A new report from BPC reviews the market dynamics and trends in consumer payments that are leading to wholesale changes in how the acquiring business operates.
Next-generation acquiring
By examining what’s driving change – from regulation and the huge increase in merchants accepting electronic payments through to growing diversity in consumer payment options – the new report argues that the acquiring segment is going to have to change dramatically to adapt and survive.
The new study from BPC explains how, the second wave of the digital revolution has been characterised by three phenomena: a rapid increase in the number and types of merchant accepting electronic payments, vast growth in the different ways consumers and businesses can pay, and an increased regulatory focus on transaction and system security to guard against new forms of fraud arising in the online world.
As merchant number soar by 30% over the next five years[1], acquirers will experience huge pressure in terms of managing higher volumes of transactions per second (TPS) as more consumers pay electronically.
Furthermore, these new merchants are likely to be micro merchants and Small and Medium Enterprises (SMEs) facing specific challenges in terms of costs – as well as the need to transact and settle funds rapidly.
Alongside rising transaction volumes and massive numbers of new merchants entering the system, BPC also track the emergence of new payment types, from QR-code payments in Asia through to Super-Apps such as Brazil’s Pix and Kazakhstan’s Kaspi.
These new payment types are growing in popularity even as fresh regulatory mandates appear, designed to prevent digital-specific payments fraud vectors such as Account Takeover (ATO), Synthetic ID and Automated Push Payment (APP) fraud.
As these market trends increasingly make their presence felt over the next five years, BPC argue acquirers are going to have to adapt to survive, modernising outdated core systems that cost them up to 70 cents in every dollar of their IT budget[2] and offering a wider range of services at lower cost to suit the needs of merchants new to electronic payments – as well as consumers with growing appetite for new payment forms.
BPC’s report sets out an optimal approach to the delivery of what it claims will need to be a great leap forward.
The delivery of modern, efficient acquiring technologies that are capable of handling huge increases in transaction volumes, more payment types, and a wide range of new product offerings attractive to merchants who will have a laser focus on low costs, system reliability and performance, and products that are tailored to their business needs.
To find out more about how the digital revolution is leading to a new paradigm in acquiring systems, download the new report from BPC now.
[1] The Digital & Card Payment Yearbooks 2024
[2] McKinsey & Co, “Winning in Digital Banking”
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