channels, enabling users to accept and manage online and offline payments.
“This means that we can support customers’ global payment needs from end to end through a ‘one-stop shop’, including card acceptance, digital wallets, bank account- based payments and alternative methods,” says Knothe. He adds that the approach provides a combination of integration, scalability and adaptability that can respond as customers’ needs evolve over time.
The value of the connectivity provided by a platform is not simply the omnichannel approach to payments, but the additional services that can be integrated, such as specific solutions for marketplaces, as well as integrated foreign exchange (FX), liquidity and financing solutions. Companies selling cross-border, dynamic currency conversion in the customer’s home currency create a seamless experience for the customer, without creating an FX exposure.
Companies across industries are also leveraging digital marketplaces more actively. Even before the pandemic, digital marketplaces were forecast to account for 60% of online sales by 2023, an increase of 22% each year compared to 2019 figures,4
Figure 2: Ongoing shift to digital payment methods
• While the overall payment market is expected to steadily grow by 6% CAGR to US$2.7trn until 2023 (McKinsey), some payment methods benefit more than others
• Customers shift from traditional payment methods to contactless, QR code-based payments (e.g. Alipay) and wallets (e.g. Google Pay)
• Treasurers shift to new and digital payment methods:
- Instant payments- based B2B
-- B2B payment virtual cards - B2B API-based payments
Mobile payments and B2B wallets for vendors
41% of cash
users tried a contactless card
went to a challenger bank
31%
who owned a card added it to a digital wallet
35%
Majority cited ease, convenience and speed as
the reason for usage
of customers experimented with QR code payments
27%
Two out of five customers are over 40
Source: Capgemini Financial Services Analysis, 2020
so
solutions that connect buyers and sellers and accelerate flows are becoming essential.
In one example, Thorsten Woelfel, Global Head of Card Acceptance, Deutsche Bank Merchant Solutions, says that “the
marketplace owner uses Deutsche Bank’s acceptance payments infrastructure for their platform sellers so they can accelerate and automate cash management processes such as settlement and reconciliation.”
Beyond the additional benefits of a single provider of merchant solutions and wider cash and treasury management
Figure 3: Global e-commerce payment methods
60% 50% 40% 30% 20% 10% 0
Digital/mobile wallet
Debit card Credit card
Bank transfer
Payment
by cash on delivery
Buy now pay later
Charge and
deferred debit card
Direct debit
Prepaid card
Postpay
2020 2024 (forecast)
services, there are also potential cost advantages where a bank is both card issuer and acquirer.
Woelfel explains, “By acting as both issuer and acquirer, we can deliver substantial savings to clients, and accelerate the flow of funds by avoiding having to route the payment through the cards network or perform additional end-consumer validation. This is also leading to an improved checkout conversion rate.”
Prepay Other Source: Worldpay Global Payments Report 2021
Redefining the future of payments The opportunities for integrated merchant solutions that connect buyer and seller will
58
Banks’ moves – such as Deutsche Bank’s expansion into merchant solutions – do not mean that fintech providers are no longer relevant. Instead, it creates the opportunity to connect innovative solutions through a single channel, avoiding the fragmentation associated with multiple providers and platforms. Inevitably, no single provider, whether bank or fintech, and whatever their investment capacity, will seek to develop every element of their solution. Rather, partnerships that leverage the strengths of different parties, but are delivered to customers through a single relationship and platform, are more likely to meet the needs of corporations with complex needs and multinational operations.
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