Corporates Shift Mindset Back to Growth

Inflation, inflation and inflation. The drum beat has defined the past year in the financial services business and reached a crescendo in the first quarter. But, according to payments orchestration solution provider Spreedly, which sees $50 billion in gross transaction volumes on its platform, a successful payments strategy can meet consumers where they are, as companies mull returning to growth mode.

As Spreedly President Peter Dougherty noted in a recent conversation with PYMNTS’ Karen Webster for the “What’s Next In Payments” series, the first quarter of ’24 brought varied developments across the financial sector. From a shaky IPO market to increasing interest rates and a surprisingly stable U.S. economy, businesses faced a complex landscape.

Spreedly’s position in the payments ecosystem offers a unique view of market trends and consumer behaviors.

Ready for Growth

“We have merchants on one side, platforms on the other, and all the other participants in the network,” Dougherty said, emphasizing the company’s comprehensive view.

That view has convinced him that for the firms that have weathered the storm and hyper-focused on margins, the mindset’s shifted a bit. What Dougherty said he’s hearing from client firms is that they’re looking beyond mere cost containment and are now getting into growth mode.

He gave an example where a Spreedly client remarked that the client’s firm had not “opened up” in a new country in a number of years — and now was tasked with thinking about new go-to-market strategies.

“What we’re really hearing is: ‘We’re getting back into growth mode,’” Dougherty said.

He believes this transition is supported by the operational excellence firms have had to cultivate over the past two years, much of which is a byproduct of navigating the pandemic and subsequent economic pressures.

Coordinating Payments for Optimization

Those pressures, he said, necessitate a new strategy for providing payment options and the ability to orchestrate them. In the post-pandemic, omnichannel, global world of commerce, Dougherty said, “success and failure happen in the fractions of a second” it takes to facilitate payment or approve it.

A 92% authorization rate versus a 93% authorization rate may not seem all that different, but that 1% rate can translate into hundreds of millions of dollars. Even premium brands can maintain their “premiumness” by offering payments optionality, Dougherty said.

“And it’s the difference between success or failure as a brand or a platform,” he told Webster.

Payments are now at the center of the customer experience. For seasoned companies seeking to expand their presence or new firms aiming to get their operations up and running, payments must be part of any core strategy (aided by providers such as Spreedly). And they need to think beyond the confines of the core card brands, while offering alternative and market-by-market locally-preferred payment methods.

The role of technology in facilitating this growth mindset cannot be overstated, according to Dougherty. He emphasized that Spreedly provides critical support to businesses looking to expand and optimize their operations.

“It’s about being prepared for the unknown of going back into these new things again,” said Dougherty, highlighting the importance of adapting to market changes.

Pivot, Pivot and Pivot Again

As Dougherty pointed out, adaptation is critical to keep pace with the speed and scale of banking changes. Just a few years ago, open banking was barely a concept, and now firms must contemplate how to embrace and use open banking payments.

To engender customer loyalty, Dougherty said, companies must meet customers where they are — providing payments optionality — while protecting their data and battling against fraudsters in the meantime.

In the inflationary reality in which we all live, merchants and platforms can pass on discounts tied to bank account transfers to incentivize consumers to choose those options rather than credit card payments.

In tackling all of this, he said, merchants don’t want to be tied to a single vendor. An independent payments orchestrator like Spreedly offers a broad range of providers with the openness of a payments platform to help build a “best-of-breed payment stack to win in these new markets” with APIs and the cloud, without having to endure the technical heavy lifting themselves.

As Dougherty told Webster, looking beyond the quarter that’s just ended, “the payments — and the payments performance — remain a key part of your value proposition as a brand or as a platform.”