MSPs Who Upgrade Through Third-Parties
Merchant service providers or MSPs have, for some time, been offering small and large retailers credit-card processing services as the primary product.
Most of them did not see other opportunities or never had the push to experiment or try other sources of revenue. But that was only until it became easier to deal with money, and open banking began transforming all sectors.
As we speak, Merchant Service Providers are working to reinvent themselves and taking on new roles in the e-commerce market. Most of them are looking to become more by boosting their major processing systems and positioning themselves as the future of value-added services (VAS).
Which Approach to Take?
The Merchant Services Playbook is a series study tracking the upgrade, by payments watchdog Endava. In its latest version, new results disclose that almost 2/3 of MSPs are ready to upgrade to better core processing systems; however, vendors still disagree on how to implement it.
Nearly 1/4 of Merchant Service Providers already admit they’ve made the update, and only less than 14% haven’t laid plans to upgrade. The rest of the vendors are divided between in-house renovations, mergers, and third-party remedies.
It’s attention-grabbing, however, that almost 60 percent of service providers planning to upgrade through third-party services also provide more value-added services, on average, than other groups.
Such MSPs enjoy the benefits of advanced capabilities without putting in investment to develop their systems. This group is also well-placed, even planning to add more value-added service offerings in the coming two years.
So far, those who work with third-parties are the most aggressive compared to vendors who use other approaches. In general, their push to introduce VAS to the e-commerce market has led them to look for capable partners instead of putting up their systems or updating traditional ones.
According to the Merchant Services Playbook, nearly 70 percent of vendors who outsource to third-parties lead the MSP group when it comes to alternative payments. Another 67.9 percent also offer data analytics, and over half, 55 percent sell account tools and the Marketing-as-a-Service (MaaS) feature.
Among the VAS products vendors see flourishing include;
- Sales enabling solutions like CRM,
- Escrow capabilities,
- Accounting integration,
- Factoring and,
- Inventory/supply chain management.
Hopefully, these new MSP offerings will add value to the e-commerce market and benefit retailers.
It’s obvious now that MSPs who upgrade by partnering with third-parties have it than their competitors who go for mergers or self-upgrades. Though an upgrade will indeed benefit e-commerce, a faster update is still a better way to go.
Author Bio: Payment industry guru Taylor Cole is a passionate payments expert who understands the payments world and what it takes to get the best merchant account . He also writes non-fiction, on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie in his backyard porch, as should all right-thinking people.