First Data is a leading provider in electronic payment processing, with more than 26,000 employees worldwide and a client base of more than 5.3 million brick and mortar merchants. In addition, the company supports more than 600,000 online merchants, streamlining payment capabilities from the point of sale all the way through processing and product acquisition.
What differentiates First Data’s services from others in the payment processing industry is the breadth and depth of its services. By helping its clients expand their payment acceptance capabilities, whether credit, debit, or alternative payment methods; securing that information online; and transporting those transactions through the point of sale, the company helps merchants attract and retain customers while helping them grow domestically and internationally.
With a merchant base that ranges from the smallest mom-and-pop shops all the way to large companies conducting global business, the fact that First Data has the ability to grow and become a partner with its clients rather than act as a vendor provides it with another competitive advantage.
“We bring years of experience in payment processing and the industry’s broadest portfolio to help a merchant optimize existing processes, go into new payment channels, and better integrate payment across multiple channels, be it brick and mortar or e-commerce,” said Souheil Badran, senior vice president and division manager of e-commerce.
“That expertise also helps us help merchants with their payment process,” he continued. “We can process the funds while reducing fraud, increasing revenue and customer satisfaction, and reducing transaction costs.”
First Data processes more than 50% of the credit and debit card transactions in the market today. As a result, the company has its finger on the pulse of where the industry is going and has a clear view of market trends. The company has taken a three-fold approach to leverage its knowledge, working with the right partners and payment providers and innovating internally to address market needs.
One piece of the strategy is simply listening to the voice of the customer and working with First Data’s advisory committee to see if the company is heading in the direction it needs to be. Badran said First Data also works with analysts and media professionals to ensure it sees industry trends from all sides.
“Analysts and media professionals have full visibility into the world of retail and e-commerce,” he said. “With their insights, we can look at those trends from a market and economic standpoint to analyze how consumer spending trends have changed.”
A well-rounded viewpoint also ensures First Data’s understanding of market trends will help it set the right direction and ensure cycle time isn’t being wasted as new developments are being made. Last year, First Data invested close to $50 million in new e-commerce developments. One of the results is a platform called the Compass solution, which allows larger merchants to process payments in a way that cuts costs and reduces redundancies.
“The platform leverages a merchant’s ability to send First Data a variety of payments in a single transaction to cut down on processing costs and improve efficiency from a reporting standpoint,” said Badran. The company has extended the original Compass platform to allow for international reporting, further enhancing its ability to consolidate and simplify merchants’ back-end payment processes.
First Data has also innovated the consumer-facing payment gateways. Now, when consumer enters his or her credit card information, that information integrates into the merchant’s existing back-end environment, removing the need to create a standalone gateway and improving fraud protection.
“This solution helps vendors from a PCI (payment card industry) compliance perspective,” said Badran. “Not only are we making sure that transaction works, we’re also making sure that merchants have the ability to manage consumer credit card information without having to focus as much on compliance issues.”
In addition, First Data works closely with leading providers such as Yahoo, handling merchant payments processed through the Yahoo site. This partnership ensures that as Yahoo’s merchants grow their e-commerce businesses, there will be no snags in the ability to accept payments of any type.
First Data strives to create a strong and relevant platform to intersect between what’s happening in merchants’ online and offline networks. This ability has become increasingly important, as same-store sales have gone down in the world of retail while the Web presence for merchants in general has gone up tremendously.
Although retailers are excited about the growing strength of e-commerce as a business, Badran said it’s behind the scenes expertise that will make or break the online platform.
“A lot of people shoponline, but they aren’t merchandising in brick and mortar stores,” he said. “The concept of e-commerce is great, but someone has to help merchants understand how to optimize the payment process to improve core funds; reduce fraud, charge expenses, and transaction costs; and to drive and deliver greater customer loyalty and insight.”
A smooth payment process can determine whether consumers are satisfied with their online shopping experience. With its expertise on this front, First Data contributes to the merchants’ customers’ satisfaction because it not only tightens up security, it also streamlines and strengthens the payment process as a whole.
“Retailers are looking to optimize, integrate, and expand their e-commerce channels,” said Badran. “Our payment approach and process enables them to get additional value in the form of reduced transaction expense and risk while increasing revenue and customer satisfaction.”
Moving forward, Badran sees continued growth for First Data, both in innovation and partnership: innovation in developing the right tools and services for merchants and executing on them and partnership in making sure those innovations are what its customers want and expect.
“We’ll continue to focus on scale while minimizing the risk, addressing the compliance associated with the payments, and improving insight into buyer behavior,” he said. “All of these elements contribute to merchant growth, so when that happens, First Data will grow as well.”