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Merchant acquirer report: Merchant services up for a challenge in 2020

If merchant acquirers are to outperform increasing competition from new entrants, they must leverage platforms that integrate digital value-added apps and services from third parties rather than try to integrate their own proprietary solutions.

That’s the conclusion of a very interesting new report published by AEVI that examines merchant services trends in France, Italy, and Spain, with insights from leading industry experts.

It’s been a wild ride for payment and merchant services in 2019. Traditional players are being disrupted, while new market entrants have grasped the opportunity to quickly gain market- and customer-wallet share.

Mega mergers are changing the acquirer landscape, and services integrated with POS devices are reshaping transactions and even some business operations. Acquirers are also responding to competition from the likes of PayPal, iZettle and Square, among others, by more aggressively addressing the needs of SMB merchants and micro-merchants.

AEVI European Acquiring report

 

“Acquiring has become a service business. Merchants are looking for acquirers to do more than just process payments,” explains Ron Van Wezel, Senior analyst at Aité. “They want their acquirer to help them increase sales, contain costs in an increasingly complex environment, and provide best-in-class solutions.”

Once the large acquirer mergers really begin to take shape, the giants will be looking for ways to differentiate each from the others. It’s likely they’ll look externally for help in doing that as larger organisation tend to be slower and less adept at responding to market opportunities.

“We can expect acquirers to increase the amount of strategic partnerships and look to acquire smaller, more nimble players to add to their talent pool and refresh their innovative drive,” says Mike Camerling, CEO at AEVI.

Superior digital and customer experiences, as opposed to price wars alone, are becoming key  elements  of  differentiation  to gain  merchants’ share  in  the  in-store  environment.

“Rather than trying to integrate and connect individually with best-of-breed software developers, acquirers need an open platform that provides the inter-operation of services and an app marketplace from which to select the right apps for particular merchant types,” Camerling continues.

Yet this does not come without challenges, acquirers need to educate merchants about the benefits of innovation and consolidation of traditional app-based models. “Merchants might be hesitant in implementing new services because there is a lack of motivation and investment funding, I also believe that the lack of education and specialisation plays  an important role,” says Michael Charalambide, CEO & MD at ECommBX.

Spain, Italy, and France share similarities in payments, yet each market has major differences. While France remains strong in checks, Italy has experienced a significant growth in instant payments. The report sheds light on new trends in the rapid changes impacting merchant acquiring in the individual markets of Spain, Italy and France.

To read the report CLICK HERE

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