Payment Processors Become One-Stop Financial Platforms for Merchants

As the global economy continues toward digital transformation, payment processors are quietly orchestrating their own revolution behind the scenes.

The movement is spilling out onto the main stage. 

“We’re seeing a shift where businesses are now looking for a payment processor that is more inclusive of a product stack, so a one-stop shop for everything,” Justin Downey, vice president of product at Maverick Payments, told PYMNTS for the April edition of “What’s Next in Payments Series: The Changing Service Economy.”

Once known as the utility provider of commerce, consistently pushing payments from one account to another, payment processing companies are now emerging as powerful platforms, reshaping how businesses interact with money, data and their own customers.

“Used to be 10-plus years ago you would go to a payment processor and they’d just be processing your payments,” Downey said. “And then separately, if you’re a business, you would go to a point-of-sale company for your point-of-sale, a payment gateway if you’re doing eCommerce, a chargeback and fraud company and then a bank and possibly other service providers as well.” 

But that fragmentation meant more contracts, more integration headaches, and, notably, more billing relationships, which can be a friction point for any business aiming to keep operations lean and experiences smooth.

The shift toward the consolidation of value-added services by payment processors is being driven by both market demand and competitive necessity.

The Innovation Leap From Commoditized Processing to Platform Play

What was once the sole province of traditional credit card networks — data analytics, loyalty rewards, advanced fraud prevention and more — has become part of the toolkit for payment processors. The stakes are enormous, not just for the processors themselves, but for merchants, financial institutions and the consumers, whose expectations continue to rise.

“Payment processors are looking for services that are adjacent to payments. That could be advanced fraud prevention, network tokens, real-time account updater, other tools that can increase the acceptance rate while reducing fraud,” Downey said.

He highlighted the quest for a “frictionless checkout experience” — the new gold standard for merchants and consumers alike, as “something that truly makes it easy for customers to submit payments,” he added.

The future Downey envisions, and the picture of the present he has painted, is neither purely competitive nor fully collaborative. It’s both. Processors will need to be architects — building unique, defensible intellectual property at their core — as well as curators, integrating complementary services to offer breadth and agility.

The platformization trend means processors are stretching beyond payments into tangentially related domains — sometimes encroaching on territory once exclusive to FinTechs or even banks.

“Payment processors are expanding into areas that are close to payments, but not exactly payments, like financial services, alternative payment methods, embedded finance,” Downey said.

“Processors are in this unique position where, generally, they have a very strong distribution network, and they’re expanding into new product offerings that they can offer to their businesses, all as a one-stop shop. That’s a win-win for everybody,” he added.

Read also: Payments Modernization Starts and Ends With Customer Preferences

Customer Experience: The New Loyalty Engine

For all the talk of technical architecture, the end game of value-added services across the payments ecosystem is still driving a stickier and more seamless user experience. Merchants want a seamless checkout process; consumers seek speed, flexibility and security. It’s no longer enough to offer card payments and call it a day.

“You ultimately want to cater to the customer. What are their preferences? Customers today are looking for more flexible ways to pay. That could be additional payment methods, right? Traditional card, but also digital wallets, buy now, pay later and bank transactions,” Downey said.

But choice is just one axis. The checkout process itself must be frictionless, or merchants risk losing sales to abandonment — a costly, often invisible leak in the sales funnel.

“The customer shouldn’t leave the experience feeling frustrated,” he said, noting that merchants (and their processors) increasingly use abandonment rate as a critical metric: “How many are actually succeeding all the way through, and how many are abandoning before that point?”

The onus isn’t just on processors to innovate, but also to educate. As options proliferate, merchants look to their payments partners not only for functionality but also for guidance.

“Ultimately, Maverick Payments’ own position is that we’ve built a technology platform that our ISO, ISV and FI partners can leverage,” Downey said. “It allows them to keep control over the payment experience while leveraging our technology and infrastructure to go market faster with less burden,  ]and it ensures they get what they need out of their payment processor.” 

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