Banks, PSPs prioritising payment modernisation to compete
Global payment company BPC and research and advisory firm Aite-Novarica Group have announced the launch of a new report to give payment providers a forward-looking view of the evolution of payments and investment drivers for modernisation.
Drivers of Change in Payments: Modernising Payments to Create New Value provides an overview of global market trends for merchant payments, and several key takeaways to help advance the modernisation of existing payment platforms for banks, PSPs, and other payment companies providing payment acceptance solutions to merchants.
The report comes hot on the heels of a digital payments boom brought on by the pandemic. Global e-commerce transactions increased by 14% in 2021and e-commerce volume is projected to pass $8.3 trillion in 2025. Over half of e-commerce spending is expected to occur via mobile devices and this digitisation of global commerce has significantly increased merchant demand for payment innovation to create seamless customer experiences.
The findings from BPC and Aite-Novarica Group's joint report outline how merchants now require payment providers to support multiple payment methods and currencies, manage payments over all channels, and provide mobile-first experiences both online and offline. Increased competition has resulted in strong margin pressure, with price now a critical distinguishing factor.
"We are excited to share the insights of this valuable research, which highlights the evolving role that acquirers are set to play in the 21st century payments industry," says Jane Loginova, chief strategy officer at BPC.
"As banks increasingly focus on value-added services as opposed to sheer transaction volume, we have kept this core to our mentality as we continue to serve those leading the way in this space," she says.
The report shares how the payments industry has evolved into a complicated nonlinear space, incorporating players and capabilities that enable a merchant to securely accept any payment type, through any channel, delivered through various intermediaries. Banks and other acquirers are prioritising payment modernisation to compete for new business while reducing costs and maintaining compliance obligations.
Aite Group's senior analyst Ron van Wezel says, "Our report highlights the importance of embracing new payments technologies that can streamline processes, mitigate risk and deliver a payments service that helps the consumer as much as the business outcomes for retailers, fintechs and banks.
"We hope that our findings will be beneficial to businesses trying to navigate through the complex and ever changing payments landscape during a period of rapid digital disruption around the world," he says.
Acquirers now face evolving customer requirements in a highly competitive regulated environment rife with new entrants, rapidly changing consumer preferences, emerging payment types, and increasingly complex value chains. Acquirers are shifting from payment companies to becoming merchant service providers, who can increase sales, contain costs, and provide best-in-class solutions for payments-related needs like fraud management and data analytics.
BPC has built a strong reputation for understanding and mastering local banking and payment context and behaviour - and are poised to take on the challenges faced in a highly digitised global economy. With 350 customers across 100 countries globally, BPC has collaborated with all ecosystem players ranging from tier one banks to neobanks, Payment Service Providers to large processors, ecommerce giants to start-up merchants, and government bodies to local hail riding companies, contributing to better financial inclusion using next-generation technology.