We live in a world where we can buy anything, anywhere, anytime. The digital payments market is the largest segment within the Fintech spectrum and accounts for more than 80% of global Fintech revenues, reports Deloitte. Traditional ways to make a purchase don’t satisfy customers’ needs anymore. Instead, they seek new features and opportunities, forcing merchants to implement new payment methods and payment processing facilitators.
According to Cybersource Global Payments Study 2020, the most popular reasons for adding payment methods are to improve customer experience (60 percent), adopt mobile (44 percent), and provide access to new markets (42 percent.) Here are the hottest features that payment platforms provide to disrupt the market in 2021.
For merchants searching for ways to boost their sales, gift cards are perfect instruments to attract more consumers and increase the balance of their checkbooks. Here’s why:
- Gift cards are a $124-billion-a-year industry.
- Eighty percent of consumers have either given or received one or several gift cards in the last year.
- Seventy-two percent of gift card recipients spend more than the value of their card.
- Forty-one percent of consumers tried a business for the first time after receiving a gift card.
Gift cards combine several benefits for merchants. Gift cards are products themselves, which enriches the product assortment. They allow merchants to get paid before they sell the goods, which positively influences profit predictability. Also, gift cards invite new consumers to the merchant’s shop, and with a high probability, they will use cards and become loyal clients.
The problem with gift cards is their high setup cost makes this product distribution channel too expensive for small merchants. With infrastructure provided by large market players and the launch of cards that rely on payment companies, merchants gained more access to this selling means.
Among the features provided by paytechs in terms of gift cards are POS integration, digital (along with physical) gift cards, conversion of existing cards, fraud detection, integration with third-party gift and loyalty card solutions, reporting, and tokenization. Popular gift card platforms to integrate include Givex, Clutch, SVS, Blackhawk, and Valutec. Today, payment processing companies such as Shift4 Payments offer similar gift card programs.
Cards routinely expire or are lost, stolen, or transferred to another bank. Account Updater is necessary to monitor changes to stored customer credit card data. Such changes could affect the expiration date, credit card number, or brand. These types of changes happen to more than 6 percent of credit and debit cards on file every month according to Adyen. Visa and Mastercard use Automatic Billing Updater services to verify and update credit card data before processing a subscription payment. But what do merchants and mobile marketplaces do in the same situation? For them, it’s crucial to run the update before a consumer pays. Up-to-date account updaters process their card information directly into payment authorizations.
Whereas payment processing platforms such as Adyen provide account updater services out of the box, merchants who don’t use them are required to integrate such solutions by hand. For example, CyberSource requires their clients to generate a Pretty Good Privacy (PGP) key pair to protect credit card data contained in the response files.
Credit card payments are a quick and easy way for customers to pay for goods and services. For merchants, though, this ease results in transaction fees. Long ago when the ability to pay with a card was a privilege, the fees were justified by attracting more customers to the shop. As soon as credit cards became the new normal, merchants became burdened by these fees.
Recently, the Federal Government allowed merchants to offer a cash discount. This discount is designed to reimburse the transaction fees and remove the fee burden on the merchants’ accounts. Solutions such as PayLo by SignaPay integrate with the merchant’s POS terminal and credit card users’ extra fees while eliminating the same fee from the cash payments.