Article
DEC 04 2024
How banks can help merchants adapt to changing customer preferences
In today’s fast-paced, digital world, consumer payment preferences are constantly evolving, and that puts merchants under pressure to keep up with and meet these shifting demands. Banks, credit unions and other financial services providers are well-suited to support the payments needs of their merchant clients. Though they may not directly house all the key technologies or solutions that are available today, they can leverage connections with trusted payment partners to offer merchants the infrastructure, technology or support services they require. In this way, institutions can strengthen their relationship with merchants and maintain their competitive edge.
The growing importance of securing personal and finance information
Consumers are hypersensitive to having their personal and financial information compromised. These concerns extend to their interactions with merchants, who must be trusted with payment information. Financial institutions can work with merchants to ensure payment information is secure. This starts with adhering to evolving regulatory requirements and compliance standards. The Payment Service Directive 2 (PSD2), Instant Payments Regulation, GDPR and, most recently, the Digital Operational Resilience Act (DORA), which comes into effect at the beginning of 2025, are some of the critical requirements.
To ensure compliance, financial institutions can turn to trusted payment partners who are well-versed in managing security risks and can help achieve regulatory compliance. By partnering with an acquirer or payment service provider, institutions are better able to address data privacy, cybersecurity, digital identity authentication and regulatory compliance challenges, thereby enhancing security for merchants and their customers.
The rise of alternative financing and payments methods
As consumer demand for alternative payment and finance choices – such as digital wallets, Apple Pay, Google Pay, ACH, direct debit and buy now, pay later – increases, merchants find themselves needing these solutions to remain competitive. Consumers want seamless, secure and personalized payment experiences. Online shopping and the increasing use of mobile devices have driven the need for easier and more flexible payment options. Customers now expect faster transactions, innovative payment methods and enhanced security.
Payment service providers can play a crucial role in helping meet these evolving consumer preferences. By partnering with a trusted payment provider, financial institutions and merchants can leverage expertise and advanced technology, ensuring their payment systems are up to date with the latest consumer trends.
Meeting the growing payment demands from eCommerce
eCommerce is one of the primary drivers of merchant sales. In fact, eCommerce sales are forecast to hit $6.3 trillion in 2024, up 30% from 2021. With this significant growth comes demand for the aforementioned alternative payment methods, prompting a surge in digital wallet usage, contactless payments and mobile banking apps. Fintechs and modern payment companies are adapting to this trend, offering innovative online payment solutions that cater to consumer preferences. In order to level the playing field with payment competitors, financial institutions are increasingly focusing on offering similar solutions to merchant clients.
For institutions that have not taken on the complex integrations required in building such applications, payment providers offer an alternate path, providing bespoke technologies and solutions. These providers specialise in payment processing and offer state-of-the-art acquiring services, thus enabling financial institutions and, by extension, merchants to access advanced online payment technologies. By partnering with an acquirer, institutions and their merchant clients can stay ahead of the curve in the eCommerce space, offering seamless payment experiences that meet customer expectations.
Payments are going global
For merchants looking to expand their business, reaching customers beyond their borders is key. Globalisation has created the unique challenge of facilitating cross-border trade and managing the resulting international transactions. The eCommerce platforms and digital payment solutions now available have made it easier for merchants to engage in cross-border transactions. Financial institutions and merchants must adapt to the demands of global customers by offering efficient and cost-effective international payment options.
Payment providers enable access to advanced payment technologies that facilitate cross-border transactions. They provide multicurrency support, localised payment methods and efficient settlement processes. By partnering with the right acquirer, institutions and merchants can expand their horizons and tap into global markets, offering their products and services to customers around the world.
The advantages of partnering with an acquirer
As macroeconomic factors continue to shape payment behaviors, financial institutions and merchants must adapt to the changing landscape to effectively meet customer needs. By partnering with a payment technology company, offering specialized acquiring services, institutions can provide advanced payment technologies that enable their customers to accept payments in a safe, personalized manner, and with global reach. It enables merchants to offer multiple payment options, enhance the overall customer experience and streamline financial operations. By partnering with an acquirer, financial institutions can empower their merchant clients to navigate these changes seamlessly, offering innovative and personalized payment solutions that meet changing customer expectations in the evolving payment ecosystem.