Why do they do it, and how does fintech helps to save on acquiring
Russian retailers have argued with banks over the high cost of reaching for the past three years. In 2018, they first turned to the government for help and asked to regulate tariffs. In 2020, the state temporarily froze tariffs, but by 2021 the share of non-cash payments approached 70%, and acquiring rates began to exceed 3% – ACORT data.
Only Wildberries declared an open fight against banks and payment systems among the marketplaces. In August 2021, Wildberries offered users to buy goods without the Visa and Mastercard payment systems commission. The marketplace has reduced the prices of goods by 2% for those who pay for purchases with the MIR payment system cards through SberPay or the Fast Payment System. That is, he made purchases with Visa and Mastercard unprofitable. A month later, the conflict was resolved, and the marketplace returned a single price for goods. But soon, he launched his bank card.
Ozon and Yandex started developing their fintech businesses earlier without open confrontation. Marketplaces were followed by large retailers — Magnit and X5 Group.
This article will explain why it is more profitable for marketplaces and retailers to develop their fintech services and abandon third-party acquiring banks. We will also show how this fintech works.
Why Own Fintech Is More Profitable Than Third-Party Acquiring
Let’s look at specific numbers. Wildberries process 2.3 million orders worth 2.2 billion rubles daily. But 2% from each operation gives to acquiring. As a result, the marketplace loses 40 million rubles every day. However, I could spend this money on developing the business and technological infrastructure of the market.
Another Ozon marketplace increased its turnover in 2020 to 197 billion rubles. And the market spent almost 4 billion rubles on acquiring.
And although some banks and payment systems make indulgences for marketplaces and develop loyalty programs, such as Visa and Mastercard in 2022, when they set special rates for accepting cards from large retailers. It is still more profitable for marketplaces and large retailers to develop their fintech services.
In addition to economic benefits, their financial services help improve customers’ user experience, provide seamless access to all services of the marketplace, and create personalized financial instruments. As a result, the user spends more time inside the market and generates more income.