+100 European acquirer software partners interviews: what are they seeking ?
After over 100 partner interviews throughout Europe, we have distilled for you, major learnings to build a strong partnership.
In this short article we will highlight:
- Why value-added services are more important than kick backs
- How software providers can stand out from their competitors
- What you should consider, to become a strong partner of your software providers
- Value-added is more important than money
Software providers are seeking for value added services more than higher commissions or margins on hardware sales from their payment partners. Since technology has increased information exchange and reduced transaction costs, production of financial services is being disaggregated.
Payment providers need to explore new revenue growth opportunities “beyond payments”. Additionally, with margins being squeezed through commoditization and competition, acquirer software partners are looking for ways to provide customers with greater value rather than to lower their prices.
Acquirer’s technology stability, partner support & onboarding capabilities are more important for software providers than commissions in selecting payment partner.
Here are some of the top criteria used by software providers to evaluate their future partner:
- Stability of technology
- Ease of customer onboarding
- High customer support level, technical partner support
- Ease & Speed of setup
- Terminal delivery time
Terminal pricing and commissions are bottom-line of the providers’ worries.
- European software market is becoming crowded
The European POS terminal market had grown at 7% CAGR between 2017 & 2021. The European ECR software provider market with over 6’000 well-sized providers is becoming highly competitive. The competition factors are mainly:
- the emergence of cost-effective mobile solutions, which have enabled more businesses to access ECR software
- the prevalence of cloud based ECR software solutions to lower the software access costs
- the development of AI-based solutions has enabled ECR software solutions to become more robust and efficient
- the rise of open source ECR software solutions has enabled businesses to access high quality solutions at a lower cost
Merchants are now looking for their partners to provide integrated software solutions that can offer new revenue streams. Furthermore, integrated software vendors are becoming increasingly important to acquirers as they can provide both software and payments solutions.
- What you should consider to become a strong partner of your software providers
As an acquirer or payment partner, there are several key considerations to become a strong partner of your software providers. Before going into the details of what to do, please review the “no gos” that your software partner will not like:
- one way partnership
- allowing your direct sales to contact your partners customers & offering better prices than your Partner
- Not keeping promises or agreements
- Long waiting time for business as usual activities, i.e. basic support request, joint offer for large merchants, etc.
Avoiding these situations will place you in a good position. You will be able to propose the value-added services that every software provider is looking for when partnering with a payment provider:
- ensure that you have an efficient and effective onboarding process so that the software providers receive all the necessary information, access, and support they need when they begin working with you
- provide a seamless merchant onboarding, fully electronically (add link to Corporate Customer Onboarding) with possibility to integrate into his online customer journey without capturing any data twice
- strive to provide the highest levels of customer service and support to your software partners. This could include providing timely feedback, responding to queries and requests in a timely manner, and engaging in regular communication
- fight for a transparent pricing structure and if possible, but only as the second priority, be able to provide competitive rates to your software partners
This will help create a strong and trusting relationship with your software partners.
Acquirers need to develop a clear sales (channel) strategy with a strong partner management to make the difference in the next years. This strategy should include defining the ideal partner profile and identifying the best ways to engage with them.
It is important for payment provider to ensure that they have a system in place that allows them to effectively onboard & manage their relationships with partners and track their performance.
Finally, acquirers should ensure that they have a clear communication strategy with their partners, as this will help to ensure that they are always up to date on the latest developments and ensure their partners’ satisfaction.