Payment Gateway Perspective

Top payment gateway preferences by merchant segments that will help inform your go-to-market strategy

In my experience working directly with merchants on a variety of topics (e.g., conversion optimization, payments processing strategy, RFPs) I found merchant preferences do indeed vary by size— almost as much as industry verticals. And over the past decade, as I’ve worked with many service providers (from Acquirers and ISOs to Payment Gateways) to articulate value proposition across merchant segments and niche verticals, I feel there is a missed opportunity for the broader industry to deliver a marketing strategy focused on the evolving needs of merchants by segment.

There are certainly key needs all merchants have in common regardless of size (e.g., reliability, high conversion, perceived security) but there are many important, yet varying preferences depending on a merchant’s size. A deeper understanding of specific needs by segment will not only serve as critical insights to develop a targeted go-to-market strategy but also increase customer retention and lifetime value for payments service providers. To help illustrate a visual perspective (at a glance), I created the below original graphic of the top payment gateway preferences across merchant segments, knowing full well this is not a constant point of view. Particularly in light of recent events, we are seeing rapid change in merchant preferences across segment and even more astonishingly, at the SMB segment that was previously reluctant to implement digital capabilities and multi-channel sales— a silver lining of COVID-19 impact.

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Payment Gateway Preferences Infographic

The Mid-Market National (MMN) Segment really stands out as most often overlooked for a more targeted sales and marketing approach—presenting significant opportunities for payment gateway providers.

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Key Insights by Segment:

  • Smaller merchants generally prefer simple set-up and basic capabilities from payment gateway providers. However, as COVID-19 lingers, we will continue to see acceleration in digital/contactless payments at the SMB segment, more than we would have expected (e.g., small businesses are shifting from paper menus to digital menus, from buying in-store to buying online and pick-up in-store/curbside). So as smaller merchants move up the spectrum from basic processing needs to more sophisticated features and services, a targeted consultative sales technique vs transaction-based selling will lead to better results.
  • The MMN segment typically evolves in size and so their needs change during this transition. However, payment service providers miss significant opportunities to offer targeted solutions that will help merchants in this segment. Some notable unmet needs include specialized education and consultative support (e.g., global sales enablement/cross border acceptance, insightful reporting and analytics, omni-channel integration, dedicated support)—which will help the MMN segment better prepare for growth.
  • Enterprise merchants typically prefer a high level of flexibility and powerful capabilities to support its complex businesses (e.g., variety of payment/alternative options, customization, global connectivity, dedicated experts, customer convenience). Providers should align existing capabilities with the complex needs of Enterprise merchants to be successful in their go-to-market approach. And consider even table stake offerings (e.g., level II/III reporting) can be a deal breaker for many large merchants, if not available.
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There is no doubt the Global payment gateway market share will blow through all previous projections, helped by the COVID-19 pandemic.

Capture the tailwinds by shoring-up your understanding of merchant needs to win new business, drive customer experience, and further extend the customer lifetime value.

Answer the following three key questions to gauge your readiness to capitalize on the opportunity to better serve your merchants and compete effectively:

  • Do your solutions meet the current and future needs of your target customer segments?
  • Have you articulated your competitive advantage, and if so, how well are you communicating this to your existing and new customers?
  • As your customers transition from Small to Mid-Market, are you providing education and consulting to enable and optimize their growth?

Learn more…

We help leading payments service providers assess the constantly evolving payments landscape, capture competitive trends and voice-of-the-customer insights, and develop go-to-market strategies aligned to their target customers. Check out our featured case studies, service pages, and client testimonials to learn more about our expertise in developing and executing successful go-to-market strategies.

Have questions?

Contact me to discuss how ePAY consulting services can help you clearly articulate and execute your sales and go-to-market strategy to benefit from the rapid acceleration of digital payments.

About ePAY

ePAY consulting services is a specialized payments consultancy trusted by mission-driven organizations across the payments ecosystem to develop winning strategies and optimize business performance.