Even though Buy Now Pay Later (BNPL) tends to get attention in the marketplace, some media sources are diverting focus to the benefits of Digital Revolving Credit as an alternative e-commerce financing method. In February’s DevPro Journal, FuturePay’s CEO Tim Harris provided some expertise on this for an article on how to help ISVs and merchants future-proof their e-commerce offerings. Take a look below!
The payments industry has evolved dramatically in the past few years. As consumers looked for contactless ways to complete transactions during the COVID-19 pandemic, they developed long-term behaviors. More than half of U.S. consumers now expect to use their contactless cards and mobile wallets wherever they shop. They also want the freedom to use ACH and peer-to-peer payments (e.g., Venmo and PayPal) to pay for goods and services as well as paying their bills or reimbursing friends for their part of the dinner check.
Merchants, too, want to offer payment choice to capture more revenues and enhance customer experiences. The payments industry has responded with innovations like soft POS, which allows merchants to accept payments anywhere using consumer mobile devices rather than investing in PIN pads and payment terminals.
So, with change occurring rapidly in the payments industry, how can ISVs ensure the point of sale (POS) solutions they provide deliver the functionality their clients need?
Peter Galvin, chief growth officer at NMI, says your relevance boils down to three things:
1. Payments embedded in software
“Having payments embedded in an ISV’s software stack will ensure that their end consumer will have a positive buying experience from selection right through to checkout,” Galvin says. “Integrating payments throughout is vital for ISVs to ensure a seamless brand, UX, and payment process when users are interfacing with their software platform.”
He adds that embedded payments make reporting and analysis across the software application easier and simpler since it is combined with other important consumer data that is collected by the software systems. “By embedding payments, software apps can also incorporate payment technologies that store the credit card information or allow the use of digital wallets as part of the payment and checkout process, allowing the consumer to use their preferred payment type,” Galvin explains. “It also prevents consumers being taken to a different site for payment or to input the same or similar information on the software app,”
“Shoppers are looking for alternative payment methods beyond credit cards, especially those younger customers who are accustomed to digital self-service tools. ISVs need to be mindful that many Buy Now Pay Later financing platforms are considered too structured for many consumers, who are seeking options that are flexible, and can align with their budgetary needs.”
— Tim Harris, CEO FuturePay Holdings, Inc
2. Monetizing payments
Galvin comments, “The software industry must realize that offering payment capabilities to merchants is another way to monetize their own business. Working with the right set of partners will allow software vendors to offer several payment capabilities such as accepting multiple payment options, underwriting capabilities and risk monitoring. By monetizing the payment process, software firms will have another revenue stream that can be used to increase revenue, reinvest in their existing business and/or give them the opportunity to experiment with different pricing models for their software.”
3. Tokenizing payments
Galvin also points out that ISVs must provide solutions for the subscription economy. “Leveraging tokenization will allow merchants to keep consumer information on file for easier and faster checkout.” With this technology, consumers can provide all of their payment information when they make their first purchase or sign up for a subscription. Then, the merchant can use tokenized payment data on file for future charges, creating frictionless payment experiences for the consumer.
Take a Flexible Approach to Alternative Payments
ISVs also need to watch consumer adoption of alternative payments, like buy now, pay later (BNPL). The BNPL market is poised for growth. According to Fortune Business Insights, the global market will increase from $23.22 billion in 2022 to $122.19 billion by 2030, an astronomical 22 percent CAGR.
However, savvy ISVs will recognize that allowing merchants to remain agile when meeting this demand is pivotal. Tim Harris, CEO, FuturePay Holdings Inc., says, “Shoppers are looking for alternative payment methods beyond credit cards, especially those younger customers who are accustomed to digital self-service tools. ISVs need to be mindful that many BNPL financing platforms are considered too structured for many consumers, who are seeking options that are flexible, and can align with their budgetary needs.”
He says to consider all options that give consumers a “buy now, pay later” experience, including digital revolving credit solutions. “They deliver instant approvals for an ongoing, reusable line of credit account, compared to BNPL’s fixed installment plans. This allows consumers to pay over an extended timeframe, on a flexible schedule, and re-use the line of credit whenever they choose.”
Partnership Is Key
For most ISVs, payment partnerships are key to providing the payment technology, solutions, and services they need to give merchants the ability to accept a range of payment methods seamlessly and securely.
Learn more about what your payment partners have to offer, including how they make integrating their solutions easier for ISVs. Above all, ensure you have positioned your business to meet merchants’ needs in this rapidly changing industry.
