Horizontal = industry agnostic
broad service covering a wide breadth of industries
usually more mature solutions
examples: Square, Worldpay, Quickbooks, FIS
Key:
need to own the entire stack and have an incredibly powerful value proposition or else you will lose to incumbents
Vertical = industry specific
full featured solutions for industry niches addressing specific pain points
functional specificity narrows their target market but creates high stickiness and higher ARPU if they can serve their market well
examples: Lightspeed for restaurants, Mindbody for salons/fitness
Key:
need to REALLY UNDERSTAND industry pain points and be able to solve for them
Overall
merchant services and card acceptance are table stakes
payments should be part of a bigger software solution
horizontal or vertical, they are a one to many opportunity for acquirers
consider operational costs and acquisition costs no matter what path you choose