How integration is changing the payments landscape

By Heather Gray | 2 June 2017

The payments landscape has changed drastically in the last few years, with more and more people embracing emerging payment methods, and driving growth across borders. This can make it difficult for merchants to keep up; particularly if they have outdated payments platforms underpinning their ecommerce sites and apps. To remain one step ahead, integrated payments are becoming an increasingly popular option, as they operate on a model of one-to-many payments to provide a ‘one stop shop’ solution to their merchant clients. An integrated payments platform is capable of seamlessly amalgamating payments processing with business software including sales, accounting and marketing tools, within a single website or application, all managed via a single interface. This streamlined approach not only benefits the merchant, but every party involved within the payments ecosystem.

Integrated payments have been gaining traction in the US and Canada, and adoption is growing in the UK and across Europe, as merchants look to a solution that is capable of processing payments efficiently and securely. Integrated payments platforms have taken off in a number of industries - especially those enabled by technology, such as the food and travel industries - and in sectors where the gig economy is embraced, as they provide a simple way for a master merchant to onboard sub-merchants quickly.

A frictionless payment process is an essential component driving the adoption of integrated payment platforms. With integrated payments, a customer benefits from the convenience of being able to complete a transaction via a single app, with the payment being made directly to the master merchant. The sub merchant receives an agreed percentage of the payment, with the PSP taking its processing fees. All of this happens in real-time, and because the platform can be connected to other software, many other processes can be automated, making the whole process more cost-effective and less resource intensive.

Automating the merchant onboarding process is another reason that integrated payments are growing in popularity. Traditionally, the merchant onboarding process is slow and vulnerable to errors due to the manual nature of the data entry and compliance checks; however, with integrated payments, the entire process can be completed in minutes, rather than days or even weeks and months, allowing merchants to begin accepting payments almost immediately. Onboarding is often seen as a huge challenge in the one-to-many payments model; however, by replacing traditional paper applications with a fully automated User Interface (UI), back-end checks and decisions can be made almost instantly; eliminating paper, wet signatures, and the burden of time and resource when it comes to admin.

Value Added Resellers (VARs), Independent Software Vendors (ISVs) and Software as a Service (SaaS) providers have begun to take note of the benefits of rapid onboarding, removing the slow, complex, and costly barriers of managing payment processing for their clients. This is another area ripe for rapid growth, with the majority of integrated payments solutions accessible via an API. It’s a fast and simple way to utilise a one stop payment platform that will work straight out of the box, rather than having to build their own payments infrastructure, or rely on plugging in functionality from several different providers, making the process unnecessarily complicated. By having a single point of integration, resellers are able to handle onboarding more efficiently, as merchants no longer require multiple solutions to process different types of transactions.

The application of integrated payments has been primarily domestic, but there is huge scope for merchants to rapidly expand across borders thanks to the flexibility of these platforms. Adding new payment methods or currencies to serve new territories can be completed far more quickly as the functionality is already built into the platform.

One of the biggest markets still yet to benefit from integrated payments is tech. Whether it’s an app needing to complete in-game purchases from users across the globe, or a music streaming app needing to process regular payments for its subscribers, integrated payments is the perfect solution. In addition, as tech companies are already well versed in development projects, implementation can often be completed in-house.

Another area ripe for payments innovation is the field service sector. Traditionally, if an engineer is called out on an emergency, payment is made via cash, cheque, or bank transfer, which can mean waiting for days for a payment to clear, impacting cash flow. But imagine if the service engineer was signed up to a platform that allows them to connect with customers where they can settle payments on the spot via an app; not only can they accept payments instantly, it also eliminates the need to manage their own website, or invest in developing a way of accepting new payment methods themselves. The field service industry has the potential to be a very lucrative market for resellers and PSPs, with scope to be very profitable as it scales.

There are many other untapped industries too. While banking and finance is being reshaped by new entrants, other incumbent businesses, for example those in legal and insurance services, have so far been slower to explore new technologies. Adoption of integrated payment solutions across the board will, of course, all very much depend on how people’s payment habits change over time, but there are huge opportunities in practically every sector. The key to the future success of integrated payments will be centered around meeting the needs of consumers as their payment preferences continue to develop in the years to come.

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