In the era of dominant electronic commerce, seamlessly integrating payments into the end customer experience is no longer just a preference, but a necessity. For e-commerce platform sellers, independent software vendors (ISVs), and software platforms, PayFacs (payment brokers) have become key in dealing with this challenge.
According to the “Embedded Finance Ecosystem: Software Publishing Edition” analysis by PYMNTS Intelligence and Carat from Fiserv, PayFacs in the software sector are using this control to reach further into the digital wallet space, a strategic move that can change their position in the market.
The report reveals that the software publishing industry is starting to adopt digital wallets as the standard for processing transactions. As a result, 71% of PayFacs are investing in the development and enhancement of their digital wallet capabilities to gain a significant competitive advantage in the industry.
Meanwhile, ISVs and trade platforms offer digital wallets at a much lower level, at 26% and 25% respectively, and do not show the same enthusiasm for expanding their services.
The report also reveals that PayFacs in the software industry processed 38% of all payments through digital wallets in the last 12 months – the second highest share among the four industries surveyed, with only 26% of payments made through digital wallets in retail. Overall, PayFacs in the software sector process almost 50% more payments using digital wallets compared to the retail sector.
The report further discusses the innovative strategies of PayFacs, ISVs, and trade platforms in the software industry. PayFacs focus on risk management and regulatory compliance, while trade platforms focus on operational improvement. ISVs consider both operational development and strategic business growth equally important.
However, introducing payment processing innovations in the software publishing sector is not without challenges. Significant integration of systems is a major issue, posing a particular obstacle for nearly 30% of ISVs in this industry – twice the average for all ISVs. In contrast, PayFacs and trade platforms report fewer difficulties in this area, with only 8% and 15% respectively identifying system integration as a major challenge.
The report emphasizes the importance of embedded finance solutions, such as digital wallets and short-term credit offerings, in the software industry. PayFacs, ISVs, and trade platforms that actively explore these innovations not only have the opportunity to better serve software vendors and generate new sources of revenue, but also stay ahead in the dynamic e-commerce environment.
FAQ:
1. What is the role of PayFacs (payment brokers) in the software sector?
PayFacs are key in integrating payments into the end customer experience for e-commerce platform sellers, independent software vendors (ISVs), and software platforms. They are responsible for payment processing and hold a strategic market position.
2. What payment processing innovations are being introduced by PayFacs, ISVs, and trade platforms in the software publishing sector?
PayFacs focus on risk management and regulatory compliance, trade platforms on operational improvement, and ISVs on both operational development and strategic business growth.
3. What tips are there for sellers looking to integrate payments into the customer experience?
It is important to invest in the development and enhancement of digital wallets to gain a competitive advantage in the software industry. Look into these tools and invest in them.
4. What are the challenges related to system integration in the software publishing sector?
System integration is a significant issue, especially for ISVs. Nearly 30% of ISVs in this industry report difficulties with system integration.
5. What are the benefits of implementing embedded finance solutions such as digital wallets and short-term credit offerings?
Adopting these innovations allows for better servicing of software vendors, generating new sources of revenue, and maintaining a competitive advantage in the dynamic e-commerce environment.
Suggested Links:
– PYMNTS – PYMNTS is a website that offers information on payments, e-commerce, and related topics.
– Fiserv – Fiserv is a global technology company whose solutions include payments, banking services, and other financial services.
The source of the article is from the blog elektrischnederland.nl