The merchant processing industry has become increasingly competitive with surges in digitization over the last ten years. Customers now make purchases from smartphones, laptops, social media, or in person. Cash payments for the latter are declining due to the rise of digital wallets and Covid behavioral changes. One thing is for sure, as digital transactions increase, businesses of all shapes and sizes have access to more customer data than ever.
How can companies weaponize their data to improve their market share? In a world where businesses suffer from inflation and labor shortages that are cutting into their margins, one of the answers is implementing AI-driven technologies.
According to an article by Harvard Business Review, “The question is no longer if a company should use AI – but where it brings the greatest competitive advantage.”
The critical need for businesses to become data-driven is why we are announcing a strategic alliance between Red Rook Payment Solutions (RRPS) and Standard Insights, an AI as a Service analytics and marketing platform. This partnership ensures that current and future clients of RRPS get the best customer service with the best pricing and have access to a world-class technology platform to help one drive growth for their business.
The Merchant Processing Industry Today
Forming strategic alliances with Independent Software Vendors (ISVs) can be a critical growth factor for those in the merchant industry. Examples include First Data (now Fiserv) purchase of Clover and US Bank’s acquisition of Talech.
According to a McKinsey study, small-medium businesses (SMBs) that process up to $100 million per year will be spending close to $100 billion in payment services by 2025. These payment services can include POS platforms, loyalty programs, and analytics – all serving to improve a business’ bottom line. As the cost of cloud computing has gone down and the rise of API integrations, it’s easier to integrate payment gateways with software solutions that can enhance growth for merchants.
The Merchant Processing Industry Of Tomorrow
AI provides the ability for a computer to think and act like a human.
Most POS platforms are cloud-based and can provide business owners with treasure troves of customer and product data that they can leverage. However, current analytics tools are lacking, using only Business Intelligence (BI), which only provides a historical perspective of what happened in the past.
AI’s power lies in making predictions: pattern recognition, recommendations, personalization, and forecasting. AI empowers your business to know your customers better than they know themselves, which helps with improving customer experience, preventing customer indecision, and telling your customer what to do next. By implementing a truly data-driven approach, your business can improve sales, increase average order value, and reduce customer churn.
With the democratization of AI, many small to mid-size businesses can take advantage of the powers only available to the Fortune 100. Typical uses cases for your business to drive top and bottom-line growth can include:
- Recognizing the potential profitability of each of your customers
- Recommending what products each of your customers is likely to purchase
- Forecasting how much of a product will sell in a given day, week, or month
AI tools come in many shapes and sizes, such as ordering and marketing platforms or even robots. Rest assured that investments in these platforms are lower than the cost of labor, which can help mitigate your company’s most significant expense.
Competition is tough in every vertical, including merchant processing. Business owners are constantly looking for ways to lower costs while driving revenue. AI-driven technologies help build your company’s moat. Take ownership of your data so that your competitors can’t touch you.
For more information on how RRPS can help you save on your merchant processing fees or how you can leverage your data to gain a competitive advantage, reach out to Sean McNabb at sean.mcnabb@theredrook.com.