Payments – more than moving money
Making payments easier has an impact that extends way beyond facilitating the exchange of payment for goods or services. It enables merchants to create stronger customer relationships by ensuring consumers are able to complete transactions quickly and securely.
Merchants need to understand their customers’ preferences and offer customised solutions based on the product or customer profile. If there is an issue at the checkout, they need to provide an alternative and attractive method of payment.
A key factor in reducing cart abandonment and ensuring more consumers complete their purchase is to move away from hard-to-remember 16-digit numbers and passwords, making the identification process more efficient, without compromising on security.
We envisage a point in the not too distant future when technology will determine the best way of making and receiving a payment without the need for any intervention from the party making or receiving it, leaving merchants and customers free to focus on the other elements of the purchase.
But how will this come about? Several factors will come into play.
Enabling, not restricting
Risk is a word that has often terrified businesses into paralysis. Risk departments are often (unfairly) seen as blocking new opportunities, but in the online payment world, a drastic change is currently taking place, and these departments are increasingly being perceived as enablers.
Risk analysis plays a leading role in ensuring services are delivered securely for both the customer and the merchant – arguably the most important point of the entire transaction. The influence of artificial intelligence on risk assessment is growing. One in eight consumer business respondents to PwC’s Global Economic Crime and Fraud Survey 2018 said predictive analytics and machine learning were useful for combatting/monitoring fraud and other economic crimes.
Research conducted by Experian found that most merchants are willing to follow the lead of other businesses, which is important because fraud prevention benefits from economies of scale – sharing data and risks across the retail sector industries will help to prevent threats and fraud occurring.
Strength in collaboration
Co-operation and collaboration across the payments industry has risen significantly in recent years on the back of wider integration opportunities and information sharing facilitated by industry-specific events. There is growing recognition that schemes, issuers, acquirers, processors and merchants can develop better products and services by exchanging data and insights.
Technology has made it possible to deliver more personalised payment services and this trend will continue. Paul Horlock, CEO of the UK’s New Payment System Operator (NPSO) has referred to a future where consumers can choose completely personalised payment services, tuned to their specific needs and life requirements.
This is the principle that underpins the vision of the payments world that regulators and payment processors, including Intrapay, are now creating. Technology has advanced to the point where each customer can be viewed as an individual market segment, with the data they share used to create services that match their requirements.
More efficient payment processes have implications for both ends of a merchant’s business. In an environment where customers can pay more quickly and easily, suppliers and other elements of the supply chain will also want to benefit from faster payments. If a business no longer has to wait to receive payments from its customers, it is not unreasonable that many of those in its supply chain will want to work on a ‘payment on receipt’ basis.
While this may sound daunting, it represents an opportunity to improve cash flow for smaller merchants, removing one of the major causes of retail business failure. Almost one third of UK respondents to the 2017 Global Business Monitor report referred to cash flow as the greatest challenge facing their business.
It’s time to remove unnecessary steps in the payment process and ensure the interface is user-friendly, secure and fast. More than just moving money, payments companies hold the power to ensure customers connect and transact with merchants time and time again.