Digital technology has transformed every part of our lives, including payments. As many consumers desire efficiency and convenience, for businesses it can be difficult to adapt. Here, Andy Stalsberg, chief commercial officer at Access PaySuite, discusses the importance of businesses keeping pace with new payment trends and how to adapt to consumers’ ever-changing requirements.
The payment space is continuing to evolve and we have seen a staggering amount of changes over recent years, with an ever-increasing amount of options available for consumers to choose how they pay.
It’s increasingly obvious that younger generations are driving these changes. PwC found that 70% of millennials believe that the way we make payments will be completely different in five years and 33% believe they won’t need a bank at all.
For businesses, how can they make sure they are still offering easy, secure and accessible payment options?
Consumer behaviour
Knowing a business’s target audience is more important than ever when considering new payment technologies.
Driven by their demand for simplicity and convenience, younger generations are demanding a range of new payment options, most notably in online retailing, as well as e-commerce behaviours, including shopping, money transfers, and daily banking paying activities.
98% of UK millennials manage their money and check their balance using phones or tablets. Further to this, PaySafe revealed 40% habitually use in-app payments whilst 34% pay with a mobile wallet.
Innovative fintech organisations are leading the way by developing interactive and streamlined payment options for consumers. Perhaps the best example is Monzo, whose banking app notifies customers whenever a payment is made, displays easy to digest spending summaries, and payment tracking tools therefore making it easy to keep track of finances.
For businesses, this means that they must move with the times to keep pace with the inevitable change.
As well as consumers expecting fast and accurate payments, instant communication is also a huge factor. Whether it is confirmation emails to certify that an order has been made or an online customer service chatbot, consumers are demanding more from businesses and their payment providers.
If they fail to keep up with these expectations, they will struggle to build long term relationships that keep customers returning time after time.
Subscriptions
Another major change in recent years is the rise in subscription-based payment services. The vast majority of readers will pay for at least one subscription service, which is now available for almost every category from meal kits to gyms and TV and music streaming services to razors.
Subscription services have seen steady growth in recent years. According to Barclaycard, the subscription economy increased by 39.4% year-on-year in July 2020 – and is now worth a staggering £323 million in the UK.
One of the reasons they are proving popular is because it taps into what consumers want – a seamless and convenient shopping experience with a flexible and smooth payment plan.
Subscription-based business models provide many benefits. With agreed pricing set each month, customers know what to expect, and it’s more attractive to join and more affordable. For merchants, a consistent source of recurring revenue from repeat customers makes it much easier to forecast finances. Businesses are able to accurately and reliably predict revenue streams allowing more informed decision-making for the future.
Safeguarding consumers
In our increasingly connected lives, consumers are certainly more aware of fraud, meaning it’s even more important for payment providers to build trust between them and the customer.
Businesses must be alert to the changing levels of threat. It was revealed by the Financial Times that cases of fraud had risen by a third in 2020, reaching more than 410,000.
With digitised payments the preferred option, FCA regulations have provided further safeguards for consumers by regularly updating their unauthorised business list, creating an extra layer of safety for shoppers who benefit from increased awareness of online dangers.
One approach that brings both improved security and meets the requirements of online consumers is integrated payments. Integrated systems link across all software within the business, from payroll to CMS, streamlining operations all in one place without the need to manually enter transactions to different platforms. An added benefit is a proven reduction in processing errors.
Adapting businesses have the potential to fill in the gaps that they may not be aware of and increase customer satisfaction. Creating a fully integrated solution in this way enables better control as well as greater visibility over cash flow.
By adopting cloud-based payment software, organisations benefit from greater flexibility and scalability. Using an API to plug payments into other systems across the business creates an end-to-end solution that pulls payments into accounts. Automating this process improves reconciliation, saves huge amounts of time and focuses on efficiency.
When payments, finance, and CRM software are all available via a cloud-based platform, teams are able to gain a complete view of the organisation, with data flowing securely across the system removing the chance of errors.
This evolution of payments will continue to push businesses to upgrade their system and move in a direction that is quick, easy, and seamless.