With the economy in a precarious and unprecedented situation due to the pandemic, many companies are reassessing their business strategies to adapt to the rapidly changing environment. For some merchants, this may entail bolstering their digital capabilities. For others, this may result in changes to the physical layout of the business.
No matter the case, one area where companies should focus on is payments. Despite being an integral part of any company that buys or sells goods and services, payment systems often go overlooked. Payments may seem simple enough, but the underlying systems enabling them are rather complex and can involve a myriad of different vendors, processes, and rules.
The lack of attention on such a complex subject leads many companies to rely on ineffective payment processes. This can cause a variety of problems, including poor checkout experiences for consumers, unfavorable terms and fee structures for merchants, and inadequate security procedures.
To help companies better understand why payment optimization is important and what services exist to help improve their payment systems, PaymentsJournal sat down with Raymond Pucci, Director of Merchant Services at Mercator Advisory Group. During the conversation, Pucci explained how Mercator offers a payments systems optimization assessment that can benefit merchants in numerous ways.
Why is there a need for a payments optimization assessment?
From the perspective of the customer, payments are simple. Whether it’s an in-store purchase on a card or a card-not-present e-commerce transaction, the customer usually just produces their card (or card information) and the purchase is made. However, what’s actually going on to support the payment is far more complex than it seems.
“When you pull the curtain back, an electronic payment transaction turns out to be a pretty complex process,” noted Pucci. “You have a maze of vendors, technologies, regulations, and standards.” This is especially true for many nonprofits, namely institutions of higher education, private schools, and healthcare facilities.
These organizations typically operate an array of venues across campus environments, including retail stores, sports and entertainment events, cultural attractions, medical departments, and online programs; each of these venues comes with its own unique payment needs. Complicating things further is that many of these institutions have payment systems that were assembled piecemeal throughout the years as that institution evolved and expanded.
It’s not just non-profits that could benefit from payment optimization; any merchant or business that accepts card payments stands to gain from improving their payment systems.
Pucci also explained how the rise of omnichannel commerce has further complicated the payments space. Even before COVID-19 forced more commercial activity online, consumers were utilizing numerous channels to browse, shop, and pay for goods and services. For merchants, this means that they must support more payment methods and create seamless payment experiences both online and in-store.
All these factors combined make it hard for organizations to fully understand and manage their payment systems. Yet by better understanding and managing their payment systems, businesses can create better customer experiences, improve security, and reduce operating costs. Mercator can help companies develop this deeper understanding.
How can Mercator Advisory Group help?
Mercator’s team of experts will conduct a comprehensive evaluation of an organization’s payment systems. Since Mercator has experts in all aspects of the payments industry—including credit, debit and alternative products, prepaid, commercial and enterprise payments, merchant payments and services, and emerging payment technologies—it is able to help companies across a range of verticals.
“We have the ability to deliver a tailored payments optimization assessment that meets the customized requirements for a merchant, institution, or business within a fixed timeframe and budget specification,” said Pucci.
The assessment covers existing payment systems, policies and procedures, vendor contracts, and a company’s payment governance structure. “We look at payment systems at the operational level, reviewing them to see that they meet current standards in areas such as POS features, risk management, technology standards, vendor management, and contract status, all within an appropriate payments governance system” explained Pucci.
Since Mercator is an independent company, it does not endorse any particular vendor. Instead, it helps companies find vendors that are best suited for a specific service or need. This can be particularly helpful for institutions of higher education as “they may have a very fragmented payment system because over the years they’ve grown, they might have multiple payments vendors that provide overlapping services.” Mercator will help identify which vendors are superfluous and which can offer a similar service for less money.
At the end of the review, the organization will be provided with “a framework to standardize the use of payment cards solutions across the organizations,” said Pucci. Mercator will recommend payment card solutions that support the specific needs of the organization, while reducing costs and complexity.
Crucially, “there’ll be a methodology and a plan to transition, if necessary, from a current solution to a more favorable solution, and also for communicating the changes in the solution standards to the users and the stakeholders within the client organization,” explained Pucci.
Companies that have conducted such a review have seen tangible benefits. For example, “in one instance, we found that a business had a contract that had never been updated for 10 years. So they were missing out on the latest services and favorable fee structure from this particular payments vendor,” said Pucci.
Those interested in learning more about Mercator Advisory Group’s payments systems optimization assessment can sign up for a webinar on the topic by filling out the form below.