The fintech industry has been disrupting traditional industries for several years now. One of the biggest has been retail. The way in which consumers buy and retailers sell their products has changed dramatically thanks to the available resources of fintech businesses.
The pandemic has fuelled the biggest change in the retail experience for the last century. Decade’s worth of innovation and adoption of new technology has taken place in a matter of months. McKinsey has even dubbed it “the Quickening” as ten years’ of ecommerce growth took place in just three months in the US alone.
During the months of lockdowns in the UK, consumers were forced to embrace online shopping on an unprecedented level; this step change is now here to stay. And in fact, for many retailers a move to digital provided them with an opportunity to reach more customers than ever before. We saw some great examples of creativity and ingenuity in those early days, particularly from small, local businesses. But for others it was a challenge. Many lacked the technical infrastructure that allowed them to pivot fast enough. But this is where the right technology partners can help.
Payments technology, for example, can help businesses digitise their customer experiences and offer more streamlined transactions. From the adoption of mobile terminals, to QR code payments, the pandemic has prompted many retailers to harness the power of payments. This allows them to remain competitive during a challenging time, as well as creating a seamless experience shoppers will remember.
With payments becoming an increasingly important part of retailers’ customer experience offering, here are some important trends to bear in mind:
The rise of the platform economy
Platforms and marketplaces aren’t new. The likes of eBay, Etsy and Not On The High Street have been around for years. But the pandemic has increased the
sales from platforms across the world. These marketplaces, with their built-in payment features, are ideal for small retailers that don’t have the resources to develop their own ecommerce portal. To deliver the best experience to these businesses, it is crucial that platforms and marketplaces can offer streamlined onboarding processes and rapid pay-outs.
That makes payments a vital piece of the puzzle for platforms. Despite offering users simplicity, platforms can be complex behind the scenes. They facilitate commerce by connecting customers and their users (sub-merchants, suppliers, sellers, contractors etc.) to complete a transaction. It’s like itemising and splitting a bill at the end of a meal, but turbocharged. Sorting out payments and removing friction is a massive value add. Get it right, and a platform becomes an essential service that users can’t do business without.
Network tokens make payments even easier
Platforms also give retailers access to tools which they may not have understood or been able to implement themselves. Payment tokens are the perfect example of this. Tokens replace sensitive data and improve the payments experience. Sensitive data, such as primary account numbers are replaced by a token in real time, meaning sensitive data is never used in a transaction. This dramatically cuts down the chance of fraud because the one-time token can’t be hacked or used again. Tokens therefore enable consumers to securely save or share their payment details with retailers across a platform, opening up the possibility of one-click (or even no-click) payments. For retailers, tokens help to improve payment authorisation rates and conversions, meaning more satisfied customers and increased pay-outs.
Going beyond digital
Traditionally, seamless, consumer-centric experiences were associated with digital marketplaces. But now, SaaS platforms are putting personalised customer journeys and next-generation capabilities within reach for all kinds of businesses.
Increasingly, platform businesses need to help their users solve challenges at the physical point of sale as well as online. Innovative payment solutions are bringing unified commerce to platform businesses, helping their users to link their online and offline sales channels. This has the benefit of improving user experience, but also streamlining backend systems to provide faster reconciliation, increased reporting and more customer insights – another key value add for platform businesses.
Retail has evolved more in the past 18 months than in previous generations. Being able to leverage payment technology to its full advantage, and diversity, is essential to retailers in winning the battle for customer attention and success. The payment process has become a crucial part of the customer experience. Retailers should look to the latest fintech partners that will help ensure they keep pace with the changing nature of customer demands.