Featuring contributions from Mark Beresford, Director at Edgar, Dunn and Company (EDC).
The Merchant Payments Ecosystem (MPE) conference takes place every year in Berlin, one of Europe’s most innovative and exciting cities. MPE brings together thousands of people to discuss the cutting edge of payment technology and trends, with merchants and suppliers alike willing to collaborate, discuss best practices and predict the future of payments.
After being shortlisted for Startup Innovation of the Year at MPE last year, MPE was of course one of the first conferences on our list for the year. Having attended this year's MPE, here are our predictions for the next 12 months, with some additional commentary from one of the panel moderators at the event.
New payment methods seem to be appearing every other month at the moment, and these payment methods - often catered to a specific market (e.g. Pix in Brazil, iDeal in the Netherlands) - are often preferred by locals, especially those making purchases online. Regional and global businesses will have to stay ahead of these new payment trends to ensure new or continued access to these markets, and merchants focusing on higher acceptance rates must meet these local expectations.
Merchants are increasingly adopting a multi-PSP and Multi-Acquirer strategy, either routing payments themselves or using a payment orchestrator for payment routing based on defined rules. Mark Beresford, Director at Edgar, Dunn & Company (EDC), said “it is now becoming more essential for merchant businesses to establish multiple connections for payment acceptance, not to put all their eggs in the one basket. This has made it more complex for merchants to achieve this themselves and this why Payments Orchestration has been ideally placed to reduce the complexity.” The need for a multi-PSP and multi-Acquirer strategy is in response to many factors, one of which is the need to expand geographically and be able to accept payment methods that local consumers prefer to use, maximise approval rates and minimise cost processing cross-border transactions. Mark also adds; “What Payment Orchestration is not achieving today is payment reconciliation.” To move quickly, merchants must think about the end-to-end process of adopting a new PSP or Acquirer, from connecting to their gateway to supporting back-office reconciliations and a bullet-proof financial close process.
Data has the power to help or hinder merchants over the next year. Used optimally, data can provide merchants with insights into their payments and give them a better understanding of buyer behaviours. On the other end of the spectrum, data can become a burden when it’s not consistent and will lead to manual and bespoke processes. Given the increased use of local payment methods and a multi-acquirer model, it’s important that merchants adopt a data-first strategy to their payments to optimise processes and make better strategic decisions.
With another MPE down, we’re already looking forward to MPE 2024!