Merchants need payment tech's help to digitize successfully
The case for the payments industry to help merchants digitize and transform their businesses has never been stronger.
A recent report by American Express stated 58% of consumers who have used contactless payments are likely to do so now more than ever before. While this presents a great opportunity for modern payments technology providers, it poses a challenge for merchants who haven’t focused on transforming their businesses to embrace this payments revolution.
“Digital wallets” are more than just a trend or buzzword for merchants, they are becoming the bare minimum for businesses to succeed. In one study, digital-focused merchants – where 50% or more of total sales occur online – exhibited the highest rates of digital wallet adoption, with 70% having a digital wallet integrated on their e-commerce site and 71% on their mobile app. The greatest disparity in digital wallet use is with brick-and-mortar merchants, who have less than a quarter sales from online channels, where adoption reduces to 54% for e-commerce sites and 50% for mobile apps.
With accelerated demand for digital payments since the outbreak of COVID-19, merchants must adapt fast. Now is the time for digital payments transformation, and there are specific avenues where payments providers can help merchants accomplish their payment digitization goals.
The value of global digital payment transactions is projected to reach $4.6 trillion by 2021 as “frictionless” payment technologies are destined to become the backbone of the payments landscape worldwide. But where does this leave merchants who are primarily looking to better manage and grow their businesses?
Merchants can gain access to custom software solutions that go beyond POS solutions and contactless payment technologies, and get an all-in-one technology suite to help run their businesses when they partner with strategic payments partners. More often than not, the latest payments providers have access to tools and resources that can help merchants digitize their business inside out, which means rebuilding processes, bolstering software, and managing bookkeeping.
Payments technology can be more than just a platform for merchants to use – they can be fully immersive. Payments providers can take the responsibility to digitize a merchant’s business, an effort that will create a long-term mutually beneficial partnership.
Traditionally, merchants have had limited financing options to invest in their businesses and grow their operations and technology capabilities – but this is changing. Payment providers have the ability and opportunity to play a major role in helping with specialized credit financing and investment solutions that are uniquely built to help merchants scale, grow and manage their business. Enhanced digital integration through financial and transformational support from a third-party payment processor can provide the merchant with a long-term and high-value partnership, rather than a one-time business boost.
Whether it is extending a merchant’s credit line or offering easy banking alternatives, payment processors are bound to benefit as merchants gain a direct line of access to qualified creditors and superior banking options that allow them to offer the best services to their consumers.
Businesses have some catching up to do, as sales statistics prove the importance of convenience as a competitive advantage. According to J.P. Morgan, mobile devices in the U.S. accounted for 27% of all retail ecommerce sales in 2018, with average order totals being double the amount when compared to individuals not transacting on mobile devices. Payments providers can guide merchants to become more customer-centric, knowing how rising consumer demand for in-app purchases is making mobile and social selling offerings key to retaining and gaining new customers.
With today’s consumers relying on digital, mobile and social tools for their buying needs, merchants need to integrate customer-centric approaches in their business by developing digital and social sales and commerce solutions. Payments providers can help merchants’ access modern sales and commerce solutions that enable them to activate consumer engagement and improve the ROI with every transaction.
While the correlation between the digitization of merchant payment operations and success for payment providers may not have been as clear in the past, there is a significant untapped revenue opportunity for payments providers to ensure merchants modernize their payments solutions to better attract and engage consumers. Success for payment providers will be guaranteed if they step up and bring merchants a digital transformation journey that is poised to help them thrive in a fast-changing digital payments landscape.