What makes a great payment ecosystem?

A great payment ecosystem brings together buyers and sellers by giving them the peace-of-mind knowing that, once the buyer pays, the seller will deliver the goods/services as agreed. If no sellers are willing to accept payments in a particular payment method, buyers will have no reason to embrace that form of payment. Similarly, if no buyers are ready to make payments using a specific method of payment, sellers will have no reason to adopt that form of payment. Assuming you have both buyers and sellers willing to use the payment method, you need to make sure they trust each other enough to carry out transactions.

A complete ecosystem enables buyers and sellers to transact with confidence by allowing each party to assess the trustworthiness of the other side.

Another vital aspect of a comprehensive payments ecosystem is how effectively it deals with matters when something goes wrong – for example, someone commits fraud, or someone doesn’t receive what they paid. A lot of people don’t realize this, but one of the defining characteristics of the primary card networks is that they offer mediation: they spend billions of dollars each year resolving transaction disputes, and this function is something that individuals and merchants have grown accustomed.

To summarize, a great payments ecosystem needs a broad base of people who are willing to pay using the system, and a large base of people and merchants who are willing to accept payments using the system, high approval rates, and low transaction fees. It also needs supporting infrastructure for ensuring that buyers and sellers can transact with low-friction and with complete peace-of-mind.