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Navigating the sented with many technology options, but they really
just want something that works.
challenges of 2020 I'm not here to say there's no reason to worry. But change

presents opportunities to those who want to try and
control their future, rather than hunkering down and
hoping the storm passes over them.
Battle of the giants

Deloitte's Payments trends 2020 report says large banks are
moving away from partnerships that allowed them to offer
payments-related services such as merchant acquiring. So
it's no surprise big acquirers are trying to bulk up, develop
and integrate new channels in their efforts to fill the gap
being left by those banks.

The consolidation will undoubtedly impact all our
futures. But the impacts aren't necessarily bad or coming
along with the velocity of a runaway train. The larger
the merger, the longer it takes to deal with the internal
reorganizations and inevitable staff defections, before
the new organization can really create and execute new
strategies.
By Victor Fenix
AEVI Once those mergers really begin to take shape, the giants
will be looking for ways to differentiate each from the
he U.S. economy remained robust during 2019. others. It's likely they'll look externally for help in doing
But many smaller acquirers and ISOs, along that (as it's practically a given that a larger organization
with their small business merchant customers, will be slower and less adept at responding to market
T probably share a common sentiment: If busi- opportunities). I expect they'll increase their reliance on
ness is so great, why am I so worried? My advice is cheer partners and look to acquire smaller, more nimble players
up, and let's get ramped up for 2020. to add to their talent pool and refresh their innovative
drive.
Undoubtedly, part of the uneasiness among merchants Winning in a commoditized market
and service providers can be attributed to the certainty
that all boom times come to an end; it's something nobody Nimbleness will be a vital asset for industry players for 2020
can predict with certainty. But there are other dynamics at and beyond. Payments are increasingly commoditized,
play that also may be disconcerting, namely technology which means players must battle for greater market share
and competition. Merchants and their payment service or develop new revenue streams (or, better, both).
providers alike must deal with challenges in 2020:
As large acquirers slug it out for global reach and market
• Smaller acquirers may be unsettled by the consolida- share, smaller acquirers and ISOs must deal with the
tion at the high end of the market, with the respec- ongoing challenge of technology companies and new
tive mergers of Fiserv–First Data, FIS–Worldpay, and breeds of payment players trying to disintermediate the
Global Payments–TSYS. traditional relationship of merchants and their payment

• ISOs are, or should be, worried about commoditiza- solution providers.
tion of payment services and competition from pay- Payment facilitators such as Stripe, and payment
ment facilitators, aggregators, independent software
vendors (ISVs) and value-added resellers (VARs). At aggregators such as Square, are betting their futures on
being able to deliver payment solutions in a more efficient
some point they must make a choice about whether
to take sides in the battle between open and closed manner that allows them to bundle in more value-added
services than traditional players.
payments solutions.
• Merchants are continuing to feel the adverse impacts The writing is on the wall for ISOs and smaller acquirers:
from the growth of online commerce, are seeing PARTNER UP! Large acquirers have access to capital
many of their peers closing up shop, and wondering markets, and nontraditional players are digging into the
just what they're supposed to be doing to provide a deep pockets of venture capitalists. Smaller traditional
better consumer shopping experience. They are pre- merchant services providers can't survive by going it alone;
they need to become part of a larger ecosystem that allows
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