Do you have the right priorities when it comes to building a robust and reliable payments infrastructure?
In Part 1 and Part 2 of the Exploring Insights from the Payment Landscape Survey series, we looked at the growing adoption of payment orchestration and the subsequent need to empower payment development teams to create a streamlined and highly efficient payment system.
As we continue this series, we dive deeper into the findings of the Payment Landscape 2023 Survey — published in collaboration between The Paypers and Spreedly — to uncover the emerging priorities in various payment infrastructure initiatives happening over the next 12 months.
What are these priorities and how do they impact your business? Read on to find out.
Insight 1: Payment Optimization is the Top Priority for the Next Year
Of the 100 responding organizations questioned in the Payment Landscape 2023 Survey, a 53% majority named payment optimization as their top priority within the next 12 months.
When discussing payment optimization, two factors that stood out most included improving the management of payment failures and improving overall authorization rates. Though there are many benefits to improving authorization rates and reducing payment failures, the stand-out advantage is undoubtedly the ability to provide a more seamless transaction to customers.
Today’s customers are increasingly aware of the advancements in payment technology, especially in the wake of mobile payment platforms and apps that allow them to transact at the touch of a button.
As a result, any business dealing with payments is facing the growing customer expectation of a near-instant payment experience. This makes efficient and optimized payments vital for maintaining a high level of customer satisfaction and overall business success.
It is also important to note the influence of today’s macroeconomic conditions on the desire for heightened optimization. In times of instability, businesses need the means to safeguard liquidity and ensure customer retention, making the importance of optimized payment processes all the more apparent.
Insight 2: Open Banking & Payment Orchestration are Necessities
After payment optimization, the next biggest priorities for survey respondents were Open Banking (49% of respondents) and payment orchestration (44% of respondents). Additionally, 36% of respondents named “regional expansion” as a key development initiative in the coming 12 months.
When you combine these three priorities — Open Banking, payment orchestration, and regional expansion — with the number one priority of payment optimization, you begin to see the bigger picture of an overall broader and more dynamic payments landscape.
Businesses and customers alike are no longer content with disparate payment systems that are limited depending on their location. In today’s increasingly technological payments space, it is a necessity to have the flexibility and scalability that payment orchestration and Open Banking offer.
Currently, regulatory pressures in Europe and market pressures in the U.S. are placing greater emphasis on the need for API-based access to payment data, according to McKinsey research.
As the payments landscape becomes more global, this emphasis on APIs grows even more prominent.
Financial service providers and businesses dealing with payments need the freedom to transact with customers from all around the globe while still providing a streamlined payment experience. This requires a system leveraging APIs to more easily and quickly connect a payment infrastructure to the services, tools, payment methods, and other system components necessary for frictionless transactions.
Insight 3: Businesses are Honing-In on Fraud, Security, & Compliance
While not as immediately recognized as crucial priorities among survey participants, there is a clear increase in attention being paid to the overall security and risk mitigation within payments.
According to our survey findings, respondents are paying particularly close attention to regulatory compliance (42%), fraud (30.8%), and payment method security and vaulting (29%) when it comes to their payment infrastructure initiatives.
Aside from demonstrating the efforts to better protect customer data, what these priorities ultimately reveal is the continued struggle among businesses and financial service providers to adequately meet the requirements of compliance. Meeting compliance only increases in complexity when expanding a business into new regions and new technological territories, like Open Banking.
Along with the existing high-level regulatory oversight provided by the PCI DSS, regulators around the globe are starting to take note of the many major technology advancements hitting the payments industry. In turn, regulatory expectations are expanding to encompass these new technologies, which presents a fresh batch of challenges for businesses to consider.
Businesses today need a payment infrastructure and ecosystem they can trust without having to commit gargantuan amounts of manual labor and budgetary resources to compliance initiatives.
Insight 4: Exploration of Innovative Payment Methods Continues
Speaking of technological advancements, we are seeing a continued rise in interest around innovative payment methods, such as Buy Now, Pay Later (BNPL) services and cryptocurrencies.
BNPL services were named as a priority by 25% of respondents, while cryptocurrencies were named by only 9%. Despite these lower percentages, the fact that these payment methods are on the minds of payment professionals at all signifies the changing winds in the payment space.
These innovative payment methods do come with challenges from both regulatory and technological perspectives. We predict that we are likely to see a greater emphasis placed on cost containment and sustainable growth rather than the implementation of large, complex projects.
However, keep an eye on these alternative payment methods as they continue their climb in popularity, as they may just be the key to opening new pathways to global expansion and financial accessibility.
Key Takeaways: A Unified Payment Infrastructure is Essential
To create a successful payment infrastructure over the next 12 months, the key is finding ways to unify your payment system components through payment optimization and payment orchestration.
Spreedly’s research with The Paypers takes an in-depth look at the minute details that make effective payment infrastructures tick. Through our discussions with survey respondents, we have uncovered four major priorities for payment infrastructure initiatives today to keep in mind:
- Payment optimization is the key to improving authorization rates: While payment optimization holds many advantages, businesses and payment professionals are focusing their attention primarily on increased authorization rates and decreased payment failures.
- Open Banking and payment orchestration are vital to regional expansion: Open Banking, payment orchestration, and payment optimization go hand-in-hand when it comes to both global and regional expansion — and APIs will play a key role in this union.
- Fraud, compliance, and security must remain at the top of mind: As payment technologies evolve, the scope of compliance only broadens. Maintaining a clear and effective strategy for combatting fraud, ensuring security, and staying ahead of regulatory change is crucial.
- Innovative payment methods are here to stay: Though not yet poised to overtake the more commonly seen card and mobile payments, payment methods like BNPLs and cryptocurrencies are grabbing the attention of businesses and regulators nonetheless.
Discover the Full Scope of Payment Infrastructure Priorities in 2023
Together with The Paypers, Spreedly spoke with more than 100 organizations around the globe to uncover the growing importance and popularity of payment orchestration. The resulting survey report showcases our many crucial findings, including everything discussed here and more.
To read more about the top priorities for payment infrastructure initiatives in 2023 and beyond, check out the full Payments Landscape 2023 Survey today on The Paypers website.
Here are Spreedly, our approach to payment orchestration is designed to enable your business to embrace the latest payment technologies and optimize your payment infrastructure with ease. Developed with the specific needs of merchants, merchant aggregators, and fintechs in mind, Spreedly’s platform offers the ultimate payment stack for connecting to an entire ecosystem of payment services, tools, and providers.
Chat with the Spreedly team today to get started.