Do we really need this many payment providers?

Years ago traditional banks dominated most of the financial offerings but as technologies develop, there is a tendency of traditional banks to lose some of their functions. Today’s financial industry looks completely different from ten years ago as it has undergone some drastic transformations, including emerging Payment Service providers which are considered as one of the biggest challenges to traditional banking monopoly.

Payment service providers are important links in the global financial chain, as they bring merchants, consumers, card brand networks, and all the financial parties together quickly and effectively through one simple payment process. There are a number of payment providers in the world like PayPal, Skrill, Neteller, Revolut, Stripe, Bitpay, Cayan, Paysafecard, and many many more. Even more, the number of them is rising and all of them together do make modern commerce possible. However, from hundreds of services to choose from, it’s getting difficult to decide which of them is more suitable for your business and which of them is more reliable for the customer’s experience. All these things make society a bit confused, raising a question of do we even need this many payment providers? Or what does their presence really mean to the future of the financial industry?

How to choose a payment provider

Payment providers are the first step in the online payment process and they are essential for the e-commerce companies to accept online transactions simply. Since all the payment companies, traders or customers are altering to the digital methods, payment services are in the process of gaining more and more influence. Particularly, as Business Insider reports, e-commerce sales made about $150 billion in 2019, which is almost 11% of the total retail. This is why it’s not a surprise that they want to grab a larger piece of pie and rule the financial industry but as more companies are taking part in this process, making the effective decisions for the brokers gets more difficult.

Understanding which one is the best for your business is hard since each of the many payment providers has its own specialization and there are even the ones that countries have for themselves particularly. For example, Stripe, which is one of the 12 payment companies that made the fintech of 2019 according to Forbes, helps small online businesses to process payments and now it serves tech giants like Amazon and Microsoft. Paypal is a leading provider since it debuted as a low-volume payment processor. And Netteler which is a smaller provider was always considered as a payment provider for online casinos, but the recent surge of people who play with Paysafecard bonus casino pretty much busted that myth.

Paysafecard is a prepaid credit card, one of those that are new additions of the online casino world but which is definitely among one of the best ones, as its a top trusted online payment provider. What makes Paysafecard a perfect choice is that the transactions are made right away and the money is transferred immediately. You can be ready for great offers from gambling sites when you use this provider and it’s actually safer than many other credit cards for online casinos. So, it’s up to you to take advantage of many different payment services and use Paysafecard which is definitely one of the simplest and the most convenient.

Why do we need different types of Payment providers?

At the first glance, having these many payment providers looks weird and confusing for the traders and for the customers but actually it has so many advantages. First of all, all of the payment methods aren’t recognized globally, and using different types of payment services allows you to purchase all your desired products with better exchange rates from all over the world. Also, customers are delivered a better experience as the use of local providers as well as the global ones helps us minimize declined transactions and latency times. Besides, it helps us optimize our payment flows as different providers have different acceptance rates and they charge varying fees for certain payment methods. Other than that, using multiple payment providers gives us a chance to minimize processing fees and use the ones that provide higher acceptance rates for certain transactions, giving the consumers a wide range of flexibility.

However, the management and administration requirements can make a little bit of trouble as each new addition needs a negotiation of contracts and requires more time and money. Also, the data is siloed in different systems and the traders do not have a system-wide view of all payments activity which makes it difficult to compare provider performance and understand what areas need to be optimized. Besides, using multiple payment providers may mean that the financial market is going to get oversaturated, causing a lot of confusion among the consumers and the brokers.

Conclusion

In conclusion, payment service providers, in general, are important players in the global payment but in today’s world, it’s getting harder to decide whether it is good to use multiple payment providers and have access to all the goods and services the one desires or to avoid confusion caused by the process of deciding which one is the most convenient. A solution can be integrating and managing new providers but also taking the payment flows into account. However, it’s obvious that one needs to wind a way to manage, track, and check new providers once they join the market. It is still not clear what the future of payments will look like and what it actually means for the finances but it’s definitely going to be interesting.