Experience: Four Key Challenges for Payment Providers

However, as digital payments become more integrated into every part of day to day life, the scope for good and bad is widening. For providers, this puts extra pressure on payments to deliver more – not just enabling a transaction, but doing so while covering compliance, security, speed and convenience for all stakeholders.

With payment disaggregation opening up the playing field to new players beyond the traditional banking system, payment providers need to offer an experience that helps their merchants thrive while enabling the success of the wider ecosystem. Here, Payconiq International Head of Products Arnout Monteban explores four key challenges providers need to overcome to compete in the modern payment experience marketplace.

1. Reliability: The Cornerstone of Payments

The digital revolution has instilled an inherent expectation for reliability in every aspect of our lives, with payments being no exception.

The introduction of regulatory frameworks such as PSD2 has led to fintechs and non-financial businesses offering new, more connected services, while merchants operating internationally are more exposed to new competitors, including the ambitious Silicon Valley providers.

• Diversification makes switching payment providers easier, accentuating the need for consistent, reliable service.
• Many merchants may already be using multiple platforms to manage their business, meaning if one goes down, there may be another waiting to take your business.
• Payment providers operating with legacy infrastructure may be tied to a limited number of servers, potentially on site, with fewer options for building contingency backups or remedying problems remotely.

Reliability requires investing in a core architecture that can anticipate, mitigate and react to potential failures, whether that’s a cyber attack, physical failure or code error. Payconiq International’s cloud A2A system is built on a multi-server model, using a range of data centres with automatic backups in place to protect user data and maintain not just basic functionality, but also route payments via the fastest, most efficient pathways according to demand and network conditions.

2. Security vs Convenience: Striking the Ideal Balance

While reliability is a key expectation, security remains an imperative, attracting increasing attention from regulators as digital payments take on a larger role in modern commerce. PSD2 and the upcoming PSD3 have also ratcheted up the challenge of combating fraud and enforcing strong authentication and authorisation measures.

• Payments should exude safety and reliability, but without feeling overly restrictive or complex.
• Every security measure can potentially impact speed, and an overly complex process can feel onerous to the end user.
• The key challenge for solution design is to integrate knowledge of how users actually behave in their transactions and align security methods with existing opportunities.

One of the most successful methods has been leveraging mobile technology – instead of obliging buyers to carry an extra device to verify transactions, modern smartphones can verify their identity through fingerprint or face ID, combining with a verification app or text from payment providers to quickly approve transactions on the go.

3. Cross-Platform Integration: Unifying the Customer Journey

The rapid expansion of technology systems for managing a business online means that payment data and flows now need to integrate seamlessly with various non-financial platforms, including CRMs, inventory management systems, and front-end sales platforms. Merchants rely on these systems daily, meaning that choosing a provider is not longer just about the service provided, but also requires robust interoperability between other tools.

• For providers on legacy systems, building spot integrations for other platforms can be slow, expensive and risky, creating additional development work for every partner.
• Merchants expect a secure, instant data exchange between platforms in order to run their business efficiently and minimise manual payment management.

Embracing an open future requires a different mindset for providers, moving from ‘walled-garden’ retention – keeping customers in an app through keeping their data siloed – to an integration-first model. By making data transfer between systems simple and accessible, providers can retain customers through value-driving processes and convenience.

This is the reason why Payconiq International deploys an open, API-enabled architecture ready to integrate with other key commercial tools, helping providers adapt to their merchants’ technology stacks and offer a fully flexible service.

4. Value-Add Experiences: Catering to Evolving Expectations

One major consequence of the growth of integrated payment systems is a wider scope for what value actually means for payments. As competition in payments increases, simply facilitating payments may not be enough to retain customers – payment providers will need to look ahead to the future and anticipate the ways that payments can improve the lives of merchants and their customers.

• As ecommerce becomes an increasingly important influence on merchants, customers and businesses are embracing A2A payments as a lower-cost, more secure method.
• Merchants working across borders need the ability to manage multi-currency transactions with competitive FX fees and rates.
• Merchants can use payments to drive customer value through loyalty schemes, targeted offers and detailed behavioural insight.

Leveraging these requires the ability to effectively track, share and analyse payment data between systems to offer users a connected, value-driven journey.

Prioritising CX in a changing market

In a market where experience is a key differentiator, legacy systems are a major risk for payment providers. Outdated tools are inflexible, difficult to integrate and harder to adapt to the fast-changing commercial, regulatory and technological environment that is fast reshaping the payment industry.

As younger generations make up a larger portion of the addressable market for payment services, both as merchants and consumers, payment providers will also need to adapt to shifting expectations.

In realms such as social media, we’ve seen trends towards users willingly deprioritising security and privacy for improved user experiences. For providers looking to win new customers, this makes user experience not only a technical but sometimes also a moral challenge, with the need to set high internal standards for integrity alongside convenience.

Payconiq International is an established transformation partner for banks, payment providers and payment schemes. Our accessible, compliant and secure data platform is built for change, helping providers create value-driving experiences efficiently and scalably, while delivering reliability and control at every stage of the payment process.