Harnessing Payment Processing to Better Serve the Agricultural Community

Farmers are busy people. They’re rarely in one place for a long time because their livelihoods depend on mobility. Agricultural production requires hours spent operating machinery, hauling grain, baling hay, attending to livestock, and fixing fences and buildings. Farmers are not sitting at a desktop spending money on the latest deals at Tractor Supply Company. But hold that thought,. Farmers are spending. Perhaps not on static desktops but on mobile payment platforms.

Farmers love their smartphones because they work anywhere with a WiFi signal, field or farm, and there are apps for everything. According to Agriculture.com, farmers are using their mobile phones and apps more than ever before.

Farmers are using their trusted smartphones for everything from taking a picture of a cow’s infected udder to show the vet for a diagnosis to ordering a brand new John Deere 9RX from an online dealer. So, retailers serving the agricultural community would be wise to consider how and where they are reaching and serving their customers.


How Mobile Is Proliferating in the Agribusiness Ecosystem
We all rely on our phones, but mobile platforms and apps are now an integral part of agribusiness and the lives of its workers. One North Carolina farmer interviewed by Agriculture.com starts his day with a sermon from a bible app. Another uses MyRadar to monitor weather patterns, and another uses MyMeasure, a digital measuring tool that’s a lot less bulky to carry around.

One Missouri farmer states that her phone makes her more efficient. She can stay on top of market prices, watch the weather, and track the production of cattle and hogs no matter where she has to be for business.

Smartphone apps help farmers manage their operations, monitor stocks and yields, manage their finances and accounts, and buy the feed and supplies they need. It used to be that cash was king among farmers, but cash payments are inconvenient and clumsy. Farmers now use financial services and payment services that streamline cash flow and meet them where they are—on the land. Digital payment systems and the services of microfinance institutions that allow faster loan disbursements have been a Godsend.

Just look at the popularity of online auctions. Farmers can value, sell, buy, and finance heavy equipment using their phones while plowing a field in their tractor. Sites like Ironcomps.com offer immediate valuations of heavy equipment through an online app. According to Successful Farming, the vast majority of farm machinery and vehicles now sell online.


High Tech Mobile in Agriculture and Land Management
In the agricultural space, smallholder farmers and global agricultural conglomerates recognize mobile devices as evolving tools that will only grow in use worldwide. Mobile devices will soon be used to determine the chemical or nitrogen content of a plant or soil.

This technology will be applied to soil composition analysis and to determine the ripeness or spoilage of fruit, vegetables, meat, milk, and cheese. Other use cases are quality control of products, including feed for livestock and biofuel. Apps can also generate recommendations for farmers, such as what crops to grow and appropriate lime and fertilizer applications depending on the soil type.

In fact, the digitalization of the agriculture private sector is already way beyond using a mobile device to order fencing or animal feed from an online retailer. Leading tech companies like IBM have an attentive global audience and are applying artificial intelligence (AI) to help the agriculture sector achieve its goals.

IBM’s AI-driven Regenerative Agriculture initiative is expected to help food producers better manage supply chains. Predictive analytics and geospatial analytics will stabilize commodity prices, and agri-lenders and insurance agents will benefit from loans and risk insights.

All this to say that suppliers in the agriculture and foods supply chain that lag in their digitalization will be forced out of the ecosystem.


The Response of the Big Agribusiness Suppliers
The big players in the agriculture supplier market are already on board with mobile-enabled websites, embedded banking and finance solutions, and payment technologies.

Take Tractor Supply Company as a case in point. Tractor Supply is a market leader in retail for home improvement; agriculture; livestock; and equine care for farmers and landowners. Its competitors include Home Depot, Harbor Freight Tools, Ace Hardware, Lowe’s Home Improvement, and LL Flooring.

Recently, these retailers that serve the agriculture, property, and land community have benefited from the recent “escape to the countryside” trend caused by the COVID-19 pandemic. Millennials are leaving dense urban areas in their droves to settle in rural areas, which has pushed up the price of rural housing and agricultural and construction materials—a boon for the stock price of these market competitors.

But these companies aren’t just leveraging the effects of demographic and geographic shifts occurring post-pandemic. They have set themselves up to leverage the lifestyles and preferences of their customers and potential customers.


Digital Payment and Financing Solutions
Tractor Supply Company and its competitors have all embraced the embedded banking concept. Embedded banking allows any company to be part of the fintech revolution without relying on financial institutions. By partnering with a solutions provider rather than a financial institution, they can realize increased aggregate revenues per customer, higher retention, and deeper customer relationship and insights.

Also known as banking-as-a-service (Baas), bank accounts, mobile money services, financing, and payments infrastructure are integrated directly into platforms of retailers and other businesses by service providers. Visitors to a site or mobile app pay directly through the application programming interface (API) with lower transaction costs.

Tractor Supply, Lowes, Home Depot, Harbor Freight Tools, Ace Hardware, and LL Flooring all offer not just convenient digital payments but financing options like buy now pay later (BNPL). They also offer branded credit cards and gift cards with incentives and rewards programs to increase customer loyalty and boost conversions. Some companies even offer insurance products and international remittances with low transaction fees.

Not only do these business cases illustrate how to improve the customer experience and increase loyalty, but the financing business models ensure financial inclusion for the unbanked who do not have access to credit and spending power otherwise.


The Value of Data for Agribusiness Retailers
There’s an additional benefit to retailers in choosing a digitalized payment and financing infrastructure—the capture of data. Ace Hardware allows customers to apply for a branded rewards credit card via mobile technology. The onboarding process and application form is quick and mobile-friendly with as few fields as possible to optimize customer uptake. But it collects enough real-time data so that the retailer can monitor and learn about consumer preferences and better meet their needs. For example, zero time in a checkout line when paying for supplies and equipment using mobile wallets at point of sale (POS).


Reaching the Agribusiness Sector with Mobile Payments
The agriculture sector is further along the spectrum of mobile adoption than many of us would think. The industry has had to be because agri-business transactions occur every second in every corner of the world, literally. Farmers, scientists, researchers, government workers, and communities are in every field and every village finding ways to leverage mobile digital technology to improve food security and the agriculture supply chain.

If you’re a retailer serving the agricultural sector, mobile-enabled payments and financing options are the expected business model. Anything less will lose sales. The secret is to meet the customer where they are—through an app in a phone in the hands of a farmer in a spanking new John Deere tractor in the middle of 25 hectares of alfalfa…somewhere.

Contact Cartis Payments to learn how your company can gain traction in agricultural value chains by introducing new payment methods.