Just over a decade ago, consumer payments were revolutionised by the launch of contactless cards. Their 2007 introduction followed hot on the heels of the advent of Chip and PIN technology, and before that (albeit as far back as the Eighties) came Switch, now better known as Direct Debit cards.
If that was a lot to take in for consumers in a relatively short period - not to mention it being the source of much excitement for retailers, banks and other businesses - the inception of new payment systems now seems to accelerate every year.
It’s becoming a universally popular way to pay. According to consultancy IQUII, digital payments via mobile and contactless platforms raked in annual global totals of E46bn by the end of 2018 - more than a fifth of total card payments worldwide.
Furthermore, the digital payments market is expected to build at an average rate of 18% each year from now until 2023 (source: ReportLinker). It’s a phenomenon brands, charities and any organisation with a need for transaction technology can’t afford to ignore.
The expanding payment ‘menu’ is increasing consumer choice, and newer technology is displacing long-standing options such as Direct Debit. That has a knock-on effect on customer acquisition and retention: people’s checkout preferences must be satisfied if organisations want to keep up with the competition.
For example, businesses that offer a subscription service, and therefore rely on regular payments from their customers, must now be equipped to cater for an array of payment options, including credit cards and digital wallets.
The face of current innovations
There are lots of emerging technologies to consider. Here are some of the major developments:
As we know, many consumers already use digital voice assistants such as Amazon Alexa, Google Home and Siri in their everyday lives. They do so in droves for a variety of reasons: playing music or connecting to cookery ideas, for example. But payment technology can also be linked to these devices to allow people to order products or make donations.
Very soon, any commercial enterprise will need to ensure their website is voice optimised. That means understanding how to incorporate voice-enabled purchases or donations into the customer journey, regardless of the device someone is using or their preferred payment platform.
For example, WPNC has been at the forefront of developing voice-based donations for UK charity supporters. We linked our goDonate Voice platform to Amazon Pay and launched this country’s first such service for NSPCC. The results are already encouraging.
Elsewhere, banks have used facial recognition for several years, while this method and fingerprint authentication are already incorporated into most smartphones’ settings. Today’s consumers are rightly aware of, and concerned about, online security. These innovative platforms promise to reduce fraud and present more frictionless payment options for the shopper who is reluctant to carry cash.
Forthcoming regulatory changes - in the form of the updated EU Payment Systems Directive (PSD2) - will require consumers to confirm their identity for digital purchases over £30. The use of fingerprints, facial and voice recognition will provide a relatively simple way to do this.
Take a closer look, however, and it’s as much about the overall customer journey as it is about the transaction. In other words, payment technology isn’t just about increasing conversions at the checkout; it’s also changing the way consumers experience brands throughout the sales funnel. That requires an understanding of how to incorporate these emerging payment methods into your wider marketing strategies.
Despite doom and gloom surrounding our high streets, consumers are at least becoming used to a smoother shopping experience. In the US, bricks and mortar Amazon outlets house functionality that allows baskets to calculate the price of a customer’s shopping as each item is added, simply through someone’s in-store location. Frictionless payment is also coming to UK retailers. For instance, Sainsbury’s shoppers can avoid the queues by using mobile technology that lets them scan, pay and go.
But real growth will come as ecommerce providers begin to replicate a similar level of customer experience online. Marketers are looking to agencies to help them manage this disruptive technology and understand how consumers are using, and would like to use, these platforms.
We always advocate designing the customer experience with the consumer in mind. Whether the vehicle is a DRTV campaign, SMS call to action or online advertising, that experience should be as frictionless and rewarding as possible. The journey should lead the customer neatly to the checkout. And, of course, the checkout process must be slick, quick and offer all available payment options.
Although some businesses still believe payment technology should fall within the IT department’s remit, marketers should boldly stake their claim. They are the ones who can understand what the customer wants in terms of an experience. Brand reputation is at stake if they deem that experience poor and the product or service isn’t ultimately easy to buy.
Meanwhile, keeping up with the digital native Millennials and Generation Z consumers will be vital. These are the people with the future spending power to make and break brands. They’ll also be au fait with instant digital payment and impatient if it’s missing.
The more agile organisations can be about implementing new technologies and creating customer experiences around them, the more successful they will be with these audiences.
Now is the time to consider the future
It might surprise you to learn that just a quarter of UK shoppers and still fewer US consumers (17%) consider themselves digital wallet users (source: Merchant Machine). This means there is still huge room for growth in penetration of next-generation technologies.
In spite of this, smart marketers will start to focus now on what their organisation could be doing to stay ahead of the curve. Otherwise, their existing customer journey could quickly become obsolete.
As an agency, we are constantly scouring the globe for payment innovations; analysing which will have the greatest impact on conversion. We’ve created our own working party, led by our CTO, to monitor developments and consider how these transaction technologies can align with customer experience to give people a fulfilling and frictionless journey. We can even devise ways to do this for organisations that are currently tied into contracts with existing payment providers.
Whether it’s the need for a new ecommerce site that offers users a better all-round journey from browsing to buying, or harnessing the latest biometric or voice innovations, it’s never too early to start your own journey to digital payments. Get it right and your conversion and customer satisfaction rates will soar.