Even though Buy Now Pay Later (BNPL) tends to get attention in the marketplace, some media sources are diverting focus to the benefits of Digital Revolving Credit as an alternative e-commerce financing method. In February’s DevPro Journal, FuturePay’s CEO Tim Harris provided some expertise on this for an article on how to help ISVs and merchants future-proof their e-commerce offerings. Take a look below!
The payments industry has evolved dramatically in the past few years. As consumers looked for contactless ways to complete transactions during the COVID-19 pandemic, they developed long-term behaviors. More than half of U.S. consumers now expect to use their contactless cards and mobile wallets wherever they shop. They also want the freedom to use ACH and peer-to-peer payments (e.g., Venmo and PayPal) to pay for goods and services as well as paying their bills or reimbursing friends for their part of the dinner check.
Merchants, too, want to offer payment choice to capture more revenues and enhance customer experiences. The payments industry has responded with innovations like soft POS, which allows merchants to accept payments anywhere using consumer mobile devices rather than investing in PIN pads and payment terminals.
So, with change occurring rapidly in the payments industry, how can ISVs ensure the point of sale (POS) solutions they provide deliver the functionality their clients need?
Peter Galvin, chief growth officer at NMI, says your relevance boils down to three things:
1. Payments embedded in software
“Having payments embedded in an ISV’s software stack will ensure that their end consumer will have a positive buying experience from selection right through to checkout,” Galvin says. “Integrating payments throughout is vital for ISVs to ensure a seamless brand, UX, and payment process when users are interfacing with their software platform.”
He adds that embedded payments make reporting and analysis across the software application easier and simpler since it is combined with other important consumer data that is collected by the software systems. “By embedding payments, software apps can also incorporate payment technologies that store the credit card information or allow the use of digital wallets as part of the payment and checkout process, allowing the consumer to use their preferred payment type,” Galvin explains. “It also prevents consumers being taken to a different site for payment or to input the same or similar information on the software app,”
“Shoppers are looking for alternative payment methods beyond credit cards, especially those younger customers who are accustomed to digital self-service tools. ISVs need to be mindful that many Buy Now Pay Later financing platforms are considered too structured for many consumers, who are seeking options that are flexible, and can align with their budgetary needs.”
— Tim Harris, CEO FuturePay Holdings, Inc
2. Monetizing payments
Galvin comments, “The software industry must realize that offering payment capabilities to merchants is another way to monetize their own business. Working with the right set of partners will allow software vendors to offer several payment capabilities such as accepting multiple payment options, underwriting capabilities and risk monitoring. By monetizing the payment process, software firms will have another revenue stream that can be used to increase revenue, reinvest in their existing business and/or give them the opportunity to experiment with different pricing models for their software.”
3. Tokenizing payments
Galvin also points out that ISVs must provide solutions for the subscription economy. “Leveraging tokenization will allow merchants to keep consumer information on file for easier and faster checkout.” With this technology, consumers can provide all of their payment information when they make their first purchase or sign up for a subscription. Then, the merchant can use tokenized payment data on file for future charges, creating frictionless payment experiences for the consumer.
Take a Flexible Approach to Alternative Payments
ISVs also need to watch consumer adoption of alternative payments, like buy now, pay later (BNPL). The BNPL market is poised for growth. According to Fortune Business Insights, the global market will increase from $23.22 billion in 2022 to $122.19 billion by 2030, an astronomical 22 percent CAGR.
However, savvy ISVs will recognize that allowing merchants to remain agile when meeting this demand is pivotal. Tim Harris, CEO, FuturePay Holdings Inc., says, “Shoppers are looking for alternative payment methods beyond credit cards, especially those younger customers who are accustomed to digital self-service tools. ISVs need to be mindful that many BNPL financing platforms are considered too structured for many consumers, who are seeking options that are flexible, and can align with their budgetary needs.”
He says to consider all options that give consumers a “buy now, pay later” experience, including digital revolving credit solutions. “They deliver instant approvals for an ongoing, reusable line of credit account, compared to BNPL’s fixed installment plans. This allows consumers to pay over an extended timeframe, on a flexible schedule, and re-use the line of credit whenever they choose.”
Partnership Is Key
For most ISVs, payment partnerships are key to providing the payment technology, solutions, and services they need to give merchants the ability to accept a range of payment methods seamlessly and securely.
Learn more about what your payment partners have to offer, including how they make integrating their solutions easier for ISVs. Above all, ensure you have positioned your business to meet merchants’ needs in this rapidly changing industry.
Digital Revolving Credit: A Potentially More Responsible Financing Option than BNPLRead the article
