Fintech Insights

Why you should aim for being independent.

Normally, we tend to overestimate changes in the short term and underestimate them in the longer one. Right now, the fintech- and payment business is undergoing a vast change. New payment methods, acquiring solutions, industry consolidation, and a strong desire for simplicity for both merchants and consumers are the main drivers behind this. Given these trends, I believe new opportunities are opening up on the market. There are potentially a lot of money, time, and quality to be claimed for any merchant that can see beyond the old playbook. In this insight, I will share some of these possibilities and also how they relate to Westpay and our position of being independent.

The ecosystem

If you are familiar with the ecosystem of payments, you know that there are several stakeholders that, together, make the actual transaction possible. POS Suppliers, Payment Service Providers, processors, acquirers, card schemes, and banks, just to mention the vital ones. At first glance, you might think that you want a supplier that covers as many of these services as possible. I am here to tell you that this is not the best way forward. The simple reason is that you give away every chance to expose the services to competition. I know it can be tempting to get as few invoices as possible. But the amount of money you can save just by making an inventory every year can make a huge difference when it comes to buying more for less.

In this context, the merchant is not pushed into a corner, but is free to always cherry pick desired supplier. I think we all can agree that change is the new static, and the only thing we know is that new innovations and services will continue to see the daylight at a speed that only goes faster. With an independent service provider, the merchant will be able to take advantage of all this.

Let me illustrate with a simple analogy. Every now and then, I need tools for different purposes. I have the option to either buy one tool with multiple functionalities. The list of what it can do just seems too good to be true. I might be tempted by the practical aspects and the upfront cost saving of having one tool instead of several. These tools usually have two things in common. They don’t work, and they make me frustrated. At the end of the day I always end up with my second option, i.e. buying quality tools that have one specific area of use. It gives me the best price performance in the long run.

Example – card acquiring

A fundamental aspect of Westpay’s position is that we are independent. That means that we have a fundamental focus on our core business: payments.

We don’t offer a forced acquiring service as a part of our solution. Instead, we let the customer choose
their preferred acquirer. They usually have a variety of reasons to go for their preferred one. It can be price, relations, services, a specific vertical, or geography, just to mention a few reasons.

Another possibility, and this is magic, that comes with being independent is that we can offer multi-acquiring solutions. Now, why would anyone consider having more than one acquirer?

Here are five reasons why:

  • Optimize every single transaction in regard to: country, market, basket size, etc, through Transaction Dispatching
  • Optimize transaction costs through the ability to benchmark and negotiate prices.
  • Smart retry allows for trying against a second acquirer if the first one declines.
  • Increases redundancy and allows for re-routing to an alternative acquirer if the primary acquirer is down. All done within the same transaction and not noticeable for the customer.
  • Route card transactions to different acquirers based on BIN, Card Brand and risk profile.

Without going any deeper, I hope that I’ve managed to share some understanding of why we at Westpay stick to our strategy of being independent. Remember, this was one example. Imagine the upside when you add all the benefits thanks to our market position.

It gives us the focus to be the best in what we do. It also puts us in a position where we can follow the trends and quickly adapt to all the new innovations we already see on the horizon.

Being adaptive to change, that is what I call future-proof…

Published november 11, 2022

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