Why Rigidity is Your Enemy: A case for flexibility in payment systems for today's fast-paced and uncertain world

It is not the strongest species that survives, not the most intelligent, but the one most responsive to change. - Charles Darwin, On the origin of species

This principle holds true in the rapidly evolving world, where flexibility is not just a benefit but a necessity for survival and success.

In terms of payments stack - Flexibility matters:

• Flexibility in the business model: I have a dentist friend. He started with a single dental office and, over a decade, expanded to 11 clinics operating on a franchise model. Now, he's venturing into creating a SaaS platform for dental practice management, which includes a payment module. This transition raises a crucial question: Is the payment stack flexible enough to adapt to such significant changes in the business model?
• Flexibility to adapt to compliance and regulatory changes: In the realm of payments, staying compliant with evolving standards and regulations like PCI, SOC 2, RBI mandate, and PSD 2 is critical. A payment system that can swiftly adapt to these changes is vital to maintaining operational integrity and customer trust.
• Flexibility to offer payment methods: The versatility to offer various payment methods, such as credit cards, Apple Pay, Google Pay, and Local Payment Methods (LPMs), is essential. Catering to diverse customer preferences in payment methods can significantly enhance user experience and broaden market reach.
• Flexibility to choose the right Payment Service Providers: The ability to collaborate efficiently with the right Payment Service Provider (PSP) is key. Businesses should be able to switch or integrate with the best PSP without enduring lengthy, five-month migration projects.
• Flexibility to authorize and capture creatively:Moreover, there's a need for ingenuity in how transactions are authorized and captured. Consider strategies like initial authorization followed by a delayed capture, or the ability to issue credits without traditional refunds. Innovations like 'Buy Now, Pay Later' (BNPL) and installment payments in regions like Latin America are redefining transaction models.

The payments industry is in a constant state of flux, driven by both innovations and regulations. This environment is further influenced by broader trends like platformization, the creator economy, software eating the world, etc.

In this dynamic landscape, businesses must partner with a payment provider that not only understands these complexities but also offers the agility to navigate and thrive amidst them. Flexibility in the payment stack is not just about responding to change – it's about embracing and leveraging it for growth and innovation.