Commentary by John Jakobe
For the majority of merchant acquirers, eCommerce sales channels have been traditionally viewed as singular and fairly straightforward, just as payment processing was for brick and mortar retailers approximately ten years ago. The evolution of software at the point of sale (POS) changed this perception for brick and mortar retailers, as additional functionality was built into the POS. Now retailers can manage inventory, marketing, loyalty, loans, employees, and more from their POS.
eCommerce is developing in a similar pattern as innovative eCommerce platforms are now bringing more holistic functionality that merchants require. Many acquirers today offer merchant accounts and gateway products, but this is only a small part of the equation for eCommerce merchants. For example, many acquirers do not offer a website builder or shopping cart software, which are the most basic elements required for an eCommerce merchant to operate. Successful eCommerce platforms provide merchants with holistic support, meaning website development and design, shopping cart software, integrated gateway support, reporting functionality, multichannel/omni-channel management, marketing and social media support, shipping, site traffic reporting, and verticalized niche features. These items are just the tip of the iceberg when it comes to eCommerce functionality, leaving most acquirers to turn to partnerships in order to fulfil these needs. Though as eCommerce continues to grow, forward thinking acquirers will prioritize building ancillary functionality into centralized eCommerce platforms. These cohesive platforms will provide much needed support to eCommerce merchants, who today often are forced to integrate disparate systems and work with multiple platforms in order to provide a basic online shopping experience.
Some of the more forward-thinking providers for eCommerce merchants have brought together an impressive array of features and products. Some providers now offer shipping management, social media partnerships, and marketplace or multi-channel management tools. The expansion of these eCommerce tools to multi-channel distribution and social media led marketing plays directly into to massive trends currently unfolding online. Today, more than ever consumers are purchasing items online, influenced by social media, the average consumer is no longer required to leave their house to purchase even the most basic of items. Near instant delivery and competitive pricing, have broken down the barriers to purchasing, resulting in skyrocketing eCommerce figures. These trends are expected to only continue as younger generations enter the market. These generations communicate, interact, and utilize social media and other online marketplaces that often correlate with their preferences. As personalized advertisements and algorithms categorize and cater to their spending habits, eCommerce platforms will have to stay ahead of the game if they want their merchants to remain relevant in this ever-evolving digital economy.
With the expected rapid growth of the eCommerce channel and further proliferation of these technologies and trends, merchant acquirers will need to dedicate a significant amount of resources to developing eCommerce partnerships and strategies. Successful eCommerce-focused acquirers will need to integrate these ancillary offerings and tools into a centralized platform that provides eCommerce merchants with the tools and functionality they require to operate.
Looking for more?
Check out TSG’s Directory of eCommerce Providers & Marketplaces. This directory takes a deep dive into the developing digital world of commerce, highlighting industry statistics, figures, and trends to help payment providers stay informed and ahead of the curve. The report provides information on 355 leading eCommerce technologies and platforms, serving as a great starting point for providers looking to develop an eCommerce strategy.