Despite the many setbacks of the past few years, the global payments ecosystem has remained remarkably stable, with tremendous growth potential having emerged in the face of the pandemic’s many disruptions. While this has led to increased competition, it has also given banks and other financial institutions (FI’s) an opportunity to innovate and differentiate their service offerings beyond pure transaction processing. One major area that FI’s are finding success with are merchant services, which can serve as an important competitive advantage. As the number of new payment methods continues to grow and customer demands change, adopting merchant services gives you a convenient solution for their core banking customers that can also generate business growth.
Merchant services is a broad term that describes a wide range of financial services tailored to businesses, but it most often refers to processing payments. Merchant service companies provide businesses and individuals with the tools and requirements to accept credit cards, debit cards, and other forms of electronic payment for transactions to take place. Though global fintech and payment companies dominate the merchant services market, many banks and traditional FI’s are also moving into the space, with the number of Merchant Banking Services businesses in the US having grown 4.1% per year on average over the past five years.
Rather than just a simple financial transaction, merchant services can be part of a larger commerce proposition that bolsters sustainability and drives growth. Not only does adopting merchant services give banks a convenient payment solution for their customers, but it also serves as a valuable resource for companies to grow their businesses. Payment data can provide valuable insights that can be used to better target and convert customers and optimize their business operations.
There are several other advantages to offering merchant services as well: offering merchant services tends to result in longer business relationships, increased product adoption and higher DDA balances, meaning it’s a value driver for all parties involved. Merchant services also allow for innovative features that can add more value for customers, such as loyalty programs and rewards for meeting personal goals. With a growing number of digital wallets now offering merchant services and other extended payment options, banks and other traditional financial institutions need these types of differentiators to draw in customers and maintain interest.
So if you are a bank or financial institution that is looking to expand into the merchant service space, reach out to Amaryllis. Our robust platform includes everything that you need for effective merchant services, from payment acceptance and flexible payouts to underwriting and risk management. With the Amaryllis Payment Facilitation solution, you can provide quality merchant services to bank customers without needing to rely on a tech team or IT resources.