In my previous article, I explored the evolution of Point of Sale (POS) and Buy Now, Pay Later (BNPL) services, focusing on how these options influence customer choice. That discussion was from the customer's perspective. Now, let’s look at it from the viewpoint of businesses, specifically merchants.

This article will explore what’s most important for merchants when they integrate financial solutions like POS and BNPL. We’ll look at how these solutions enhance the customer experience and boost sales.

Both POS and BNPL services operate in a B2B2C (Business-to-Business-to-Consumer) model, where merchants play a key role in connecting the service provider with the end customer. In this model, merchants are not just the middlemen — they are vital to attracting customers and increasing sales. By offering flexible payment options, merchants create a smoother purchasing experience, which in turn increases customer satisfaction and conversion rates.

From a technical perspective, the better the integration between financial services and merchants, the more appealing the product becomes to customers. This includes not just competitive terms, but also the speed of processing, ease of use, and how quickly issues are resolved.

The success of POS and BNPL services depends not only on how appealing they are to customers, but also on the willingness of merchants to adopt and integrate them. Without strong partnerships with merchants, these services wouldn’t reach their full potential. So, what exactly matters most to merchants when considering these financial solutions?

Flexibility and Customization

Square is a great example of a company that offers flexibility and customization to merchants. Square provides a range of payment solutions that can be tailored to fit the needs of businesses of all sizes. For instance, Square’s point-of-sale system is modular, allowing merchants to choose and pay for only the features they need. This flexibility extends to their financing options, where merchants can offer different payment plans to customers based on their preferences. Square’s ability to adapt to the specific needs of a business—whether it's a small café or a large retail chain—has made it a popular choice for merchants looking for customizable solutions.

On the other hand, Oracle’s legacy POS systems have been criticized for their lack of customization options. Many merchants found that the system couldn’t be easily adapted to their specific business processes, leading to frustration and even abandonment of the platform. When systems are too rigid, they can prevent merchants from optimizing their operations, which ultimately affects both their business and customer satisfaction.

Merchant and Customer Support

A good example of strong merchant and customer support comes from Shopify. Shopify has built its reputation not only on its eCommerce platform but also on the extensive support it provides to its merchants. Shopify offers 24/7 customer support through various channels such as chat, email, and phone. They also provide comprehensive online resources, including tutorials and webinars, to help merchants fully utilize their platform. This type of support reassures merchants that they can resolve issues quickly, reducing downtime and ensuring that their businesses run smoothly.

On the flip side, eBay faced criticism for its slow and ineffective customer support in the past. Sellers on the platform complained about long wait times and unhelpful responses, which led some merchants to switch to other platforms like Etsy or Amazon. This example illustrates how poor support can lead to a loss of merchant confidence and ultimately, business.

Klarna, a leading BNPL provider, is an excellent example of a company offering competitive terms to merchants. Klarna charges merchants a fee per transaction, but these fees are often offset by the increase in sales that Klarna helps generate. Klarna's flexibility in structuring merchant fees based on volume or other business-specific factors has helped them win over large retail clients like H&M and ASOS. These competitive terms are appealing to merchants because they see a clear return on investment through increased sales and customer retention.

In contrast, PayPal has been criticized by some merchants for its high fees, especially for international transactions. This has led some businesses to limit their use of PayPal or seek alternatives like Stripe or Square, which offer more favorable terms depending on transaction types and volumes.

Speed and Ease of Integration

Stripe is often cited as one of the best examples of a payment processor that offers fast and easy integration. Stripe’s APIs are developer-friendly, and their documentation is comprehensive, making it easy for businesses to integrate payment processing quickly. The simplicity and speed of integration have attracted major clients like Lyft and Slack, allowing these companies to focus on their core business operations without getting bogged down by complex payment integrations. This fast setup enables businesses to offer Stripe’s services to their customers without delays, preventing any potential sales loss.

On the other hand, SAP’s complex ERP solutions have been known for their lengthy and resource-intensive integration processes. Many businesses, especially smaller ones, have struggled with the time and cost of integrating SAP systems, which can take months or even years to fully implement. This example highlights how a slow or complex integration can deter merchants from adopting a solution, even if it offers other benefits.

Ongoing Merchant Support

A great example of ongoing merchant support comes from Amazon Web Services (AWS). AWS provides extensive resources to its clients even after initial setup, offering regular updates, analytics tools, and personalized account management to ensure merchants are maximizing the platform’s potential. AWS also hosts events, webinars, and workshops to educate users on new features and best practices. This constant engagement helps merchants grow and adapt, fostering long-term loyalty and improving the merchant's overall experience.

In contrast, Facebook has struggled with ongoing support for small and medium-sized businesses (SMBs) using its ad platform. Many SMBs have complained about a lack of communication and support after their ads were flagged or accounts were suspended, often without clear explanations or resolutions. This lack of ongoing support has driven some businesses to other platforms like Google Ads, which provides more proactive assistance and account management services.

These real-world examples illustrate the importance of flexibility, support, competitive terms, fast integration, and ongoing assistance in maintaining successful merchant partnerships. Companies that excel in these areas, such as Square, Shopify, Klarna, Stripe, and AWS, foster long-term merchant relationships, driving mutual growth. In contrast, companies like Oracle, eBay, PayPal, SAP, and Facebook have lost merchants due to a lack of customization, poor support, high fees, slow integration, or inadequate follow-up assistance.

In a future article, I’ll dive deeper into the technical aspects of integration, exploring how a seamless connection between merchants and financial services can drive further growth.