The past decade has seen a sweeping transformation of consumer behaviors, yet major payments providers have not proportionately reflected this shift. Not until a global pandemic hit did we see a concerted effort by the financial sector to elevate products and services.
This era of change has contributed to the rise of fintechs, which now account for 7.1% of all startups globally. We’ve even seen growing investor interest in the fintech space, with the likes of Marqeta estimated to be valued at $4.3 billion after filing its IPO.
However, with this rapid transformation arose an entirely new and dangerous risk: tunnel vision.
As businesses felt the pressure to adapt to the rapidly evolving needs of their clients, their primary focus became getting the solutions they needed in the shortest time possible. While speed is an important factor in the modern world, it should never be at the expense of efficiency.
Nowhere does this apply more than it does to the dynamic payments industry. Picking a payment partner is not a decision that should be taken lightly; it requires a careful assessment that considers not only how they can help your business achieve its current goals, but future ones as well.
Picking the right payment partner means finding a good fit that can provide your business with flexibility and access to experts during development, implementation, and most importantly, when any problems arise. Making this decision quickly due to lack of expertise within your organisation is not a risk worth taking; especially in the long run, when you may be unpleasantly surprised to discover how much it costs to switch payments providers.
With decades of cumulative industry experience, we feel the responsibility to share some of the insights we’ve discovered while developing Qolo’s solutions for our clients. Our aim is to help companies navigate the ever-changing payments landscape and best prepare them for any opportunity.
Today, we’re breaking down the two major risks associated with this so-called tunnel vision when partnering with a payments provider:
Packaged solutions are only one piece of the puzzle
When seeking the quickest route to market, companies may be inclined to opt for partners that provide packaged solutions. The reason for this lies in the complex nature of payments infrastructure and the shortage of resources to understand the big picture, as payments expertise becomes increasingly rare. Due to this lack of expertise, businesses rely on external parties to guide them in implementing solutions.
However, while these solutions may be suitable for some, it’s important to emphasize that one size does not fit all. Especially over the longer term — more on that later.
By opting for packaged solutions, companies are required to pay sizable amounts of their revenue in associated costs. These costs may be justified if a payments partner can provide flexible account structures, but in the absence of these capabilities, companies should not have to forego these costs.
For any business, the ability to scale efficiently should be a major priority. That’s why your payment processor should accommodate your upgrade path, providing you with the flexibility you need to grow. It can be short-sighted to pick a processor primarily because it is the fastest route to market, as it doesn’t account for one important consideration: will the platform help my business navigate the potential risks of rapid growth?
When people think about payment processing, they often focus their attention on the process of transferring money from one place to another. Often overlooked is all the leg work that goes on in the background, and this is where the right processing partner can help you understand what is happening behind the scenes and provide a suitable solution catered to your business.
Think ahead, the right choice can save you losses
Tunnel vision impairs the ability of companies to make longer-term considerations when it comes to their payment processor. As packaged solutions only provide a quick fix, it does not provide a frictionless upgrade process. And so, when companies realize the need for a partner that can accommodate flexibility and customization, they risk losing even more because of the “hidden” fees associated with early termination of their contract.
When it comes to payment processing, merchants should be free to leave whenever they want without penalty, but that is often not the case. It is in the best interest of payment providers to make it difficult — or virtually impossible — to terminate a contract early, eliminating the risk of losing customers to competitors.
Questionable practices have tainted the industry, elevating switching costs that charge businesses thousands of dollars for early termination. Not to mention the sunk costs associated with implementing the solution to begin with and the future costs of partnering with a new provider. Decision makers need to consider that restarting the process of migrating to a new processor can be time-consuming and cost-intensive. It requires dedicating the resources that could otherwise be directed towards improving the core products and services.
We’re proud to share that Qolo’s team is steeped in the history of payments. Its leadership alone has over 80 years experience in the industry and have worked on many firsts in the payments industry, like the first purpose-built mobile commerce platform and first prepaid payment APIs, to name a few. Not to mention, the team was behind the largest card conversion in history. It’s safe to say that no one gets the fast-paced demands of modern fintech companies better than we do.
What’s more, Qolo’s team is dedicated to driving transparency and innovation in the industry, enabling businesses to easily upgrade payment solutions at any stage of their growth journey. With a client-first approach, we work to address the needs of our customers and find ways to help them optimize their payment systems for the future. Cultivating personalized approaches for companies in various industries, Qolo handles payments so that their clients can prioritize their companies: focusing on developing and improving their core products and services.
Demand More. Find out how Qolo can help future-proof your business.