Fintech payments solutions offer new challenge.
By Michael Scheibach
Generating revenue, improving product offerings, streamlining operations and better serving customers are among the top priorities for financial institutions in 2017. They also are the priorities for small businesses, especially retailers, who constantly look for ways to reduce costs, better serve their customers and increase revenues. Many retailers, in fact, are now part of the Merchants Payments Coalition — representing nearly 3 million stores — whose mission is to reduce credit card fees and create “a more transparent system that works better for consumers and merchants.”
Needless to say, banks must confront this changing payments landscape or risk losing their retail customers to fintech startups. In a report released last year, “Banks, Retailers and Fintech: Reimaging Payments Relationships,” the authors point out that fintech companies “sense an opportunity” in payments and are “muscling in” on banks’ traditional turf. “Banks cannot afford to be complacent,” reads the report. “Changes sweeping the industry suggest that there is a lot more disruption ahead, with potentially much more significant impact on banks.”
An even greater threat than payments processing, however, may be the weakening of the overall business relationship with a retail customer — an area of strength for banks. In other words, fintech payments solutions often have expanded capabilities that strengthen the fintech’s connection with its customers.
An example of a fintech company offering more than a simple payments solution is Fattmerchant (www.fattmerchant.com), a subscription-based merchant processing company. Its solution also includes one-time and recurring online payments, invoicing capabilities, a reporting dashboard with analytics, a mobile app, technical support, customized reports and more.
Although Fattmerchant has focused primarily on retailers, professional services and ecommerce companies, it also knows the importance of working with banks because of their longstanding small-business customer base. To do this, the company recently introduced a white-label Partner Program for banks and credit unions that is fully customizable according to the financial institution’s brand standards. A financial institution that becomes a partner has access to tools and resources for marketing, customer service, technical support and account management. Plus, the program allows institutions to analyze merchant processing savings for clients and helps clients switch processors, all while the institution earns money.
CEO Suneera Madhani emphasizes that one of the biggest benefits of the program for financial institutions is the ability to partner with a merchant services provider with no markups. Financial institutions have traditionally worked with standard processors cutting into their customers’ bottom lines, says Madhani. Now they are able to recommend a company that works for the mutual benefit of both the merchant and the institution.
“Customers of financial institutions enrolled in our Partner Program have access to a network of available resources and transparent pricing to help them succeed,” said Madhani. “The program provides updated technology such as a detailed analytics dashboard and tools, as well as a fully integrated virtual terminal. By using Fattmerchant, merchants are offered major savings through no markups and no contract. Merchants also have the added benefit of working with both their bank and the Fattmerchant team to find ways to save, essentially expanding their financial support system.”
Although the Partner Program is new, Madhani said the early response has been positive, with small to medium-sized financial institutions seeing the greatest return. One such institution is Axiom Bank in Orlando, Fla. According to Daniel Davis, president and CEO, the bank and Fattmerchant are working together to provide customers with affordable merchant processing, and to ensure that customers are improving their return each month and reducing unnecessary spending on exorbitant bills.
“Small-business owners are seeking convenience, clarity and trustworthy services,” said Davis, “and that’s what they’ll find with this partnership.”
Michael Scheibach is executive editor of BankNews.