While big tech companies have recently become major players in the payments space, their offerings may not always get the job done for all businesses because they can’t cater to all of the niche offerings that more verticalised businesses require.
Many businesses look for payment software partners because of the specific capabilities, software expertise, and flexibility they can provide for businesses in niche industries. Kate Hampton, chief strategy officer, NMI outlines why payments must be a part of the software stack that software vendor partners, or ISVs, offer these niche businesses.
Big tech payment offerings fail to meet every merchant’s needs. Here’s why
There’s no shortage of embedded payment solutions that provide consumers fast and convenient payment experiences. But the advantages of options like Stripe and Square extend beyond the consumer. They enable merchants to not only quickly and seamlessly accept payments, but also complete a variety of payments-related tasks. For example, sending receipts and service surveys.
These payment capabilities remain an attractive option for merchants like e-commerce businesses and retailers, especially those with digitally savvy audiences. The problem is that payment offerings from tech giants like Stripe and Square often fail to cater to businesses in highly regulated industries with unique payment needs.
Businesses with niche payment requirements need flexible solutions
Major tech players design payment solutions to appeal to the vast majority of consumers and merchants. It’s a smart move — these offerings provide an easy and secure way for shoppers to pay for their favourite products and services. Additionally, merchants who accept these payment types benefit by positioning themselves as adaptable and forward-thinking brands. The solutions also tend to be user-friendly and easy to implement.
But one-size-fits-all payment offerings fail to provide the flexibility and support for merchants in industries with more niche payment requirements. Merchants in certain industries and verticals — like education and dental care — often operate using transaction flows and customer journeys that are not relevant to the majority of the population. These businesses require specialised, payment-enabled products. Ones that allow them to serve customers in a manner that aligns with industry regulations and compliance standards.
Consider the hospitality industry. Hospitality businesses that cater to a global clientele accept multiple payment types in various currencies. They also need to accommodate both online and in-person transactions and the ability to process payments quickly and securely to provide a hassle-free customer experience. It’s challenging to identify a one-size-fits-all offering that satisfies all of the industry’s niche payment requirements.
So while big tech payment offerings remain an appealing option for many consumers and merchants, more verticalised and regulated businesses require payment capabilities tailored to their specific needs and compliance requirements. For these merchants, independent software vendors (ISVs) check the box.
ISVs deliver the flexibility and customisation needed in highly regulated industries
ISVs — software providers who develop a software stack for a specific industry vertical — offer comprehensive and customisable software solutions that often include embedded payment processing capabilities.
While big tech companies focus on delivering innovative solutions to a broad market, software providers can narrow their focus to specific industries or verticals in which they provide the greatest value. This allows them to provide capabilities tailored to your needs, and offer the support and flexibility you need to scale and evolve.
A food and beverage company and a dental office have distinct operational models, so they naturally have different payment needs and regulatory requirements. Unlike one-size-fits-all payment capabilities, ISV payment offerings can be customised to seamlessly integrate with your workflows and ensure regulatory compliance.
Key takeaway for merchants: Look for software providers that have a track record working with organisations in your industry to ensure they know the ins and outs of your regulatory and operational payment requirements.
The right partner doesn’t just help integrate payments into your operations — they also offer support when issues or questions arise. A software vendor’s expertise allows you to rely on them to manage your payment technologies while you focus on core business functions, turning them into a valuable operational asset.
Key takeaway for merchants: As you vet software providers, ask questions about their customer support capabilities to identify a partner that provides the right level of support.
Since ISVs offer more customisable offerings compared to generic solutions from big tech companies, it’s easier to evolve and scale your payment capabilities. For instance, you can scale ISV offerings as needed to accommodate changes in your transaction volume which helps you avoid paying for unnecessary payment processing capacity. A good partner can also help monitor payment technology trends to help you determine whether you need to revamp your capabilities.
Key takeaway for merchants: Prioritise transparent and timely communication with your software partner to discuss your long-term strategy.
Software vendors are the key to fulfilling your unique payment needs
The appeal of cutting-edge payment offerings from today’s tech giants is undeniable. But when it comes to meeting the unique needs of your business, you can’t beat the flexibility, support and customisation ISVs deliver to your payment operations.
With the ability to address the nuances of your sector, software vendors become integral to your success in navigating the complex landscape of payments. By evaluating your specific compliance and operational requirements, you can identify a partner that empowers your business to scale, evolve and provide seamless experiences to your customers.