Gabriel Lucas and Chaira Mekkaoui, Associate Directors at Redbridge Debt and Treasury Advisory, delve into the strategies that empower businesses to thrive in this fast-evolving ecosystem, from B2B and B2C to direct-to-customer.

The payment industry and its systems have undergone a transformative shift driven by the remarkable growth of global ecommerce, which has reached a substantial value of USD 5.4 trillion in sales in 2022. Among the various ecommerce models, several marketplaces have emerged as dominant players in this landscape, leading to the consolidation of a significant portion of online sales.

With highly decentralised business structures serving as models of inspiration for business entities, businesses are now seeking to extend payment systems beyond transactions and explore the order-to-cash value chain. Additionally, innovative financial services such as those provided by licenced third-party entities like PayFacs:

  • register a CAGR of 35.1% in the forecast period spanning from 2021 to 2026;
  • offer new avenues for businesses to deliver value-added services to existing customers;
  • create diverse revenue streams.

In this article, we delve into the strategies that empower businesses to thrive in this fast-evolving ecosystem, from B2B to B2C, and their platforms, as well as financial services (B2B2C) to direct-to-customer.

Direct-to-customer merchants are continuously striving to improve the consumer shopping experience, by implementing value-added services, which allow them to generate additional revenues.


On the one hand, some of those services indirectly bring additional revenues by improving customer experience:

  • payment facilities – offering alternatives to pay such as Buy Now, Pay Later (BNPL);
  • omnichannel experience – which enriches customer shopping journey by switching between online and offline channels and thus, boosting sales opportunities;
  • automated billing and reconciliation processes – providing efficiency and accuracy in financial operations, particularly suited for subscriptions and SMB transactions;
  • the ability to offer an embedded customer portal, especially for B2B customers, to provide the option of easily following the payment status.


On the other hand, certain services can still bring value to consumers while directly generating additional revenues to the merchant:

Dynamic Currency Conversion (DCC) stands out as a powerful financial tool that benefits both customers and businesses by providing transparency, convenience, and clarity in currency conversions while generating additional revenue for the merchant at every transaction.

Tax-free shopping can be an attractive proposition for international customers by automating the time-consuming process of getting the tax refunded, leading to additional revenue for the merchant at every transaction.

Card issuing enables merchants to deliver value-added services to existing customers and generate additional revenues by providing branded payment cards, loyalty programmes, exclusive promotions, and enhanced customer experiences. On the one hand, direct additional revenue is generated through interchange fees; on the other hand, it offers access to customer data which allows for personalised marketing, cross-selling, and upselling opportunities.

Marketplace/platform model

A marketplace is an online platform that connects buyers and sellers, facilitating the exchange of goods and services. It acts as an intermediary, allowing multiple sellers to showcase their products or services to a wide audience of potential customers. In addition to its key advantages and core services (billing, pay-in, tax collection, account management, and pay-out), the marketplace can propose enhanced and additional value-added services as well as its core services, which can be monetised as part of the package:

All direct-to-customer value-added services can also be proposed. Card issuing appears to be an innovative topic in this type of business.

Enhanced billing and tax management, although a core service, may be a key differentiator to attract more end-users and vendors to the platform.

Faster payouts may bring vendors more control over their cash flow by allowing a quicker receipt of funds (even instantly in certain regions).

Financing options can be proposed to vendors. This is the case for Amazon which proposes ‘Amazon Lending’, a service where loans range from USD 1,000 to USD 750,000 – and are capped at 12-month repayment terms for retailers after they’ve completed a short online application form. Loans are automatically deducted from the seller account disbursement at a fixed percentage each month.

Cash management facilities – by proposing financial account creation to sellers – offer several benefits like fund retainment, payment of invoices, receipt of funds (even from external bank accounts), interest charges, and control of cash-management flows. Those financial accounts may also be associated with cards issued by the marketplace.

ESG (Environmental, Social & Governance) finance attracts a growing segment of socially conscious consumers, creating tailored investment products and differentiating businesses in the competitive landscape. By aligning financial services with ESG principles, companies can foster customer loyalty, tap into new markets, and strengthen their position as responsible and sustainable players in the financial industry.

Financial services

 Banking-as-a-Service (BaaS) companies allow non-licenced companies to propose financial services without any regulatory burden and as part of the technical effort. In other words, any company can build financial services as if it were a bank without holding such licences. Multiple fintechs start their operations without any licence so that they can test and improve financial products as early as possible and then licence the project, which is considered a second step to becoming mature and reducing marginal costs.

In this context, the future role of banks stands at a crossroads as BaaS companies disrupt the financial landscape. This type of service enables businesses to swiftly develop and test innovative financial products, provide value-added services to existing customers, and create revenue streams with agility and efficiency. As a result, banks must reevaluate their position in the market, capitalising on their established reputations, customer bases, and expertise. Embracing partnerships with BaaS providers can help banks extend their reach, diversify offerings, and leverage their strengths, while embracing the flexibility and rapid innovation inherent in the BaaS model. The future role of banks will revolve around strategic collaborations and maintaining customer trust, to ensure that they remain central players in the ever-evolving landscape of financial services.

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