Financial Institutions find value in merchant services partnership: Q&A with Kelly Beatty
Not only are the world’s leading payment companies striving to meet the needs of consumers, banks and financial institutions are too. Banking – as is the case with many other markets – is a highly competitive industry, and a bank or financial institution’s ability to provide unparalleled service and value to its customers can separate the leaders from the pack. As we look ahead to 2017, one of these key value drivers will be merchant services.
We sat down with Kelly Beatty, SVP and general manager of merchant solutions for financial institutions at Vantiv, to discuss how financial institutions can offer this value by partnering with a leading payments processor for its merchant services needs.
Q: What are merchant services for financial institutions? What falls into that category?
At its core, merchant services for financial institutions are a suite of products and services that enable payments for the bank’s merchant customers. However, in reality, merchant services is much more than simply enabling payments – it is a value proposition that encompasses many extended payments-related resources and capabilities, such as security solutions and data insights, as well as gift and prepaid programs.
Q: Why should financial institutions offer merchant services?
For starters, to enable payment acceptance. But, more importantly, merchant services enables financial institutions to offer added value, which helps them drive revenue and growth organically, as well as attract new accounts through superior offerings. Value is the key word here. In short, we’ve seen that merchant services help create loyalty with the bank’s partners and promotes the retention of business – if a bank is constantly adding more value, customers tend to want to stay with them, especially in today’s payments environment.
Q: What’s the impact that merchant services can have on a financial institution’s bottom line?
Leading payments processors are continuing to invest in best-in-class payments technology and product solutions that can help financial institutions set themselves apart in the competitive marketplace. Furthermore banks put trust in (and partner with) payments processors with a proven track record of selling through strong distribution channels. Why? Because payments processors know merchants – they know how to sell to them and, more importantly, they know how to service them.
Q: Are merchant services only a viable option for larger banks? Or can small banks benefit as well?
Definitely both. Smaller banks often choose to partner with a leading payments processor because it affords them the ability to compete with larger banks. Equipped with industry-leading products and solutions, merchant services allow banks to bring a new value proposition to the bargaining table and compete for business and partnerships that it might not previously have been able to. It also affords them the ability to consider expansion, which is often a part of these smaller banks strategies.
Q: What makes merchant services compelling for banks who partner with a large number of SMBs?
What we’ve found is that smaller merchants aren’t always familiar with payments processors, and are unaware of the breadth and depth of solutions they provide. While they know what payments processors “do” at a basic level, smaller merchants’ familiarity, brand recognition and trust lies with their bank partner – not a payments processor. Merchant services allows banks to leverage that trusted relationship by offering branded products and services which, in actuality, are white label solutions from an experienced payments processor. So, while the smaller merchant associates that relationship with a trusted bank partner, the banks get the peace of mind and assurance that their offerings and support structures are up-to-date and industry-leading.
Q: Can you provide a quick overview of how customer support works?
Well, for most bank partners, support is offered by the payments processor and is one of the key aspects of merchant services. If a bank or merchant has questions or concerns, the payments processor is able to provide the needed customer support, which is branded as the bank.
Q: Heading into 2017, what is the outlook of merchant services for financial institutions?
Today, most banks are offering a merchant services program because they understand the value of payments. This value can come in the form of data or customer retention benefits. The good news is that the industry is at a place where banks understand this value already – and it’s why the bank’s relationship with its payments processor is so important.
In 2017, we expect that merchant services will continue to offer solutions up the value chain – and that means keeping up with new payments technology and changes in the industry. With a strong relationship and the evolution of payments technology, banks will strive to offer the latest and greatest in payments in the simplest and safest way possible for merchants – by partnering with a payments processor for their merchant services needs.
Learn more about our merchant services for financial institutions.