The Payments Landscape is Changing – But is it for the Better?

The world of payments is evolving rapidly, bringing both opportunities and challenges for retailers. In the past, businesses typically dealt with separate systems for EPOS (Electronic Point of Sale), ERP (Enterprise Resource Planning), and payment processing. While these systems often integrated, they were still provided by different companies.

This setup had its drawbacks. If a retailer wanted to switch to a new provider, they might face integration issues, particularly if their chosen solution wasn’t compatible with their existing systems. However, with the right technical expertise, these challenges could usually be resolved efficiently.

The Shift Towards Closed Payment Systems

With the rise of online payments, some of the larger platforms began insisting that businesses use their proprietary payment gateways, often restricting the ability to integrate with other acquirers. In many cases, retailers had little choice but to comply, as these platforms were essential for their online operations.

This shift resulted in several concerning trends:

• Increased transaction fees – With limited competition, some providers hiked their charges.

• Reduced flexibility – Retailers lost the ability to choose the most cost-effective or best-performing payment gateway.

• Inconsistent service quality – Some providers failed to offer reliable customer support, but switching to a different gateway was not an option.

Acquirers Expanding into EPOS and ERP

Recently, acquirers have started taking a more aggressive approach—not just looking for Independent Software Vendors (ISVs) to integrate with, but outright acquiring EPOS and ERP companies. These systems are then rebranded and sold under the acquirer’s name, creating a fully integrated payment ecosystem.

Is This a Good Thing for Retail?

On the surface, this might seem like a positive development. A single provider handling EPOS, ERP, and payments means:

• Seamless integrations – No more compatibility issues between different systems.

• Simplified support – One point of contact for troubleshooting and assistance.

• Potential cost savings – Bundled services could offer better pricing—at least initially.

However, this consolidation raises some critical concerns:

1. Loss of Competition and Increased Prices

Once an acquirer controls the entire retail technology stack, they no longer need to compete on price. Retailers may face gradual fee increases over time, with little recourse. What begins as an affordable, convenient package could quickly become an expensive, restrictive system.

2. Reduced Flexibility and Vendor Lock-in

Retailers typically change their EPOS or ERP systems only once every 10 years, as switching is a complex and costly process. If they commit to an acquirer’s system, they risk being locked in for the long haul, even if the service declines or better options become available. Unlike standalone payment processors that can be swapped out with relative ease, an integrated EPOS-ERP-payment system is much harder to replace.

3. Potential Service and Innovation Concerns

When payment providers acquire EPOS and ERP companies, their primary focus is on transaction processing, not retail operations. There’s a risk that innovation in the EPOS and ERP space could slow down, with systems becoming less responsive to the evolving needs of retailers. Additionally, customer support could suffer, as acquirers prioritise their payment processing business over the day-to-day operational needs of merchants.

The Future of Retail Payments: A Need for Balance

Retailers need to carefully consider whether an all-in-one provider is truly in their best interest. While there are clear advantages to a unified system, the potential downsides—higher costs, lack of flexibility, and reduced competition—should not be ignored.

The ideal scenario is one where retailers retain the freedom to choose the best solutions for their business without being locked into a single provider’s ecosystem. As the payments landscape continues to evolve, businesses must stay informed and proactive to ensure they remain in control of their operations rather than being at the mercy of a monopolised market.