In an increasingly interconnected world, businesses and individuals need payment solutions that facilitate seamless transactions across diverse geographical locations. Global mass payments are emerging as a crucial tool for facilitating bulk payments around the world. In this article, we will delve into the concept of global mass payments, their safety, and how organizations can leverage […]
Embedding Payments for Competitive Advantage in Your Channel Tech Stack
As purpose-built and multi-function channel management tools evolve, end-to-end payment processes can be embedded to improve the partner experience.
Where Do Payments Fit in the Channel Automation Stack?
Channel automation needs have given rise to whole new categories of channel-specific software. From marketing automation tools adapted for the channel, Through-Channel Marketing Automation (TCMA), to CRM-like tools focused on managing partner relationships (PRM) the landscape has changed.
Forrester, among others, publishes an annual Channel Software Tech Stack with well over a hundred companies and growing. Forrester’s current taxonomy includes functional categories, notably adding Ecosystem Management in 2020 and expanding that category to include 36 companies in 2021:
- Channel Learning and Readiness (CLR)
- Through Channel Marketing Automation (TCMA)
- Channel Incentives Management (CIM)
- Partner Relationship Management (PRM)
- Channel Marketplaces, Finance, Pricing & Inventory
- Channel Data Management (CDM)
- Ecosystem Management
And while each of these offerings is presumably designed to provide its technology vendor users with tools to automate channel processes, improve partners’ user experience and (hopefully) accelerate manageable channel revenue growth, there is no industry-standard process for managing payments to partners, partner employees and customers. Each is left to consider how best to manage payments to and from partners, partners’ employees and partners’ customers in the context of how their specific niche fits in the channel automation architecture of their customers and prospects.
Managing incoming and outgoing payments globally has improved dramatically for many as more vendors competing in functional areas including CIM, TCMA and PRM have embedded digital wallet payments technology to streamline partner payments for channel use cases from MDF to partner rep incentives and partner rebates.
Creating Competitive Advantage for You and Your Customers
While many Channel Software vendors seek to plug payment functionality into their offerings on an as-needed basis, managing payments is an area where disruption opportunities are abundant.
Simplifying payment processes can be done across any/all of the functional categories. Leveraging new digital wallet capabilities can
- improve efficiencies
- lower costs
- reduce administrative and compliance burdens, it can also
- streamline global payments
- make it much easier for partners to do business with technology vendors
Perhaps more important to the software firms competing for channel automation budgets, the ability to incorporate simplified payments using these digital wallet capabilities and APIs can enable them to compete more aggressively across the channel software category.
With the proliferation of new business models including non-reseller models, from referrals to agents to influencers and beyond, the opportunities for faster scale and greater operational efficiencies abound, channel technology developers are often scrambling to adapt to new demands. Operationalizing a flow of monies (incoming and outflowing payments) often requires unique consideration specific to the strategic and relationship issues.
Using APIs that simplify and standardize how monies are exchanged between vendor and partners, irrespective of the use case, means that developers can focus on more strategic business requirements and specific use cases:
Partner organization incentives
Partner employee incentives
- Deal Registration
- Closed Deals
Or unique revenue-sharing models designed to process incoming customer revenue and allocate to multiple parties in a predetermined revenue-share model.
How to Get Started: Think Holistically
Consider the entire channel stack – top-to-bottom and the flow of monies end-to-end – what functions require an incoming or outgoing flow of monies between vendor and partners?
- How will the monies be received, managed and distributed amongst each of the stakeholders?
- How will we make sure that each stakeholder will have a ‘Portfolio View’ of their incoming and outgoing activity through a single lens?
- How will we enable incoming and outgoing flows in multiple currencies?
- What funding sources will need to be supported (ACH, wire transfer, credit card processing, cryptocurrency, etc.)?
- What payment options need to be supported (ACH, wire transfer, prepaid card, credit card, gift card, cryptocurrency, etc.)?
- How will we ensure compliance and tax reporting needs are met?
