The changing face of payments: offering more value to your merchants
By Steven Velasquez, Head of Partner Business Development for Elavon, Inc.
As the worlds of technology and financial services merge, providing your merchants with a complete breadth of offerings is crucial to retaining existing customers and developing long-term partnerships with new ones. Enter the concept of embedded finance. Whether you’re an Independent Software Vendor (ISV) or an Independent Sales Organization (ISO), offering value-added financial services beyond payment processing means greater convenience for your customers, stickier relationships and the potential for more revenue streams.
What is embedded finance?
In the simplest terms, embedded finance is when a company offers financial services that complement its core product or service such as payment processing, lending or insurance solutions. A good example of an embedded financial tool is the ‘buy now pay later’ options more and more merchants are utilizing. The ‘buy now and pay later’ experience enables companies to offer payment installments to consumers without interest or fees, improving the entire purchasing experience.
But, it’s not just apps and software companies adapting their business models. Companies like Tesla are changing the consumer car buying experience by offering embedded insurance solutions, eliminating what was once a separate, and often, difficult process. Embedded finance effectively cuts out the ‘middle man,’ providing companies with a competitive advantage, increased revenue and more satisfied customers. These companies are venturing into the financial services space and changing the way we do business and buy services.
Software companies and ISOs are taking note and for good reason. Embedding financial services increases viable revenue streams while eliminating the need for the company to manage a complex financial process itself. Financial services APIs enable developers to easily embed this functionality, accelerating speed to market and enabling a more robust product offering.
Beyond payment acceptance
While payment acceptance is at the core of supporting your merchants, applying the idea of embedded finance to your value-added solutions means more business and an increased bottom line. Cash flow is the core of a merchant keeping their business open and running. In fact, 66% of small businesses say that funding timing has the largest impact on their cash flow management.*
Whether it’s paying invoices or payroll, or investing in a new technology, having money on hand enables them to achieve their goals. Now, more than ever, your customers are looking for solutions like same-day funding to expedite cash flow in a challenging business climate – and technology is making it happen. The Real-time payments (RTP) network, the first new core payments infrastructure in 40 years, empowers payments companies to build products that are more responsive to their customers’ needs.
Faster funding and alternative payment options are challenging traditional payment methods and reshaping the market. According to some estimates, the real-time payments market is expected to register a Compound Annual Growth Rate (CAGR) of 29.8% during the forecast period (2021 - 2026). ** As merchants realize the benefits of real-time payments, adoption rates will grow substantially.
Are you ready?
Elavon, backed by the strength and stability of U.S. Bank, offers same-day and weekend funding solutions powered by the RTP network to help your merchants improve cash flow efficiency. Through the bank’s ecosystem, we can deliver funds to your merchants within hours of closing out their batch – one of the fastest payment rails in the industry. The ability to access funds seven days a week enables your customers to be nimble and adapt their business operations to meet new customer and market demands.
However, it doesn’t stop at depositing funds through a merchant’s Direct Deposit Account (DDA). In the near future, you can offer your merchants direct disbursement of funds to the receiver’s debit card. The practical implications – employee tip reimbursement, expense reports and per diem to name a few – make funding that much more convenient. Regardless of batch window timeframes, your merchants can transfer funds anytime day or night – all within minutes.
If you’re interested in offering your merchants faster access to cash flow, let us help you identify if there are opportunities to offer more value. Get started here or give us at a call at: 844.983.0994.
* Payment Journal
** Mordor Intelligence