In the world of software payment integration, a trend has taken shape over the last few years involving a strategy aimed at something known as super niche payment verticals. The concept requires creating highly efficient, custom-built software that caters to the very, very specific needs of a particular market segment as well as incorporating their unique payment requirements.
To provide background on how this strategy has come into play, today’s software companies are creating incredibly feature-rich platforms that address a multitude of requirements for various industries. These platforms offer incredible convenience and efficiency to their end users. Additionally, many software providers are beginning to understand the revenue potential of payment integration and are making their software even more marketable by optimizing accounts receivable (AR) and payment acceptance functionality within their platform.
Unfortunately, this strategy has had a downside for clients with very specific needs, such as those that exist in the above-mentioned super niche payment verticals. Traditionally, many niche vertical markets have relied on older technology built to address the uniqueness of their industry, but when they attempt to modernize or upgrade their AR or payment acceptance tools, they are forced into a one-size-fits-all horizontal solution that does little to address their unique requirements. In some cases, the change can even be more of hindrance than an advantage.
It can be a competitive disadvantage for software companies who do not support their customers’ desired payment channels (mobile, payer portal, recurring payments, etc.) or unique data security, reconciliation and cash application tools that their vertical requires.
To highlight this point, we recently spoke with a software company who had lost a client that generated more than $50,000 in annual revenue due to their platform not meeting the client’s unique payment acceptance needs.
As a result, many developers are beginning to take the approach that they needn’t be all things to all people. Instead, they are creating super niche technology to cater to the unique needs of specific verticals.
The advantages are significant. Software companies that hyper focus on a specific vertical niche can eliminate excessive and unnecessary features while still building something that works out-of-the-box, albeit one for a specific market. They also develop a better understanding of their clients and can build a more symbiotic relationship with their partners.
This concept is now continuing when payment integration is incorporated into the mix. By building software and payment integration with the needs of specific payment verticals in mind from the forefront, the relationship between software platform and end user becomes even more sticky.
The competitive advantage of integrated payments is significant. I’d love to hear your feedback, and please reach out if you’d like to explore how meeting your clients’ unique AR needs can give you a leg up on your competition.
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