GoDaddy updates payment tools to battle fintechs, banks | PaymentsSource

Like many payment companies, GoDaddy is betting merchants will want broader relationships with fewer financial services providers to cut overhead. To this end, it has tweaked its technology in an attempt to make it easier for sellers to use WordPress’ content management system and WooCommerce’s open source e-commerce technology to build a store. 

These steps are part of an effort to bulk up on technology to offer a single location for payments and other needs for small merchants, particularly those that are facing economic challenges.

“If we’re in a recession these merchants will need to have an offering that is more relevant to more people, that allows them to sell more,” said Kasturi Nina Mudulodu, vice president of product management at GoDaddy. “These businesses have a lot on their plate, and they need to have some of their workload taken off of them.”

Following a December upgrade, GoDaddy contends it can now power a single dashboard to support sales and payments via brick and mortar locations, online marketplaces, social channels and platforms like Google, Etsy, eBay, Walmart and Amazon. 

The deployment is part of GoDaddy’s strategy to build a payment facilitator business, offering merchants the ability to support multiple payment types and sell in a variety of venues. 

GoDaddy is a competitive threat to community banks in particular, because these banks rely on small businesses for a large share of their income, according to Richard Crone, a payments consultant, adding small businesses are the most lucrative portion of the payment market. 

“This is what GoDaddy does,” Crone said. “It’s not just a one stop for payments but everything else you do to open a business. That’s eating into community banks, especially post-pandemic.”

As part of GoDaddy’s strategy, it has also launched a countertop payment terminal and mobile card reader target at small businesses. While GoDaddy is primarily an e-commerce company, other digital commerce companies have also added physical point-of-sale products in recent months. 

Adyen, for example, recently debuted two point-of-sale devices, one designed for small businesses and one designed for larger merchants. Adyen is also an early adopter of Apple technology that allows iPhones to serve as point-of-sale card readers. In-store point-of-sale hardware allows Adyen to offer unified commerce for merchants in both online and offline channels. Revolut, a U.K. fintech that has its roots in mobile payments, also in 2022 introduced point-of-sale hardware shortly before debuting a single-click digital payment option, with a similar goal of covering all bases for merchants.    

“Some of these sellers and marketplaces need to be in stores as well,” Mudulodu said. 

GoDaddy has been building its payment business brick-by-brick through internal product developments and acquisitions over the past two years, as it diversifies beyond a company traditionally known for managing web domains.  

GoDaddy’s $320 million acquisition of Poynt in late 2020 gave GoDaddy access to a variety of payment technologies aimed at small businesses, such as point-of- sale systems, apps, incentive marketing and invoicing. In another 2020 deal, GoDaddy purchased SkyVerge, adding dozens of WooCommerce extensions for email marketing, payments and other merchant services.  

GoDaddy in 2021 acquired Pagely, the technology firm that created WordPress, which gave GoDaddy tools to build a cloud-hosted WooCommerce platform. An earlier acquisition of Sellbrite gave GoDaddy tools to offer sales across different e-commerce platforms. GoDaddy also offers a transaction processing platform called GoDaddy Payments.  

The market to facilitate e-commerce and online payments for merchants is extremely competitive at this point, said Daniel Keyes, a senior analyst for Mercator’s merchant services practice.  

“There are already a number of major players in the space as well as firms that cater to specific categories of merchants, and many merchants have already found a partner in the years following the onset of the pandemic since that pushed more of their business online,” Keyes said.

Payment facilitators act as an alternative to banks and traditional payment processors, and the market for payment facilitators is crowded and expanding. Stripe, PayPal, Block/Square and potentially dozens of other firms fit into this category. These companies have also expanded their products to offer financial super apps, or a bundle of financial services. FIS, Jack Henry and Fiserv have also bundled products that support card issuance and payment processing to stay relevant against the payment technology companies.  

“There is still room for other firms to join the space and succeed if they can compete on price, offer an exceptionally convenient experience for merchants, or provide unique tools,” Keyes said.