A recent $30 billion settlement in the payments industry has significant implications for consumers, merchants, and payment service providers. Despite the large sum of money involved, the impact on the majority of small and medium-sized businesses (SMBs) in the injunctive relief class of US merchants is limited. The main beneficiaries are expected to be large enterprise merchants, who may see reduced interchange rates and gain more control over payment practices. Additionally, the removal of restrictions on merchants’ rights to organize buying groups could lead to collective bargaining power in the industry.
Payment service providers and acquirers will need to invest in R&D to support new options like dynamic surcharging at an individual merchant level. This development, along with increased transparency in overall costs of acceptance, could benefit providers that primarily serve SMBs with bundled pricing. However, consumers may face challenges as they navigate the growing complexity of payment options at checkout. They may also be impacted by potential surcharges for certain credit cards, as well as increased merchant choice to disable specific digital wallets.
The settlement also affects big tech companies like Apple and Google, who may no longer rely on universal acceptance of their digital wallets. As digital wallets become the leading form of payment, there is a push for more choice and optionality for both consumers and merchants. While this presents opportunities for payment optimization and orchestration, it also introduces challenges in adapting to a changing payments landscape. Data-driven and forward-thinking merchants are expected to thrive in this evolving environment.
Moving forward, the industry is urged to embrace testing, adaptation, and iteration as key components of a coherent payments strategy. The regulatory landscape now allows for increased flexibility and unbundling in payments, providing an opportunity for merchants of all sizes to take control of their destiny. Companies like Pagos are already offering real-time solutions and easy-to-consume data dashboards for merchants to navigate the evolving payments landscape. With the disruptive fintech ecosystem at play, the potential for continued innovation and growth in the industry is high. This ongoing evolution may be both challenging and exciting, but it ultimately signifies a new era in payments where agility and data-driven decision-making are essential.
