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The jack of all trades

We serve all, always and everywhere…now, do you?
Looking at the online payment processing propositions of PSP's, one could get the impression that every PSP can serve all, always and everywhere, regardless of the merchants industry, currency, merchant locale or payment method needed. This fabulous development is something we Germans call ‘die eierlegende Wollmilchsau’. Yes, it sounds strange and when translated into English you will receive something like ’ the pigs might fly' or ‘the jack of all trades'. 

Read my mind 
Comparing the web presentations of the five leading payment service providers in Europe, just one thinks that it’s a good idea to offer industry solutions while the others apparently think that their services are the overall solution for everyone. Now, if I was a retailer or a travel agency, who would give me more confidence, the PSP that looked into the challenges of my specific industry or the one that pretends to know it all? I think that this also explains that just this one PSP thinks that industry related services like i.e. the payout services are worth mentioning, which I would think is quite important when I am in the gaming and gambling industry or an online brokerage. 

The world is flat 
Very interesting is also the fact that all of them offer multi-currency processing without explaining the actual benefits. I am pretty sure PSP’s know the differences between authorization and settlement currencies and their implications for merchants and buyers. On the other hand I am wondering if PSP’s ever heard of multi-currency bank accounts and the advantages for their merchants having one. By the way – what are the rules of accepting non Euro transactions from Eastern European countries anyway? Are there rules and regulations merchants need to take into account and how about Asia, India or China? Do they want to let us die ignorant or are they just not as global as they pretend to be? Is a PSP already a global player when offering VISA/MasterCard international ?

We have them all 
Offering as many payment methods as possible also seems to have become a common trend. The question here is if merchants really need that many payment methods. Is it not rather the question which ones are suitable for them mapping them to their business strategy and product. I guess this would be industry specific…no? Payment methods that should be used are highly dependent on the industry and market the merchant is acting in. In the end the main goal is a high conversion rate and a positive customer experience. It’s all about reach, protection, scenarios and fair pricing and not about how many logos you can place on a payment page. 

The mystery of transaction and MSC pricing 
Well, pricing is just another black hole. One could think to be on a Turkish bazar as just one PSP is transparent enough to disclose prices and their markups. What are the others hiding? Is interchange plus and tiered pricing really that complicated or are they so used to blended rates that they don’t even know anymore how to calculate their break-even themselves? 

What’s your proposition? 
Completely missing are implementation and integration models i.e. SAP integration by middleware or other differentiators when it comes to back office processes and merchant logistics. Uptime and downtime reports are hard or not to find and neither are SLA’s. The differentiation between services, products and solutions is by far not consistent and most of the time misleading. I personally would like to see the chemistry approach to this definition, which says that a solution is a mixture composed of two or more substances dissolving in another. The business definition however seems to be, that a solution is solving a problem, thus presupposing the existence of a problem that needs to be solved. I do not hope that PSP propositions are based on solving problems but deliver a product service mix that enables the merchant to be successful. I know that PSP’s can deliver much more than they are advertising.

Now…do you? 
Which leads me to back to my initial question… do PSP’s serve all, always and everywhere? Are they a ‘eierlegende Wollmilchsau’? Looking at their Websites my answer is yes and no. They could well be, but if they are will be their secret forever ….

 

Andre Malinowski
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Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 23 June, 2011, 13:27Be the first to give this comment the thumbs up 0 likes

@Andre M: Vendor tendency to be "eierlegende Wollmilchsau" probably stems from the customer tendency of "Waehrend des Essens, kommt das Appetit", if I remember the German saying correctly i.e. The appetite builds during the meal. The vendor starts with a finite product or service, the customer asks for extensions and customizations, the vendor builds them and then finds that they're quite relevant for other customers in other industries. This leads them to believe that "a payment is a payment is a payment". While their belief is largely valid at the technology level, it tends to make the customer question whether the vendor understands their business at all, as you've rightly pointed out. Although it's imperative for PSPs to deliver out of a single technology platform so that they can achieve scale, it's equally important for them to create different go to market messages for different industries in order to gain mass adoption.