How eCommerce platforms are embedding payments.
Insights from Arthur Bedel.
Welcome to our latest edition of "Connecting the Dots in Payments with Arthur Bedel," where we explore the dynamic world of financial transactions and innovations alongside this esteemed payments professional. Join us as we uncover insights and trends shaping the future of payments.
eCommerce platforms are embedding Payments & FinTech services creating new value-added services for merchants to scale
👇 Over the past years, business models have evolved from Linear
🔸Linear — Providing value in a good or service itself.
🔸Platform-based-Ecosystem (PBE) — Value from facilitating transactions through non-obvious complimentary services within targeted thematic customer journeys located on a single platform.
In essence, Platform-based-Ecosystem focus on centralizing Value-added services (VAS) to create the most complete value proposition:
👉 Value-added-Services have been, for a long time, an element of the payments industry, especially the acquiring one. The development of platform ecosystem retailing solutions – where payment is one of the many services available - has turned VAS into mainstream solutions to which payment acceptance has become a complement and, comparatively, a commodity.
Stripe (everyone's hot topic right now with Stripe Sessions) and Shopify could both be considered as Platform-based-Ecosystem — one for payments and the other for eCommerce.
🔸Stripe and Shopify are in essence both partners & competitors today.
👉 By empowering Shopify's checkout for a long time now, Stripe has played a major role in Shopify's growth. Yet, today, Shopify has more payment providers within their ecosystem & Stripe offers competing services to Shopify.
👉 This is an example of how VAS are now de facto the value proposition to merchants, with payments going from being a central core service to a complementary addition.
Stripe vs Shopify
🔸For instance, Stripe started as a linear business model (PayFac and acquirer), then evolved to a platform, and has now finally become a full merchant journey ecosystem value proposition. As such, it is pursuing expansion to in-shop acquiring, in-shop smart terminals, and #wallet solutions for merchants to offer to customers.
🔸Shopify also started as a linear business model (software for merchants to set-up eCommerce), then evolved to a platform and has now become a full merchant journey ecosystem serving the entire merchant needs very successfully!
In order to keep its competitive value, Platform-based-Ecosystem, i.e. Shopify, will be required to stay up-to-date with their partnerships to delight their customers.
For this business model to provide optimal value, it's essential to have an agnostic approach. In the payment space, it is critical to partner with innovative providers:
🔸Payment Service Providers — Nuvei, Adyen
🔸Orchestration Layers — Gr4vy, Inc, Spreedly
🔸Token Vaults — Basis Theory, VGS
🔸others
Competition is good for business & yet Partnerships is where growth multiplies & so does the value offered to merchants 🚀
Source: Arkwright Consulting & Francesco Burelli 👋
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✍️ Connecting the dots in payments... Marcel van Oost & Arthur Bedel.
By Arthur Bedel