By Alex Reddish, MD, Tribe Payments

Consumers demand a lot. Gone are the days that the likes of catalogue companies could promise delivery within 28 days, or refuse refunds if a consumer simply doesn’t want something. But there are not just more demands on merchants, today, these demands are greater and they’re constantly changing. Consumers want better personalisation, to be able to shop across multiple device types, to access cross-border shopping and convenience-driven services like click-and collect.

Our research has found that 84% of merchants believe that the biggest consumer demand they will have to adapt to is the expectation of a superior customer experience. Fast change has not satisfied consumers, instead it has only led to consumers demanding more change. Now that people know what is possible, they won’t settle for doing things in ways that don’t suit them.

An acquirer problem

This isn’t just a problem for merchants, it’s a problem for their vendors too. Our research found that just under a quarter of merchants are concerned about the ability of acquirers to innovate in ways that support their growth plans. In other words, one in four don’t believe that their current provider will be able to give them exactly what they need to keep their customers happy.

The bad news for acquirers doesn’t stop there. Almost half of merchants said that they would consider switching payment partners if they were offered better tools and technology, and three in five said they would do so if the new provider gave them more flexibility.

Acquiring is no longer commoditised. Flexibility and additional tools were perhaps once “nice to have” but that has changed. In the past, the choice a merchant made was almost entirely based on cost—they figured out the basics that they needed and looked for the lowest price. This cost-driven approach meant that merchants were only likely to switch for a better price.

But now many merchants are, like their consumers, demanding more. Cost, of course, will still be an issue in any purchasing decision, but it is increasingly unlikely to be the main part of any decision. In fact, it was interesting to note that when asked about the reasons why they chose their current acquirer, only 8% selected the option ‘low cost’ whereas 39% selected ‘Value for money’ – an important distinction.

Meeting the needs of merchants

Acquirers need to become less like a vendor and more of a partner, providing more than the basics to move up the value chain with their merchant customers. Transaction processing will still be at the core of any offering, but it is now only part of what merchants expect. But what are these needs? Luckily our research has some answers.

• More payment methods and new markets: Cards may still be the leading way to pay, but merchants are starting to understand the value of offering a broader range of options. Providing the right payment method will increase conversion rates, especially if a merchant is expanding to a market where there is a local payment scheme such as iDEAL in the Netherlands. But merchants don’t always know the right methods to offer, and acquirers can help.
• Optimising channels: Online merchants want to improve their checkout processes and avoid abandoned baskets. Those with a physical presence also want to improve the digital in-store experience. Merchants will look to acquirers to provide the right technology to support the best performance and customer experience in every channel.
• Greater personalisation: consumers want a tailored experience. Merchants want to offer one. But their access to consumer and trend data is often limited. Acquirers can help these efforts by providing this data in an accessible way, and by offering the tools that can turn data into insight.

Acquirers need to support and fulfil the needs of merchants, who in turn are doing their best to deliver against the expectations of consumers—which, as we know, are ever changing and expanding. It’s important to remember that this is an opportunity for acquirers. With these new demands comes an opportunity to evolve and differentiate—if merchants are no longer selecting a payment partner on cost alone, then acquirers can adapt their offering and set themselves apart based on solutions and service. This alone can make a huge difference in moving towards true partnerships with merchants that support long-term, mutually fruitful relationships and leave behind the high levels of merchant attrition that have long plagued acquirers.