Providing a ‘Portfolio View’ to everyone involved, Company or Program Manager, Partner or Payee, is essential to ensure transparency. Linking the who, what, when, where and why enables each (you and your downstream customers and partners) to manage multiple objectives using a common process and embedded payments platform to manage all the entry points for sourcing incoming funds and all the endpoints for payments, irrespective of payment method.
Managing Embedded Payments
Embedding an end-to-end payment architecture within your platform provides a clear line-of-site to each stakeholder:
- It is easy to create and manage a series of Individual or Company digital wallets configured to align with the transactional workflows of each business relationship – Company or Program Manager, Partner or Payee.
- Digital wallets can be created for any purpose (program, event, transaction, etc.) as well as at any Partner level (single-tier, two-tier, etc.) creating a ‘Portfolio View’ for everyone involved
- Both remitters and beneficiaries benefit from much lower rates than a Company or Individual would receive externally via traditional methods.
- The digital wallets for each account can be organized based on currency, effectively provisioning all constituents – aggregators, companies and end-user recipients – with multi-currency capabilities. Thus, the payments architecture can handle currency FX within its managed processes at much lower rates.
Entry Points – Accept Funds from Any Source
By converging traditional card processing and bank transfer methods including ACH and wire transfer with a sophisticated, flexible digital wallet system, APIs enable ISVs and in-house developers to build external funding payments directly into nearly any business process.
Simply configure connected accounts on whose behalf incoming funds are to be received, designating acceptable payment sources. Then direct the flow of the incoming funds through digital wallets to the designated beneficiaries.
Eliminate Merchant Processing Fees
The payment platform aligns incoming and outgoing payments to simplify business processes, lower operating costs and provide transparency, flexibility, compliance and security to both payor and payee while removing the need for a separate merchant processing account.
Direct and Indirect Flows
The platform enables aggregators to create both direct and indirect flows by creating programs unique to each payment workflow to receive direct customer payments as well as pay beneficiaries directly.
Accepting funds directly from Customers on behalf of partners, paying suppliers or profit-sharing directly can be configured through Connected Accounts. Connected Accounts can be created via APIs, then Customers of Connected Accounts can be dynamically added as needed automatically and the KYC compliance tasks managed from within the payments platform without the need to hold-up fund transactions.
APIs can link newly acquired customer info to both a Company and the Partner’s (Connected Account) CRM tools. These can be configured to support a broad range of use cases from e-commerce to incentives. Aggregators can configure multiple workflows at the Program level to accommodate the specific payment workflows based on the unique business requirements and transactional nature of various relationship models including referral and reseller partners, franchisees, agents, ISVs, contractors and sub-contractors, fundraisers, etc.
End Points – Make Payments using Any Pay Methods
Providing multiple endpoint options within a singular payment platform enables you to serve your clients and partners with choices that are more attractive for your payees’ personal or business needs or they can be structured to be more aligned with your payment’s business purpose.
Business or regulatory issues may dictate the use of a specific option (e.g. ACH) which is managed via using XTRM DirectTM.
However, when choice is an option, we have found (and a recent study, The Mass Payment, confirms) a strong preference for Companies and Individuals to be paid in the manner they prefer; we call that XTRM ChoiceTM, providing the recipient with the ability to choose their preferred payment mechanism – ACH, wire transfer, digital prepaid debit or gift cards.
As noted earlier, XTRM ChoiceTM also enables the recipient to use their digital wallet for currency FX at lower than typical market rates prior to selecting their payment endpoint.
While the proliferation of channel automation software is likely to continue as purpose-built automation tools are adapted for the channel and multi-function channel management tools evolve, end-to-end payment processes can be readily embedded to support any of these software applications requiring either external funding or payments.
Doing so simplifies both the developer and end-user challenges to reduce cost, improve speed and, potentially, standardize what has often proved to be a difficult set of functionalities to master given the security, compliance and technical considerations balanced against the need to make it easier to do business.