While lowering payments costs will always be a key criterion in selecting a new payment service provider (PSP), many merchants also consider several other factors in the decision-making process:
- Payment system redundancy – as non-cash payments share increases rapidly; a payments system outage can have a significant impact on a merchant’s ability to conduct business so up-time and resilience of the payments infrastructure has become even more critical.
- Product innovation – customers are increasingly expecting seamless payments using their choice of payment method, and merchants are asking PSPs to deliver innovation to meet these customer demands.
Payments Consulting Network managing director, Mangala Martinus, recently caught up with Mark Nagy, CEO of DataMesh Group, to discuss how the company is addressing these merchant requirements and future payments trends.
You can read the highlights of their conversation below.
MM: DataMesh is a relatively new entrant to the payments landscape, can you provide an overview of the business and the services it provides?
MN: DataMesh was incorporated in 2018 but the business and team have been operating in other forms since 2011. We wanted to build an independent financial switching and processing network, that was complimentary to what the banks and other acquirers offered. However, we are not acquirer and we do NOT settle the transactions. We are a network service and solutions provider.
DataMesh drives and supports in-store payments, e-commerce, m-commerce, and data analytics.
Most merchant acquiring solutions are typically provided by banks, but over the past ten years those banks have struggled to innovate and keep up with merchant and consumer expectations. The customer experiences can vary significantly across industry sectors, so a one-size-fits-all payment solution is no longer good enough to meet changing merchant requirements and payments has changed dramatically over the last 10 years.
“DataMesh enables customer facing organisations like retailers and industry and government to ‘create their own adventures’. We drive and manage the technology to allow merchants to design their own customer experience, while they can continue to retain control over their banking relationships.”
MM: What industry sectors and client types do you focus on?
MN: The main industry sectors that we work with today are government, transit, and institutional size merchants with greater than $500 million in payments. They have known problems and known volumes. Some of the problems we are solving for clients include:
- Providing customers of fuel retailers the ability to pay at the pump.
- Enabling transit operators the ability to accept multiple payment types including proprietary schemes via a single payment or unattended terminal.
- Providing real-time switching to a back-up acquirer or telco in the case of outages.
- Allowing retailers to bring an integrated payment terminal out onto the shop floor to take payments to help with queue busting.
- Removing the cables between the POS and eftpos terminals at fuel retailers.
- To transition to Pin on Glass.
MM: What are your key strengths and differentiators?
MN: DataMesh is bank and device agnostic solutions company that provides merchants with acquirer and hardware portability.
We operate our own in-house developed, EMV compliant, active-active payments switching platform with full redundancy.
DataMesh maintains a multi-device, but single native payment application and integration certified by AusPayNet. This allows us to rollout a new device to the market in approximately 12 weeks rather than the 12 months it can typically take a major bank. We can do this cost effectively for as little as 5 devices.
As we do everything in-house, DataMesh can be agile and deliver innovative solutions to the market quickly. We see ourselves becoming the go-to-guys for innovation.
“Being innovative requires you to be so far ahead of the question, that you don’t get the question asked.”
Our business model is also very simple – a click fee per transaction that includes everything, i.e. the solution, comms, and processing. But not a share of the Merchant Service Fee.
We see our role as not to compete with the issuers or acquirers, but to complement what they are doing by providing them better technology to achieve their desired outcomes. This is what makes us unique.
MM: What are the key initiatives on your product/service roadmap over the next year?
MN: We will have a global network of 10 connected switches that will be in place by December 2022 to serve multi-national clients in banking, telephony, and mass transit. This will provide these clients with the global infrastructure they need to avoid the current reliance on a myriad of high-cost gateways and non-aligned banks; and provide even greater redundancy and resilience in our network. Again our model is as a solutions provider and not a third-party acquirer, so any fee benefits or savings is passed directly to the merchant and or consumer.
MM: What industry changes or trends do you see occurring over the next 2-3 years that will have a major impact on your business and/or your clients?
MN: There will be a shift to cloud-based services utilising thin clients on the terminal.
Disrupters such as Adyen and Worldpay are filling the customer experience gaps, but unlike these organisations that also do the acquiring, DataMesh positions itself as providing the infrastructure that supports banks and merchants by assisting them with innovation.
Merchants want access to the full portfolio of services but require the flexibility to select which services they take up.
MM: What key criteria or features should a business consider when evaluating payments service providers?
MN: PSPs should be providing merchants/banks with the ability to meet all requirements but also be independent and help them grow their business. They need to be able to provide portability of the acquiring, communications, and hardware relationships.
“PSPs should be able to provide and demonstrate real pathways to growth, showing a real willingness to partner with the merchant to deliver innovation – to test, pilot, build, and grow.”
Know your partner – businesses should understand who they are dealing with and their long-term agenda. Particularly when dealing with start-ups, who are the investors, is the goal to eventually sell out? All these factors can impact the tenure of the relationship.
DataMesh is a member of the Payment Service Provider Panel.
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