Payment, long seen as a necessary evil

Payment on a merchant site has long been considered a technical brick to manage, perceived as a constraint because it is outsourced and difficult to control. Its management was entrusted to a duo: IT department for the technical part and purchasing manager to negotiate the contract.

But that paradigm has changed. Merchants have understood this: setting up a payment strategy for their e-commerce is now essential. Payment is no longer just an operational obligation, it has become a differentiating factor in customer experience and site performance.

We are observing this transformation: merchants no longer want to suffer but to manage their payments. They are becoming more professional, developing skills on the subject and seeking to achieve true independence from their PSP, rather than blindly entrusting management to a single provider.
This quest for independence marks the beginning of a new approach: retailers are deeply rethinking their relationship with PSPs.

The trigger: why merchants are rethinking their approach to payment

The evolution of the market context

Let's take a step back and compare consumer habits between the 2010s and today. It is radically different.
Before, customers had no choice. They expected to be redirected to an austere payment page and to pull out their bank card to finalize their purchase.

Today, consumers want a payment process that is transparent, fluid, fast and perfectly adapted to their purchasing context. The famous frictionless.

Merchants must constantly adapt and evolve their payment solution to meet expectations:

• Local payment methods for international customers (Bizum, iDEAL, Bancontact, Redsys...).
• BNPL solutions for high baskets (Oney, Alma, Cofidis...).
• Wallets to facilitate mobile payments. According to Fevad, in 2023, 63% of e-commerce payments were made on mobile. Solutions like Apple Pay and Google Pay have seen rapid adoption.
• Open banking solutions to secure and streamline certain payments through strong authentication directly via the customer's bank.

Faced with this diversity and the speed of change, merchants who rely on a single PSP find themselves constrained in their choice.

What are the limitations of the mono-PSP model

Each PSP has its strengths and specificities, but no single player can guarantee optimal coverage for all markets, all payment methods and all situations by itself. While a single provider may seem easier to manage at the beginning, this approach quickly shows its weaknesses.

The main limitations for merchants are:

• Variable acceptance rates: depending on the country, local banks or card types, some PSPs perform better than others. A transaction may be refused by a PSP, but accepted by another that will have a finer relevance in a given market. Relying on a single supplier limits performance with a direct impact on the acceptance rate.
• The difficulty of innovating quickly: e-retailers are totally dependent on the product roadmap of their service provider. They must wait for developments, the integration of new payment methods and technical corrections, without being able to act directly.
• Technical dependence: in the event of a failure or temporary poor performance, there is no plan B and the impact is direct on site performance and turnover.

By entrusting its flows to a single PSP, the merchant remains dependent on his service provider. Whatever the quality of the service, this dependence always represents a risk.
Adopting an orchestrated multi-PSP approach is essential to regain control: payment is no longer a convenience, but a strategic territory.

From the experienced mindset to the proactive mindset: the merchant takes back control

Structuring the payments function to regain control

As we have seen, the market context has changed rapidly in recent years. Consumers are more and more demanding and their expectations are precise when it comes to payment. This crucial stage in the purchasing funnel has reached a level of maturity that pushes players to professionalize and excel.

This evolution has given rise to a profession that did not exist or very little existed a few years ago: the payments manager. Formerly reserved for very large specialized retailers, this role is now an integral part of decision-making teams at retailers and retailers facing payment challenges, whether online, in-store or in an omnichannel context.

Proof that the payment has moved from a cost center to a profit center.

The payments manager has a transversal role, at the crossroads of several teams:

• With the DSI, to guarantee technical solidity and the integration of solutions.
  
  
• With finance, to monitor flows, optimize transaction costs and maximize acceptance rates.
  
  
• With e-commerce, to improve the customer experience during the buying process and increase the conversion rate.

Its mission: to manage the payment architecture with a logic of continuous improvement, optimization and profitability, capable of transforming a fixed cost into a growth driver.

This professionalization of the function, and the fact of benefiting from an internal conductor, allow merchants to regain control of their payments and less delegate all the responsibility for the payment component to a single PSP.

Structuring the function is only the first step. To achieve this independence and reap all the benefits, merchants must go further: adopt a multi-PSP approach and set up real payment orchestration.

What are the benefits of a multi-PSP strategy

In this logic of taking control of payment flows, merchants can analyze the context more finely and choose, for each payment path, the most suitable provider.

This orchestration of payments offers numerous benefits:

• Financial optimization
  
  • Strengthen bargaining power with its payment providers
  • Choose the most economical route for each transaction in real time
  • Reduce processing costs and improve margins
• Customer satisfaction
  
  • Respond to customer expectations as soon as possible (innovation, payment methods, currency management, etc.)
  • Offer a payment process that is perfectly adapted to the purchasing context
• Operational performance
  
  • Optimize the acceptance rate by selecting the most efficient PSP according to the country, local bank or card type
  • Increase revenue by reducing failed payments
• Strengthened resilience
  
  • Set up backup and intelligent flow routing mechanisms in the event of a failure or temporary problem with a PSP
  • Reducing the risks of relying on a single supplier

In summary: multi-PSP, combined with payment orchestration, gives merchants the ability to actively manage their transactions, gain independence from service providers and transform their payment strategy into a competitive advantage.

Toward a new era of payments

In the same way as other challenges for e-retailers such as customer acquisition or loyalty, payment is a real strategic territory.

While this trend of “payment ownership” is taking hold, solutions like Purse, which specialize in the orchestration of payments, already allow merchants to implement an efficient and sustainable multi-PSP strategy.

Are you ready to take control? Find out how in our article dedicated to PSP multi strategy