‘Payments’ is not about moving money. It’s all about solving problems
Have you ever been in the unenviable position of having to compose a RFP (Request for Proposal) for a payments service provider? If you’re in a role whereby you are charged with evaluating payment service providers, think about one of the most basic laws of sound product management. In my experience with high growth technology companies, the elite product managers separate themselves with one basic trait: put simply, it’s their ability to think before they build. They think hard about what problems they’re trying to solve. They think hard about whether they’ve properly identified the root cause or are merely addressing a symptom. They think hard about who is suffering from the problem. They think hard about how well and for how long each proposed solution can solve that problem. They think hard about what the usability and business tradeoffs are to each possible solution. And they think about how to measure the effectiveness of each solution. It sounds obvious, but it’s one of the most frequently overlooked requirements to properly evaluating a payments service provider.
The reason is simple. We are inherently wired as consumers. We typically shop for products or services that are “off the shelf”, because we believe we know what solution we need, rather than thinking about the problem deeply and considering alternative solutions. By articulating the problem rather than the solution, you’re enabling yourself and your organization to consider solutions that you wouldn’t otherwise have thought about. It also helps you determine which providers are solution-oriented and credible domain experts versus which providers are “one-trick ponies” selling a commodity product at the cheapest price.
That said, shopping for a solution rather than a product can make the evaluation process less clean. As opposed to evaluating pure product vendors in an apples-to-apples matrix, there are more inexact comparisons when it comes to scanning solution providers. But it’s all the more reason why it’s incumbent upon you to be very clear about what you are attempting to solve and to be very open-minded about the possible solutions. You may end up being pleasantly surprised.
But payments are a unique animal, as most anyone can attest. Every country is different, every user is different, and every user can behave differently on any given day. The most common questions to supporting global payments for your business are: How do I cast the widest net globally to capture the most users? How do I gain the most efficiency by minimizing the number of integrations and providers I have to work with? How do I streamline our workflow across all these payment types and geographies? How do I de-risk my business from an overdependence on any single payment type? And how do I achieve all this without compromising payment choices for my users?
There are multiple layers to consider when evaluating payment service providers, so be sure not to try to tackle every layer at once. As you peel layers off the global payments problem, consider the following evaluation tree to ensure that you remain focused on the problem you’re solving and not the solution you’re shopping for.
→ Geographic: where are your buyers and sellers, or more literally, who do you need to collect payment from and who do you need to pay? How do ensure you are compliant from a regulatory standpoint in each jurisdiction?
→ Demographic: within each geography, what is the demographic makeup? What is the ratio of banked vs unbanked? Is it a cash society or electronic payments? Does your user base skew toward an older, traditional group or a younger, tech savvy group of early adopters?
→ Personal: how do you ensure that every user can still behave according to his/her personal preference? Even if they are heavily banked, how do provide users with multiple payment choices that doesn’t mandate them to have or disclose their personal bank account data or credit card number?
→ Situational: personal preferences are not static. We like to have flexibility based on our current situation. How do you give your users options to support a one-time need that is atypical of their normal pattern? How do you help users with urgent payment needs they may have on occasion?
Payments yields some of the most complex business problems. There are no single “off the shelf products” to solve these problems holistically. The challenging art is how to package all the viable products and optimize their utility into a simple effective solution.