressively addressing the needs of SMB merchants and micro-merchants.
Once the large acquirer mergers really begin to take shape, the giants will be looking for ways to differentiate each from the others. It’s likely they’ll look externally for help in doing that as larger organization tend to be slower and less adept at responding to market opportunities.
Mike Camerling, CEO at AEVI, said: “We can expect acquirers to increase the amount of strategic partnerships and look to acquire smaller, more nimble players to add to their talent pool and refresh their innovative drive”
Superior digital and customer experiences, as opposed to price wars alone, are becoming key elements of differentiation to gain merchants’ share in the in-store environment.
“Rather than trying to integrate and connect individually with best-of-breed software developers, acquirers need an open platform that provides the interoperation of services and an app marketplace from which to select the right apps for particular merchant types,” Camerling said.
Ron Van Wezel, Senior analyst at Aité, said: “Acquiring has become a service business. Merchants are looking for acquirers to do more than just process payments. They want their acquirer to help them increase sales, contain costs in an increasingly complex environment, and provide best-in-class solutions.”
Yet this does not come without challenges, acquirers need to educate merchants about the benefits of innovation and consolidation of traditional app-based models. Michael C.G. Charalambide, CEO & MD at ECommBX, said: “Merchants might be hesitant in implementing new services because there is a lack of motivation and investment funding, I also believe that the lack of education and specialisation plays also an important role.”
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