During the past few years, unpredictability has taught businesses that being adaptable and thinking fast are key. The global pandemic has forced company owners to rethink their business models, act quickly and offer consumers exactly what they need. Businesses that survived the crisis and even those that weren’t affected can learn much from this. And yet, this lesson is often overlooked when it comes to payment systems.
Legacy payment systems serve less and less of their initial purpose. Companies that stick to legacy solutions are missing out on growth and other great opportunities that modern payment solutions can bring. And yet, many companies struggle to identify that they’re tied to payment solutions that fail to serve their purpose.
Find out if your company is missing out on payment opportunities that can provide your business with a competitive advantage, and learn what benefits modern payment solutions can offer to your business.
What is a legacy payment system?
Legacy payment systems were developed years ago and are incapable of keeping up with modern technologies and current customer needs. These systems often lack resilience, are incompatible with popular payment methods and are at risk of exposing banks and their customers to various security risks. Maintaining legacy payment systems is expensive and becoming increasingly complex since it requires experts with niche technical knowledge about systems that are hardly relevant anymore.
The reason legacy systems are still widely used is the fact that they were the only choice for so long. The lack of unified regulations, transparency and industry standards meant that banks and financial institutions could build their systems in all different ways.
Many banks are now unable to upgrade their systems because they are at the core of overall banking architecture. Making changes to these systems would impact the bank's operations.
The hidden price of legacy payment systems
Many companies stick to legacy payment systems because they don’t know what they’re losing out on. The systems may seem to work just fine, but in reality, they impede business growth and have a negative impact on profits. Often, companies only find out about the issues when they, for example, try to implement new payment methods. Companies end up running into a lengthy development process with high costs.
If legacy systems only require minor fixes, the overall cost of maintaining an outdated system may not be evident. However, constantly fixing small inefficiencies can cause not only financial damage but also a higher risk of system breakage.
Maintaining a legacy system is the same as keeping an old car. You can invest money in fixing the car, but it will only get older and never be as reliable and efficient as a new car. Moreover, only newer cars meet the most recent environmental standards and support the needs of a contemporary person. While getting a new car may require a higher one-time investment but long term, this is the only way to go.
Benefits of modern payment solutions
The benefits of modern payment solutions are numerous. Here are the main groups of benefits that will help you quickly compare how modern solutions outweigh legacy system features.
Internal financial management
Modern payment solutions can help companies reconcile payments coming from various sources. For example, a business can accept payments from bank cards, mobile wallets, cash, and bank transfers. Without a system, reconciling these payments can be very complicated and time-consuming.
A modern payment solution can help improve internal financial management by making it easy to ensure a business’ records of owed and due payments match the transactions appearing on bank and credit card statements.
Data and analytics
Modern systems provide various transactional data, which gives companies more control. Businesses can track their successful transactions and easily identify if there are any issues with payments.
Having access to data allows companies to react quickly to changing customer needs and adapt their checkout flow accordingly. For example, if kevin. clients see that most consumers choose account-to-account payments, they might choose to set the A2A payment solution as a default payment method. Merchants can also set the A2A payment method as the first option at the checkout.
Security and compliance
Choosing a payment system that is compliant with various security standards means that companies don’t have to take separate actions to become compliant. Modern payment solutions can also ensure the highest security standards by using tokens and other security features.
Companies can even choose to offer payment methods, such as account-to-account payments, to eliminate the risk of card payment fraud completely.
Scalability and adaptation to new markets
When scaling a business, the last thing anyone needs is a payment solution that may slow down the process. However, this is the reality with most legacy payment systems.
Modern payment solutions can help scale businesses. For example, kevin. payment infrastructure supports banks across all the EU countries, which can help companies to serve over 350M consumers. With such a payment solution, scaling businesses and entering new markets is easy because companies don’t need to take extra steps to offer new clients their preferred payment methods.
User experience
Open banking has made sure that banks and financial institutions put customers at the core of their business. Consumers now enjoy better services and have more control over their finances. Improved user experience is another benefit that modern payment solutions can ensure. For example, kevin. clients can offer an account linking feature to help consumers shop more quickly.
Modern solutions also benefit businesses, as they see increased conversion rates and significantly reduced abandoned carts.
Innovative payment infrastructure for businesses and financial institutions
Consumers expect companies to keep up with their needs, especially in e-commerce, where new technologies are emerging quickly. Maintaining a legacy payment system can bring companies financial and even reputational damage. Companies can quickly lose their competitive edge if they can’t keep up with the client's needs.
Modern payment solutions benefit businesses by providing more control to companies and empowering them to make quick changes based on data. These solutions also enable faster scaling and entering new markets, which can result in exceptional profits.
When it comes to consumers, modern payment systems offer robust security and a frictionless customer experience. This also benefits companies by boosting their conversion rates and reducing abandoned carts.
Financial institutions can also benefit from modern payment solutions by partnering with innovative fintech and integrating a cutting-edge payment infrastructure into their services.
Legacy payment systems are counting their last days, and there’s no reason why any company should sacrifice their business success because of that. Choose a modern payment solution and watch your profits grow.
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Adelina KiskyteFormer Senior Content Manager
