The Benefits of Payment Partnerships in E-Commerce
June 6, 2023
Innovation and progress have been two keywords to describe the payments industry as of late. Despite, or perhaps, because of this, it has been found that there is a “concerning gap” in knowledge among merchants. Particularly in the payment-making processes and partnerships.
According to VP of partnerships at payment processing platform Nucleus365, Anjulie Patel, there is confusion among merchants who are not familiar with payment-making, this creates a “blind spot” that negatively impacts the process that allows their businesses to function.
In this article, Patel explains how partnerships in the payments sector have revolutionized the e-commerce landscape, providing some much needed insight for merchants who are eager to learn to “navigate the world of secure and successful sales.”
In the payments industry, partnerships have always been a driving factor. According to PWC, 86% of industry professionals agree that as far as innovation goes, traditional payment providers will collaborate with technology providers and FinTechs.
Recently, business-to-business (B2B) has received increased “focus”, due to the projected transaction value of e-commerce being $6.03 trillion in 2023. This rise of digital e-commerce is not projected to stop anytime soon, according to 89% of industry experts.
However, while industry professionals are well-versed in the payment-making processes and partnerships, this knowledge does not extend to merchants.
When merchants don’t understand these processes, it can negatively impact business growth, competitiveness in the market and severely stunt opportunities for reduced risk and increased profits.
When two businesses partner up, typically one business brings the technology to the table, and the other the customer base and “channels”. These partnerships are dependent on factors such as products, market size, demographics, and market size. The length of the partnership can be fixed or flexible.
A clear benefit of these partnerships is the increased reach and exposure. They are meant to expand the size and availability of customer base without a limit whether it be domestic markets or already established markets.
According to Patel, these partnerships are even more effective in markets primed for growth – as an example, the UAE has a projected e-commerce value of $17.2 billion by 2027, and it’s seen an increase in merchant exploration.
Entering new markets allows for an increased flow of data, such as performance history and experience to help inform business decisions. Partnerships also allow businesses to enter the markets in a faster way rather than having to do it all from the ground up.
One of the overlooked benefits of partnerships is information-sharing between companies; by treating partnerships as collaborative learning experiences, businesses have access to insights and “generate new ideas, streamline operations for efficiency, and position themselves for more strategized growth trajectories.”
Patel adds that partnerships are expected to become increasingly common. Especially as the e-commerce sector continues to gain momentum into new, emerging markets.
As partnerships continue to be forged, merchants have more access to previously untapped markets, which, when understood and used right, can greatly benefit businesses. It is important to remain in the know and use any available tools to stay relevant in the market.