IoT and omnichannel mean faster pay's not enough for acquirers

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The future of commerce has arrived, and our new omnichannel world has opened up a host of risks and opportunities for acquirers.

In this new reality, it’s no longer enough for acquirers to offer merchants fast payment processing. Payment speed and uptime are now mere table stakes in the play for strong acquirer-merchant relations. The competitive edge for acquirers comes from understanding the new complex dynamic and by being a true partner, and not just in payments.

We are living in the age of the omnichannel offering. Merchants don’t just stick to the binary simplicity of online and offline anymore. They are reaching their consumers through a wide array of channels including mobile, kiosks, chatbots, call centers and more.
This proliferation of commerce channels brings with it considerable payment complexity. One complication is the blurred distinction between online and offline transactions. For example, a recent Mastercard report incorporating research and analysis from The Economist Intelligence Unit shows that 35% of retailers have merged the online and offline experience through offering "click-and-collect" services.

It’s the same story across all sectors. In order to stay competitive, merchants need to offer their customers multiple ways of sealing a purchase, and for that they need more sophisticated payment systems. As a result, these new channels are changing the way merchants think about their business.

The multichannel relationship with their customers offers significant opportunities to refine their marketing, merchandising, promotions and payments strategies. It also brings with it a dizzying number of technologies that all must work together seamlessly.

As an example of innovation in this area, Disney has introduced a “Magic Band” program that allows customers to charge food and merchandise purchases to their Disney resort hotels rooms, unlock their rooms, enter the parks and more.

This environment provides a rich opportunity for acquirers. Just as merchants learn to think like their customers, acquirers must always think like their merchants. Those that can identify ways to make their merchants’ lives easier, by understanding payment performance improvement in areas such as fraud, authorization, spend and more — are the ones that will gain the most from this new dynamic.

Think of contactless technology, which can speed up the payment process for both merchants and consumers. One quarter (24%) of Europeans expect to start using “tap and go” contactless payments with a smartwatch, bracelet, key ring or other forms of wearable payments, according to new figures from Mastercard.

Consumers aren’t interested in the complexities of payment processes, so merchants need to swim like swans: all grace and elegance above water while they paddle frenetically under the surface. They need to offer a frictionless payment experience — regardless of the channel customers choose to complete their purchases.

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