Acquirers, independent sales organizations and payment facilitators need to rethink their growth strategies in response to the recent enormous growth in integrated payments. Integrated payments means the capacity to enable a multiplicity of payment forms in-store, online or by app.
Today’s merchants want their payment partner to handle all kinds of physical and digital payments at Point-of-Sale and online, as well as business management functions such as inventory management, invoicing and more.
RS2’s most recent study shows integrated software vendors (ISVs) stealing a march on traditional acquirers in the US market – and how their influence is growing world-wide.
McKinsey & Company estimate[1] two-thirds of US small and medium enterprises (SMEs) are either currently using an ISV to fulfil their payments needs or are planning to do so.
What’s more, merchants appreciate the specialized services offered by ISVs: research from Visa[2] says US merchants remain with their ISV longer than they do with traditional acquirers.
Elsewhere in the world, Ernst & Young say[3] more than 50% of all payments in the Middle East and Africa will be run through ISVs by 2030.
In their white paper, RS2 outline the factors that have led to this situation, and set out the way in which acquirers, wholesale ISOs, payment facilitators and others need to change their approach in order to win business in the fast-growing ISV market.
Whereas most discussions about how acquiring providers should address ISV needs have focused around monetization, RS2 argue that ISVs want to move beyond the delivery of quality merchant services to create partnerships with providers that understand the complexities of their target vertical segment or niche vertical and can deliver to those complexities.
Strategic options discussed in this white paper include specialization, the importance of solution and platform flexibility, and the ability to recognize and respond to the specific needs of certain high-growth verticals.
As they continue to grow at pace, RS2 explain that ISVs need reliable, always-up services that can evolve and scale to match their ambitions.
RS2 say ISVs’ selling proposition to merchants depends on a modern platform that meets both their growth plans and those of the merchants they serve.
By Alex Rolfe
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For more on how and why acquirers, ISOs, payfacs and others should change their strategy to win more business from ISVs, download the new white paper from RS2 now.
[1] McKinsey & Company, 22 September 2022, “As ISVs disrupt payments, can acquirers stay relevant?”
[2] Visa Inc, 2019, “Integrated Payments: Strategy Considerations for Acquirers”
[3] Ernst and Young, 14 October 2022, “The Rise of Integrated Payments Platforms”
