Modern technologies, such as digital wallets, are becoming an increasingly integral part of the software publishing industry. According to the latest PYMNTS Intelligence report, 71% of payment service providers are utilizing this technology and investing in innovations to enhance their capabilities.
The report, “Embedded Finance Ecosystem: Edition for Software Publishers,” developed in collaboration between PYMNTS Intelligence and Carat with Fiserv, provides insightful observations on innovation priorities among market participants in the software industry. Based on research conducted among 282 executive-level employees of payment service providers, independent software vendors (ISVs), and marketplaces from May 10, 2023, to August 25, 2023, the document contains a wealth of intriguing information.
One of the key findings of the report is that the software market and ISVs are striving to innovate in the area of digital wallets. Currently, only 26% of ISVs and 25% of marketplaces have integrated digital wallets. However, considering that as much as 38% of payment transactions in this industry are carried out through digital wallets, payment service providers are definitely gaining a competitive advantage. Nevertheless, ISVs and marketplaces can catch up by investing in embedded finance innovations.
However, ISVs in this industry face significant challenges with system integration and data availability. These issues pose significant obstacles for 26% of ISVs, which is twice the average for all ISVs. Additionally, the same percentage cites lack of data availability as the primary barrier to innovation. In contrast, only 15% of marketplaces and 8% of payment service providers identify system integration as the main obstacle.
The differences in innovation priorities among payment service providers, ISVs, and marketplaces reflect the challenges and opportunities associated with e-commerce. While 25% of payment service providers focus on risk management and compliance innovation, a significantly lower percentage of ISVs and marketplaces prioritize these areas. Conversely, 50% of marketplaces consider operational improvement as their top innovation priority.
Digital wallets and other embedded finance offerings have become crucial elements of success in this industry. The need for personalized innovation is increasingly evident as the software publishing market modernizes its embedded finance offerings.
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The source of the article is from the blog toumai.es