By Michele Shepard, Chief Commercial Officer, Paya Inc.
In just about any business you can name, there are generalists and specialists. Generalists typically have broad knowledge and offer a range of services that appeal to many different customers. Specialists, however, are more deeply invested in specific areas and offer services that are important to a narrower set of customers. In other words, generalists use a horizontal market approach, while specialists focus on vertical markets. In the realm of digital integrated payment solutions, these differences can be quite significant.
One of the key differences between horizontal and vertical digital payment solutions is domain expertise. A horizontal payment solution can offer a lot of breadth but typically little depth, unlike a vertically oriented payments partner. Vertical payment partners not only have cultivated a thorough understanding of the industries they serve, but they also can offer capabilities and specialized solutions that customers in those industries need and value. Domain expertise and innovative technology are a powerful combination in creating the best solutions for end users.
As demand for digital payment options continues to grow, working with a partner who understands B2B industries’ specific needs—and who applies that knowledge to deliver innovative solutions—will become critical.
Benefits of working with a specialist
Vertical-specific domain expertise is only the beginning. Other advantages to partnering with a specialist include:
- Effective integration. Organizations seeking digital payment solutions have options. From traditional banks to fintech startups, the field of payment providers is crowded. But efficient solutions are not the same as effective, integrated ones. What works for one industry often does not work for another, especially when it comes to integrated payments. Many horizontal providers do not offer specialized, flexible options that adequately support the software provider’s needs. An integrated payments solutions provider that focuses on specific vertical markets can tailor a more effective, purpose-built solution than a horizontal payments provider. Experience and knowledge of the nuances in a vertical industry pay off in better payment experiences, whether those occur in a consumer or B2B setting.
- Supply-chain support. Organizations in all industries learned quickly during the COVID-19 pandemic that strong supply chains are essential to maintaining operations and revenue flow. The pandemic accelerated consumer payment behavior trends and made digital payments a necessity for businesses. Integrated payment solutions built expressly for businesses in a vertical industry can remove friction and stress from supply-chain transactions by improving the payment experience.
- Strategic growth facilitation. Software providers within verticals tend to merge with and acquire other organizations in the same vertical, for good reasons. Combining companies within a vertical can create economies of scale, improve service to existing customers, and deliver products and services to new customers in the sector. Payment solutions that can be easily integrated with existing platforms can support strategic growth objectives and make combining complementary entities’ payments capabilities faster and easier.
- Customer experience enhancement. In an era where an e-commerce transaction or in-person payment experience can mean the difference between winning new customers and losing others who aren’t shy about abandoning shopping carts or giving negative reviews, businesses are focusing more than ever on customer experience. A vertical market specialist in integrated payments is a strong partner as businesses endeavor to delight the customer.
- Sales, marketing, and customer support. Where horizontal payment solution providers typically offer out-of-the box, one-size-fits-all solutions with limited to no value-added services, vertical solution providers often take the opposite approach, forming true partnerships. For example, at Paya, our experts serve as an extension of your team. During the sales cycle, we bring payment expertise to the discussion, and speak to the unique challenges faced by the vertical. We partner with your marketing and client services teams to promote adoption of digital payments—increasing the value you deliver and the satisfaction of your clients. We provide direct partnership support to your organization and customer service to your clients who are accepting payments—services that are essentially non-existent with the large, horizontal payment providers.
- A leading business management software solution provider in the wellness space partnered with Paya to power integrated payment acceptance, enabling the software partner to focus on its core business. As a result of Paya handling full-service support from sales, risk and underwriting, merchant onboarding, customer care, and retention, the partner experienced 88% growth in active payments customers, a 150% increase in annual processing activity, and a 52% increase in new customer onboarding—all within a two-year period.
- The second-largest provider of donor management and fundraising software partnered with Paya to provide managed payment facilitation. Under this model, the partner was able to onboard new clients for payment acceptance in minutes rather than days, while Paya took on all the heavy lifting, including merchant risk, liability, and underwriting.
- A leading global software provider of software for self-storage facilities partnered with Paya to expand its US customer base. In the first six months, 80% of their merchant referrals were onboarded, and with Paya as its preferred partner for integrated payments, the company’s sales close rate grew to 90%.
Almost 75% of consumers have a clear preference of making and receiving payments through digital means, according the 2022 Future of Payments Survey. And 65% see digital payments as more secure than traditional forms of payment, such as cash, check, or money order. Interestingly, 46% of survey respondents said they own or plan to own cryptocurrencies in the next 12 months. The trends all point to more consumers using digital payment options as well as seeking new ways to purchase goods and services.
History is littered with examples of businesses that failed to recognize market dynamics and adapt to changes. For many, their critical mistake was not keeping up with their customers’ evolving needs. In the digital age, software providers also sometimes fail. When they do, it’s often because of a lack of relevant knowledge of the customer, or the technology itself does not accommodate changing needs. A strong ally is a vertically oriented digital payments partner whose focus starts with serving the needs of software users.
If you’d like to learn more about how Paya’s vertical domain expertise and payment solutions can benefit your business, please connect with us and speak with one of our experts.