How ISVs can optimize the payments experience
Independent software vendors (ISVs) act as trusted business advisors to merchants of all sizes, helping customers integrate the latest technologies into their ERPs, CRMs, and EHRs. ISVs that offer commerce enablement as part of their software solutions create a future-proof partnership with merchants who are looking for streamlined tools that serve their customers best.
When it comes to payment services, working with a trusted partner enables ISVs to offer the latest and greatest payments technology without building an offering from the ground up. Given the pace at which the payments landscape is changing, ISVs must consider optimizing the payments experience for merchants and future-proofing their software.
An eye toward optimized payments
Digital payments have taken off, experiencing a 40% jump within two years — growth that is expected to amount to $6.6 trillion in 2021. Businesses and consumers alike have flocked to online channels for everything, including payments. This increased volume in digital transactions means software companies must be invested in optimizing the payments experience.
Ensuring a frictionless payment experience should be a top priority. Embedded commerce solutions should provide multiple payment options to extend the flexibility customers want while also enabling merchants to get paid quickly. ISVs can also keep a finger on the pulse of emerging trends and roll out timely updates to keep pace with advancements in technology and shifting consumer expectations. Security should also be a key consideration when rolling out updates, giving merchants and their customers peace of mind that sensitive payment data is safe.
Each of those payment optimization options can go a long way in keeping merchants and their customers happy, though ISVs have an opportunity to go the extra mile when they work with a trusted payments processor. For one thing, it presents the opportunity to take advantage of revenue-sharing programs. This type of collaboration also allows ISVs to tap into the expertise of their payments partner to offer the features that merchants and their customers will benefit from the most.
Customers expect a range of payment methods that meet their changing preferences. Merchants that rise to the opportunity can bolster sales and boost brand loyalty. ISVs that can provide multiple payment options, including traditional and digital options, are well-positioned to help merchants succeed and improve their own customer relationships.
ISVs should consider offering a wide range of payment acceptance methods as part of an embedded commerce solution, including cash, checks, credit and debit cards, digital wallets, and contactless cards. Recurring payments and card-on-file are also highly relevant payment methods.
Additional revenue sources
Alternative payment options such as gift cards and special offers give software companies a competitive edge. Consumers are comfortable with these payment options, and merchants love them for their marketing appeal and cash flow benefits. Physical and digital payment options are flexible, improving customer loyalty and broadening their appeal to a wide range of customers. ISVs that integrate gift cards and alternative payment functionality into their software are opening up additional revenue opportunities to their merchants.
The influx of digital payments has been a boon in many ways, but it also presents more opportunities for bad actors and fraud. Fraud is an expensive problem for merchants, and credit card chargebacks can cost both time and money that merchants would rather spend growing their business.
ISVs that work with experienced payment partners can leverage their state-of-the-art security tools to ensure ongoing PCI compliance and security, keeping merchants safe from costly data breaches and other negative consequences. Magnetic stripe payments lack the security features of their more advanced counterparts, so ISVs should focus on EMV chip card functionality, which encrypts data for every transaction. This replaces sensitive data, keeping cardholders safe from fraud. Encryption and tokenization can also improve security and ensure that compliance regulations are met seamlessly.
Installment payment options (think: buy now, pay later) and other alternative financing mechanisms are quickly becoming a preferred way to pay, especially for younger generations. One study found that 17% of Gen Z and 21% of millennials report using installment options more. Short-term loans available at the point-of-sale (POS) can improve conversions and enable customers to purchase now and pay later, in installments that work within their budget.
Next-gen ISVs who consider themselves payments-forward should consider the features and functionality above. Digital payments are here to stay and merchants are looking for the best ways to cater to customer preferences efficiently and cost-effectively. Embedded payments solutions that take these factors into account are well-suited to maintain a competitive advantage in both the near- and long term.
To learn how your company can become an ISV partner of Global Payments Integrated and optimize the payments experience for your customers, contact us today.