Industry Outlook

In order to deliver the kind of growth and disruption that payments startups were looking for, it wasn't sufficient to simply be better at delivering technology at scale.  They had to also rethink the different customer journeys that were involved in the payments industry at the time.  This included looking at ways that technology could replace manual processes always with an eye toward delivering better value to the customer at a lower cost to the company.  While it sounds like a pipe dream, several companies were able to deliver on exactly that promise.

This is where payment facilitation and other models became very popular.  Because payment facilitation allows the Payment Facilitator to aggregate processing on a single MID, it also eliminated the time it would take to board a new MID in preparation for a new account to be boarded.  That meant that payment facilitators could reimagine the merchant onboarding process and led to significant paradigm shifts to the way that credit and underwriting risk could be managed at scale.

This optimization effort also targeted the legacy sales approach to a "boots on the ground" philosophy.  ISVs (or independent software vendors) became a critical part of the conversation as they could pair their non payments related software with a payment gateway and create an autonomous sales pipeline that can increase net revenue for both the ISV (through revenue sharing with the payment gateway), and the payments company (via operational efficiency gains).

So is this challenging of the status quo complete?  Absolutely not.  There are still opportunities to optimize processes and solutions by looking at the underlying assumptions and challenging those first.  I believe that payments companies that are going to survive in the payments space of tomorrow have to be ruthless about challenging their assumptions--whether they've been in business for 5 years or 50 years.