Voice of the Industry

A CFO's secret to growth in an economic downturn — efficient payments

Thursday 26 January 2023 11:03 CET | Editor: Irina Ionescu | Voice of the industry

Shaun Puckrin, VP of Product at Checkout.com, talks about the trends in the payments industry in 2023, focusing on business solutions that can help merchants and PSPs thrive in a dynamic and uncertain economic environment. 

One thing is already clear in 2023, digital payments are more important than ever as a tool for businesses to thrive in a dynamic economic environment. While this year brings continued uncertainty for merchants across all sectors, establishing strong foundations and cost efficiencies now will enable profit growth and unlock long-term success in the years to come.

2023 will be all about payments efficiency and acceptance rates

In times of tough economic conditions, businesses always focus on where they can achieve efficiencies. 2023 will see merchants turn to payments to find those. 

Improving acceptance rates by using machine-learning that is trained on billions of data points to optimally retry transactions, alongside taking a localised approach to payment preference, will be more important than ever. 

The best merchants will take an even more forensic approach, understanding that there are hidden treasures at every step of the payment journey and working with payment providers who have the technology and capabilities to unlock them could prove beneficial for all parties involved.

Using 3DS and exemptions appropriately will be one area where merchants can find improvements. The technology is now mature enough that compliance doesn’t need to be a box ticking obligatory exercise, but, instead, can deliver superior customer journeys. New capabilities such as delegated authority gives merchants more control to hone payment experiences to suit individual channels and customers. This is a big step change from the default measures that merchants have been used to, and expect them to take advantage. 

Many legacy payment providers will struggle to fully support merchants in navigating and enabling these opportunities, so we’ll see a move to PSPs that can offer depth and breadth of capabilities in a single platform, alongside ‘human’ expertise.

2023 will also be the year where embedded finance will go mainstream and it might be accelerated by merchants reacting to a tougher economy. Payments will evolve into money management, because merchants have more to gain by operating at the intersection of money coming in and going out.

Payments will be front and centre for US merchants

Last year saw a lot of talk about the rise of new payment methods, but established methods continue to lead the way. Right up there will be digital wallets, notably Apple Pay and Google Pay, as customers increasingly reach for those first. They’ll become ‘must-haves’ in the list of payment options that merchants offer. At the same time, people can expect to see ACH and PayPal maintain their 10-15% market share. 

The big shift for 2023 will be more attitudinal. The tougher trading conditions we expect will see merchants think differently about payments. They are far more literate these days and understand there are big gains to be obtained from optimising their payment operation. 

With pressure on sales and profits, we can expect a focus on activating those gains. Part of that narrative will be about unlocking new revenue streams, such as through improving approval rates and exploring embedded payments. 

However, more merchants are expected to take a closer look at cost efficiencies. Big merchants with large volumes could insert themselves into their flow of funds to negotiate fee reductions and optimise interchange fees. Others will be looking at payment methods such as pinless debit, where they can save up to 80 basis points per transaction. Leveraging Network tokens will also be on merchants’ radars.

More broadly, the drive to save on costs and unlock new revenue streams will lead to merchants simplifying their payments stacks and moving away from API layering. 

Thus, we can expect a higher adoption rate of integrated platforms, where gateway, processor, and fraud prevention solutions are native. The customer will be the ultimate winner in this, with merchants able to build better payment experiences. It will also bring much needed transparency to a payments industry that has been too complex and opaque. In turn, we will see even more merchants engage with the full range of benefits that payments can bring.

Learn more about what's on the payment leader's agenda in 2023 here.

About Shaun Puckrin

Shaun Puckrin is a VP of Product at Checkout.com, working closely with the global product and engineering teams to design and develop cutting edge payment solutions for enterprise merchants. Before joining Checkout.com, Shaun was CPO at Worldpay and Global Processing Services.



About Checkout.com

Checkout.com is a global payments solution provider that helps businesses and their communities thrive in the digital economy. Purpose-built with performance, scalability, and speed in mind, our modular payments platform is ideal for enterprise businesses looking to seamlessly integrate better payment solutions. With a global team spread across 21 offices worldwide, we offer innovative solutions, valuable insights that help you get smart about your payments’ performance, and expertise to help you navigate the complexities of an ever-shifting world.

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Keywords: online payments, payment processing, payments , PSP, merchant, merchants, digital wallet, digital payments, local payment method, 3-D Secure, embedded finance, embedded payments, cash management, e-wallet, checkout optimisation , debit card
Categories: Payments & Commerce
Companies: Checkout.com
Countries: United States, World
This article is part of category

Payments & Commerce


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