As banks focus on improving digital experiences, there’s a key area that typically does not get as much attention: point-of-sale device management. Perhaps surprisingly, payment devices are contributing to low retention for banks that serve as merchant acquirers. Many traditional banks send merchants back in time when they want to price and manage the PIN entry devices (PEDs) they use to process transactions - back to when Cheers (and broadcast TV) ruled the entertainment world, and B2B digital experiences offered little more than PDF-based statements.

It’s time for banks that act as a merchant acquirer to empower customers with a modern user experience. Even more crucially, potential customers expect modern and flexible pricing options when they choose a merchant acquirer. Too often, small businesses choose a fintech over their bank, and device management contributes to that decision. 

Keeping and attracting merchants

Traditional banks want to beat fintechs in the battle to attract customers, including merchants. Banks that act as merchant acquirers see themselves in an especially precarious position in many countries, especially with small merchants. In the US, for example, just 38% of small businesses use a legacy merchant acquirer, opting for fintechs that offer a better user experience, including an improved digital workflow and enticing discounts.

Is it too late for traditional banks to stop the loss of customers? No. Banks that elevate the business banking experience have an excellent opportunity to boost merchant loyalty and win back customers. But most device management digital experiences need frontend and backend modernization. A digital facelift – simply making the experience look better – isn’t enough. Modernization requires:

• Easy product selection: Merchants should be able to explore devices, onboard, and manage their orders with capabilities similar to what consumers get from top digital commerce brands. Today, many banks offer a disconnected device selection and order experience.
• Device management and visibility: Merchants must be able to explore the status of their devices and the related billing in real-time or near real-time. Yet, it’s common for merchants to wait for monthly statements and contact customer support to address even simple questions.
• CRM integration: Customer support agents need to see all the information related to a merchant’s account easily. Now, many banks force agents to juggle data from disconnected systems to answer questions and resolve issues.
• Product and promotion agility: Business users should be able to manage device products within a centralized catalog that empowers them to create promotions and discounts without assistance from IT. At many banks, it takes days or weeks to create device-related promotions.

Bank takes action to retain merchants

A bank in South America recently noted a troubling trend. It was losing larger accounts to fintech merchant acquirers. Many very small merchants in its market had already shifted away from legacy merchant acquirers like the bank. Those tiny merchants preferred the simplicity offered by fintechs to merchants with low transaction volumes, even if the terms and fees were less favorable after a discounted introductory period. Now, the bank was losing merchants with multiple devices and comparatively higher per-device transaction volume. It was determined to stop the loss and win back merchants.

Leaders at the bank looked at the experience it provided merchants and found point-of-sale devices, especially PEDs, were a significant friction point. Specifically, the way merchants accessed, managed, and selected devices needed a significant upgrade. Years before, the bank developed a digital device portal. The portal showed its age, with merchants unable to manage billing for devices or see their current status. And when merchants ordered a device, they encountered outdated shopping cart and shipping management capabilities.

Business users at the bank were frustrated, too. They saw merchants leaving because of discounts and promotions – but they couldn’t create offers to match. For instance, they wanted to offer limited-time volume discounts and promotions for upgrading to newer devices. But setting up promotions took far too long. So, the bank looked to where it needed to modernize and update to be competitive.

From falling behind to leaping ahead

The bank decided to modernize device management. At first, it explored developing an in-house solution. But leaders soon realized that creating a modern frontend and backend would take a year or more. They also viewed the estimated costs as too high. Instead, they researched other options, eventually choosing one from Amdocs that streamlined modernization.

With an implementation schedule to take the bank from setup to go-live in under six months, the cloud-based solution will elevate the merchant and business user experience quickly. Plus, the solution supports more discounting and promotion agility than the bank considered building on its own, giving the bank’s sales and marketing team the power to leap ahead of the competition instead of merely keeping up.

A new experience will greet merchants: they log in to manage their devices and see up-to-date billing status, and they’ll no longer wait for statements. More visibility into current devices makes it easier to understand billing, reducing calls and emails to customer service. When merchants contact customer service, agents will have the power to resolve issues quickly, thanks to CRM integration. Discounts attract new merchants – and win back former customers. New merchants onboard easily and find the devices best suited to their business quickly.

What device experience does your bank offer?

As other legacy banks look to remain competitive with merchants and win out over fintechs, they must look to modernization and working with the right partners to achieve this quickly and efficiently.

Zur Yahalom is SVP and Head of Financial Services at Amdocs, a leading software and services provider unlocking customers’ innovative potential across the communications, media and financial services industries. Click here for more financial services insights.