In a recent article, we discussed the increasing merchant pressure on PSPs. Much of this pressure is due to the global nature of e-commerce and the need to provide fast and seamless payments, whether domestic or cross-border.
In the following excerpt from our new white paper ‘PSPs: Why Does Your Choice of Acquirer Determine Your Future Success?’, we look at how PSPs must confront global challenges, such as language and regulatory barriers, in order make frictionless payments a reality.
From our analysis, one of the best ways to meet these challenges is to find the right partner.
The Global Imperative
For PSPs, going global represents an immense opportunity to significantly increase the number of customers as well as the number of transactions. However, due to the changes rapidly occurring in the PSP space, it is no longer only an issue of increasing their customer bases and profitability. Going global has become an essential part of PSP anti-churn strategy to keep their current customers, who can easily be persuaded to move to service providers who enable a fast and smooth entry into the world of global e-commerce.
From multiple directions, such as well-positioned players who are ready to enhance their offerings to their established customer bases. Threats to traditional PSPs are also coming from the ongoing evolution of the PSP market, which has begun to consolidate, but has not yet reached maturity. Signs of the beginnings of consolidation can be seen in Europe’s increasing M&A activity, which has started to create larger and more powerful PSPs. This advancing market maturation has begun to put pressure on the smaller PSPs, who will need to find new ways to maintain their market share and profitability.
Their best bet is to partner with a well-positioned acquirer that can whisk them onto the global scene, quickly and inexpensively.
Traditional PSPs are recognizing the critical need to maintain and expand their market share, and understand that the surest way forward is to take an active part in the global economy. However, many PSPs, despite this understanding, are stuck – lured by the profitable niche that has been created, but confused and uncertain about what to do next. They are often overwhelmed by the potential complexity of multiple integrations with new global partners – as well as by the need to utilize their often insufficiently-equipped current set-ups for these complicated processes.
Which of these PSPs will succeed in connecting their customers to this enticing opportunity? Most likely it will be those who have understood that they can’t do it alone.
They need to identify and cooperate with the right partner – a partner that can compensate for what they are lacking (know-how, knowledge, connections, contracts, technology, legal and licence infrastructures, and funding) – that can quickly help them turn the corner from domestic-focused to globally present.
Learn more about how PSPs can successfully support merchants’ global aspirations by downloading the rest of the white paper.