The payment processing industry has grown immensely in recent years. McKinsey reports that in 2017, the industry grew by 11 percent to reach $1.9 trillion worldwide. If you are a merchant acquirer, though, this is not all good news. As the industry grows, new competitors emerge daily, often with new innovations and platforms that threaten your business. If you want to continue to grow, you need to respond to the challenges and seize market opportunities to differentiate yourself from the rest of the crowd.
Challenge: The Competitive Landscape
Every time a new merchant acquirer forms, it does so with the intent to take business away from you. You face not only more competition, but new technology and price pressure as well. Software developers register as payment facilitators , further cutting into your piece of this market pie. Margins decrease, meaning you need more accounts just to maintain your profit levels.
Part of the solution is harder work; you should be working every day to get new accounts, and competition can spur you on. Beyond this, though, you need to work smarter. Distinguish what you do from everyone else, and examine emerging technologies to see what can help you. Just because what you have and do has worked so far doesn't mean you can't improve. Learn, grow, and innovate in ways that help you stay ahead.
Challenge: Payment Fraud
Payment processing technology is not the only area of innovation in this space. Identity thieves and hackers grow their capabilities and their levels of sophistication all the time. You see the highlights in the news, in the form of data breaches and huge theft. Such events signal possible dangers for your business in the form of a stolen card: dealing with chargebacks, losing revenue and goodwill, and if your security measures are not up to par, it means losing your customers as well.
Here, too, you need to be innovative to keep up and stay ahead. Often newer competitors still need to develop robust defensive processes. Focus on ways to thwart data breaches and deter fraud, as well as the ways you respond when they occur.
Use Service and Security to Generate Growth
Every challenge that you face confronts others in your market space as well. If you are an established merchant acquirer, you should use your experience and position to your advantage. Work with the customers you have to identify and address pain points. Watch the market for new approaches and technologies that you can use to adapt. All the while, focus on maintaining and expanding the security measures you have in place.
Any business will require its owners and managers to adapt and grow over time. The challenges facing merchant acquirers are daunting, but they also spur the best businesses to grow and improve. Your response to competition and market dynamics will either set you apart or send you adrift. Innovate and grow to turn each challenge into an opportunity for your business.