In the era of dominant electronic commerce, seamlessly integrating payments into the end-user experience is no longer just a preference but a necessity. For sellers on e-commerce platforms, independent software vendors (ISVs), and software platforms, PayFacs (payment facilitators) have become crucial in addressing this challenge.
According to the “Embedded Finance Ecosystem: Software Publishing Edition” analysis by PYMNTS Intelligence and Carat from Fiserv, PayFacs in the software industry are leveraging this control to venture 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 adopting 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 commerce platforms offer digital wallets at much lower levels – 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, where retail had only 26% of payments made through digital wallets. Overall, PayFacs in the software sector process nearly 50% more payments using digital wallets compared to the retail sector.
The report further discusses the innovative strategies of PayFacs, ISVs, and commerce platforms in the software industry. PayFacs focus on risk management and compliance, while commerce 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 system integration proves to be a major obstacle, affecting almost 30% of ISVs in this industry – twice as much as the average for all ISVs. In contrast, PayFacs and commerce platforms report less difficulty 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 commerce platforms actively exploring these innovations not only have the opportunity to better serve software vendors and generate new revenue streams but also stay ahead in the dynamic e-commerce environment.
FAQ:
1. What is the role of PayFacs (payment facilitators) in the software industry?
PayFacs play a key role in integrating payments into the end-user experience for sellers on e-commerce platforms, independent software vendors (ISVs), and software platforms. They are responsible for processing payments and hold a strategic position in the market.
2. What payment processing innovations are being introduced by PayFacs, ISVs, and commerce platforms in the software publishing sector?
PayFacs focus on risk management and compliance, commerce 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. Explore these tools and invest in them.
4. What are the challenges associated with system integration in the software publishing sector?
System integration is a significant issue, especially for ISVs. Almost 30% of ISVs in this industry face difficulties with system integration.
5. What are the benefits of adopting embedded finance solutions such as digital wallets and short-term credit offerings?
Implementing these innovations allows for better service to software vendors, generating new revenue sources, and maintaining a competitive edge in the dynamic e-commerce environment.
Suggested Links:
– PYMNTS – PYMNTS is a website that provides information on payments, e-commerce, and other 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 myshopsguide.com