A new Intuit survey says 68% of SMBs use an average of four apps to run their businesses - here's how they're choosing payment providers
App marketplaces also alleviate some of the issues associated with the overcrowded payments space. Relatively new players that have effectively leveraged the rise of the digital economy, like mPOS firm Square, are increasingly encroaching on the payments industry, putting pricing pressure on payment hardware and service giants. This has diminished client loyalty as merchants seek out the most affordable solution, and it's resulted in lost revenue for providers. However, app marketplaces can be used as tools not only to build client loyalty, but also as a revenue booster - Verifone, for instance, charges developers 30% of net revenue for each installed app and a distribution fee for each free app.In this report, Business Insider Intelligence looks at the drivers of POS app marketplaces and the legacy and challenger firms that are supplying them. The report also highlights the strategies these providers are employing, and the ways that they can capitalize on the emergence of this new market. Finally, it looks to the future of POS app marketplaces, and how they may evolve moving forward.
Here are some of the key takeaways from the report:
- SMBs are a massive force in the US, which makes understanding their needs a necessity for POS terminal providers, software providers, and resellers - the US counts roughly 8 million SMBs, or 99.7% of all businesses.
- The entrance of new challengers into the payment space has put pricing pressure on the entire industry, forcing all of the players in the industry to find new solutions to keep customers loyal while also gaining a new revenue source.
- Major firms in the industry, like Verifone and Ingenico, have turned to value-added services, specifically app marketplaces, to not only build loyalty but also giving them a new revenue source - Verifone charges developers 30% of net revenue for each installed app and a distribution fee for each free app.
- According to a recent survey by Intuit, 68% of SMBs stated that they use an average of four apps to run their businesses. As developers flock to the space to grab a piece of the pie, it's likely that increased competition will lead to robust, revenue-generating marketplaces.
- And there are plenty of opportunities to build out app marketplace capabilities, such as in-person training, to further engage with users - 66% of app users would hire someone to train and educate them on which apps are right for their businesses.
- Identifies the factors that have changed how SMBs are choosing payment providers.
- Discusses why firms in the payments industry have started to introduce app marketplaces over the last four years.
- Analyzes some of the most popular app marketplaces in the industry and identifies the strengths of each.
- Breaks down the concerns merchants have relating to app marketplaces, and discusses how providers can solve these issues.
- Explores what app marketplace providers will have to do going forward in order to avoid being outperformed in an industry that's becoming increasingly saturated.
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