Merchants, service providers must evolve together, Ingenico finds

Given the transformative effect digital payments have had on the consumer-merchant relationship, Ingenico, a global leader in payment acceptance solutions, worked with consulting firm Edgar Dunn & Co. to identify ways to overcome the biggest barriers to achieving success in the new consumer-merchant landscape.

The bottom line, researchers found, is that merchants need to renew their value propositions and continue to adapt to the evolving customer needs and market dynamics.

Reflecting on the survey's findings, Tim McWeeney, head of sales-indirect acquiring and ISO at Ingenico, said, "With how quickly the retail landscape is evolving and all the new technological advancements and innovations, it's more important now than ever for merchants and payment service providers to continue to evolve together."

This means aligning strategies with merchant requirements and leveraging innovative solutions as well as prioritizing merchant-centric approaches to better navigate the complexities of the retail landscape and drive sustainable growth for all stakeholders, Ingenico noted. 

"To foster innovation in the market and create new payment models, merchants and payment providers should be open to collaboration and strategic partnerships," McWeeney said. "Adopting proactive approaches, embracing innovation and prioritizing the needs of the merchants are ways that payment service providers can work together to navigate the ever-changing industry."

Evolving opportunities

Researchers surveyed both industry players and retail merchants in the study and identified the following challenges and opportunities:

• General market trends: Among the trends, biometric payments stand out as an innovation gaining traction, while the Internet of Things emerges as a promising yet less established technology with significant future potential.

• Enhanced customer engagement: Merchants face challenges in linking customers to past transactions in physical stores, but solutions like e-wallets and omnichannel analytics are addressing this, while unified commerce strategies facilitate personalized offers and streamline payment processes for a consistent customer experience.

• Reduce costs and complexity: Reduce manual intervention, enhance merchant onboarding efficiency and drive ongoing digitization efforts for improved merchant services.

• Create new revenue opportunities: This can enhance customer retention as well as open new business verticals.

• Implement new technologies: Merchants must embrace new payment technologies to meet evolving customer needs, prioritizing functionality, security, and seamless integration.

• Leverage data analytics: Leveraging Al and predictive analytics, payment providers can empower merchants to optimize KPIs and drive sales growth while strengthening merchant loyalty through access to valuable payment-related data.

Wide collaboration beneficial

McWeeney noted that collaborations with not only merchants, but also companies across the payment ecosystem enables payment service providers to reach a broader audience while simultaneously reducing internal development costs. "These collaborations assist in creating faster innovation cycles while allowing payment service providers to meet the merchant's needs and access the emerging technologies efficiently," he said.

McWeeney also pointed out that achieving a seamless customer journey is crucial, but with today's diverse customer interactions, "there is no standardized approach," and merchant collaboration enables service providers to "better tailor individual consumer journeys."

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