fbpx

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.

Gift cards

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.

Account updater

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. 

Cash discounts

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. 

Guide: How can a BNPL solution grow?

Cryptocurrency payments

Adding multiple currencies is a leading vector for a payment company’s growth. The more customers from different countries and with different needs get access to the merchant’s goods and services, the more revenue it will generate. According to Global Insights, crypto-assets will become mainstream in 2021. The evolution of digital ledger technologies combined with stablecoins and increasing interest in central bank digital currencies may begin to open up tremendous opportunities in the cross-border payments space.

Cryptocurrency is no longer a pig in a poke; adding crypto as a payment method enables businesses to reach customer segments it could never have reached before. The OLB Group with its SecurePay Payment Gateway announced that they plan to enable merchants to offer cryptocurrency payments. Merchants utilizing the OLB SecurePay gateway service or the OmniSoft cloud-based business management platform will immediately have the option to accept these alternative contactless payment methods without any equipment changes.

Bottom line

According to Global Insights, investments in the payments space will be hot around the world, particularly in less mature markets, in 2021. We will likely see large payments players consolidating to drive global scale, which will drive new mega M&A deals. Along with that, market players will continue to implement new features and fill in the gaps to improve the purchasing experience for both merchants and customers.

About INSART

INSART is a Fintech engineering partner with outstanding knowledge and experience in developing Fintech solutions, assembling dedicated teams for Fintech projects, and managing them in a long-term perspective. We teach our developers financial concepts and foster a culture of financial literacy and well-being across the company. Our expertise saves you at least 25% time comparing to teams inexperienced in the business domain area.

INSART is a leading partner of WealthTech Club.

Contact Vasyl Soloshchuk to learn details. Visit site.

Tools to Help You Build Integrations in Fintech

Tools to Help You Build Integrations in Fintech

In the last half a year, we saw the dawn of digitization in Fintech. Companies have been forced to adapt to the new reality and make partnerships to get access…

What Have You Missed When Developing Fintech Products Remotely?

What Have You Missed When Developing Fintech Products Remotely?

The world in the new reality will never be the same as before the pandemic. The Fintech market was also affected by the crisis, with many companies that managed to…

Embedded Finance Overview: Prospective Areas For Opportunities

Embedded Finance Overview: Prospective Areas For Opportunities

The embedded finance trend promotes a win–win approach that allows companies to grow a client base and keep them loyal in a competitive market. According to this paradigm, Fintechs are…

Lending as a Service: Opportunities to Grow in 2021

Lending as a Service: Opportunities to Grow in 2021

By replacing legacy applications with a natively digital LaaS platform and realigning business processes, loan approval can be completed in minutes, with funds disbursed within hours. The following are some…

Research: Major Growth Points for BNPL Solutions

Research: Major Growth Points for BNPL Solutions

Along with credit cards, BNPL options help customers and merchants mitigate financial risks and keep money flows alive. We analyzed successful BNPL companies to determine what potential growth vectors exist…

The PPP is Back, What do Fintech Leaders Think?

The PPP is Back, What do Fintech Leaders Think?

Congress finally passed a new round of stimulus funding. The $900 billion Covid-19 relief package included $285 billion for a renewed Paycheck Protection Program.

Buy Now Pay Later Integrations With Payment Processors

Buy Now Pay Later Integrations With Payment Processors

What integrations with payment processors do the most popular BNPL solutions have and how this influences their value? Take a look at the most popular payment processors to identify gaps…

Adam Bialy, OpenPayd: How open is open banking?

Adam Bialy, OpenPayd: How open is open banking?

Adam Bialy: As the initiative turned two this year, and banks opened their systems, industry attention is now turning to how open banking and the services they enable will form…