Before implementing a new payment method, payment experts must consider a few things:
Understanding your business;
Understanding the market you operate in;
Understanding your audience.
Once the above are identified, it is important to define how you want to position your company in terms of payment methods. To move forward, merchants should conduct an additional, in-depth analysis together with their PSPs, discuss with other merchants, and even consider gaining more knowledge on the topic by reading educational industry reports to have a clear overview of how they can achieve their goal. It is also important to align internally with your tech and product teams to ensure the project can be delivered on time.
Finally, it might be worth requesting marketing funds from the vendor to help promote the payment method either at the launch date (depending on its popularity) or once performance parameters are met and you receive the green light for promoting the payment method.
The main challenge is to find and compare all reliable information to help you choose which payment method would be the best fit for your business. At the same time, seeing the correct implementation of the strategy by the tech team might be complex and difficult to fit in within the roadmap. Hence, it is important that the project gets properly sized in terms of generated revenues once implemented, and this should be handled as the number one priority.
In terms of commercials and contracts, merchants should make sure that within the analysis, pricing has been benchmarked and the company gets a competitive rate. As for the agreement, the Legal team should be allowed enough time to review the proposal and make any necessary assessments to it.
Lastly, adding relevant payment methods that fit your users’ needs is a game changer, as this translates into generating additional revenue that otherwise wouldn’t have been accessed by having, for instance, a standard payment offering. At the same time, the engagement also increases, as users feel related to the company by the product/service offered.
Both Gen Z and millennials are already the drivers in this ecosystem. They are digital-first generations, and they will represent approximately 75% of the working population within the following five to ten years. Simultaneously, they are curious and eager to experience new opportunities, and they never seem to settle for less.
Thus, we should expect to see further developments in the contactless world, such as QR code payments, with biometrics playing a key role. Alternative types of payments such as crypto and BNPL are already well embraced, and their demand will keep on growing, driving digitalisation and financial and social inclusion to two generations who have been through serious economic downfalls in the past two decades.
Finally, it is important to mention the role super apps play into this transformation. Payments are part of it, and ecommerce is forced to easily adapt to it, so it will be interesting to observe their role in the grand scheme of global payments in the future.
This editorial piece was first published in the Payment Methods Report 2023, which provides an in-depth overview of the latest worldwide developments in how people pay, the payment methods space, the innovative technologies that these methods work upon, and the best strategies on how to win at conversion and retention.
Pedro Bennasar, Head of Payments, Vestiaire Collective
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