In this age, merchants must accept debit and credit cards, Apple Pay, Google pay and other digital payments to survive, especially after the huge rise of such payments during the COVID pandemic. Banks and other financial institutions must offer these Payment Services to their customers in a modern way, up to par with the offering of large Fintechs.
So, providing Payment Services became very important for financial institutions. It offers valuable insights in the business of your merchants. Which in return helps to offer new products and services to these merchants: a loan, or an extension of credit facilities for example. And offering the merchants great insights in their own business, by providing them with dashboards and overviews you can help them prosper, as they can see which of their marketing campaigns work. You can even let them compare their own stores to similar ones, to see how they are doing relatively.
“Banks and other financial institutions must offer these Payment Services to their customers in a modern way”
Many banks decided to incorporate Payment Services by buying a PSP. Swedbank acquired Payex, ING acquired PayVision and recently Deutsche Bank and Fiserv founded a Joint Venture to offer Merchant Services in the German market. However, these acquisitions require investments of hundreds of millions euro’s, in a market where it becomes clear that the acquisitions of cheaper non-performing PSP’s doesn’t make sense, while the acquisition of successful PSPs becomes unattainable, as their valuations soar well beyond € 1bn. And the acquisition of a PSP is only the beginning. Technically, financially and compliance-wise the new PSP must be integrated in the acquiring financial institution, which often gives rise to many headaches, and more money spent.
There is an alternative, even for banks that don’t want to settle for bland off-the-shelf solutions. Ximedes developed Merchant Services components for ING, Swedbank, Fiserv and EMS. These components fit seamlessly in the existing infrastructure that is already in place, making the time-to-market short. Rabobank and Loomis Pay went a step further. Ximedes developed almost the complete payment services platforms for these parties,allowing them to launch the new service in about 6 months. Yes, six months, probably shorter than the time needed to shortlist suitable PSPs to acquire. In that short span of time, Ximedes develops the components, but also work with the organisation and auditors to become PCI-compliant and have a palette of terminals licensed by Mastercard and Visa, so they can actually start processing payments for their new merchants. “Ximedes developed almost the complete payment services platforms to launch a new service in about 6 months.”
And for both Rabobank and Loomis Pay, Ximedes added the possibility to run cash payments over Ximedes’ platform. So, merchants just need one contract and receive one consolidated payout for cash, terminal and online payments. Most financial institutions perceive it as a downside that with this self-built solution, marvelous as it may be, you have to attract the new merchants one by one, whereas in the acquisition scheme the clients come for “free”. However, spending even 10% of the money you’d spend on an acquisition brings you many new merchants, but it does require setting up the new merchant services department in an autonomous way, with a separate laser-focused marketing and sales department.
While building PSP’s, Ximedes almost automatically specialized in B2B onboarding. It is possible to onboard new Merchants within minutes with all AML, KYC, Credit Rating checks being performed during the process. And the best part of this: This onboarding flow is fully yours! Often this onboarding flow doubles as a whole new sales channel, offering the appropriate terminals and payment methods to the new merchant as they are boarding.
The Gateway is the software that connects the online payment APIs and the payment terminals to the acquirer. This is the software that gives you control over the merchant’s payment requests, guiding them to the right acquirer, connecting them to loyalty schemes, controlling if they are processed right away, or later, which can have tremendous cost-advantages. Gateways have to be compliant with PCI-regulations and play a large role in getting the card schemes to certify your payment platform.
From a merchants’ perspective, this is by far the most visible part of the payment platform.This is the place where they go when they decide to become a customer. This is the place where they start the boarding flow, and this is the place that provides them real-time information about the transactions that were processed and all their details, the settlements they may expect the invoices that were sent to them, etc. The Merchant Dashboard should be the focus of our UX-teams, but it should also be able to handle billions of transactions, like the Merchant Dashboard Ximedes created for one of the largest Dutch banks and that has been running without a hitch for the last 3 years.
The most invisible set of components are formed by the Reconciliation and Settlement features. Keeping track of every transaction, making sure the right fees are applied, and settling with the customer, these components control and validate every fraction of a cent that flows through your organization. So although less visible, arguably these are the most important components to get right, having built these types of components for over a decade, Ximedes nailed them all.
As merchants want to keep up-to-date with their transactions, settlements and invoices, the organization offering Merchant Services wants an aggregated overview of all transactions. This helps them to make an analysis of the market, and compare similar merchants, but also allows them to run a service desk that can actually help merchants if they call. Reporting can be provided by a technology Ximedes provides, but data can also be streamed to existing data warehouses, or data lakes.
Many banks and other financial institutions start offering Payment Services to their clients. Today's question is: how to expand and tailor these services to enter new segments. And that’s where Ximedes comes into play. Ximedes’ team converts business plans into state of the art software. Maybe it isn’t that hard after all, and can we all witness your bank launch modern, high-quality Payment Services at an affordable price in a short time frame.
For more information and examples please visit ximedes.com or send an email to firstname.lastname@example.org.
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