Over the past ten years, merchant acquirers have seen the ground shift beneath their feet. New competitors have emerged, swallowing huge chunks of the industry despite charging astonishingly high prices, as much as 3.49% + 49¢ per transaction in some cases.
You have likely offered your customers rates that are significantly lower — likely up to a full percent less — and yet your merchants are choosing to shift part (or all) of their business to those services. Obviously, their success owes nothing to price.
Why merchant acquirers need to compete on value vs. price
There are three primary reasons why customers leave merchant acquirers. 1) They’re dissatisfied with the service 2) upset at the cost 3) or find a more complete solution somewhere else. A more complete solution is what your competition is offering. Their services extend beyond payment processing with additional features to save time and effort.
The most commonly cited reasons for using those services are:
- Email invoicing
- Payment portals
- Subscription management
- Invoice reconciliation
Merchants want higher transaction volumes. They also want more services, better security, and faster ways to resolve their problems. Fintech delivers this, which is why merchants are willing to pay more.
It is not possible to win on price alone anymore. Customers have already expressed their comfort with paying higher rates if they receive more value from those services. In order to truly be competitive in this marketplace, merchant acquirers will need solutions to offer those customers.
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