With increased mobile phone penetration, a rise in digital banking is a natural progression. Like any other channel, digital banking has evolved over the years, and unlocking its potential is a key to delivering exceptional customer experiences. Tailored innovations—including digital receipts, subscription management tools, and advanced chargeback systems—are reshaping the way businesses connect with their customers. These innovations not only enhance digital interactions but also dramatically reduce fraud, leading to fewer customer service calls and chargebacks.
In a recent PaymentsJournal webinar, Chris Rimple, Vice President of Product at Mastercard; Alison Betts, Vice President of Global Merchant Processing & Disputes at American Express; and Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research, delved into the findings from Ethoca’s 2023 Field Guide: What Consumers Want From Digital Banking to determine what consumers seek from their banking experiences. The executives also discussed the state of the digital landscape and offered practical tips that businesses can use to navigate the ever-evolving space.
The Shift to Digital Banking
Consumers expect an omnichannel experience when it comes to banking. Whether they choose to engage with their bank online, inside the branch, or on their mobile device, an omnichannel experience offers customers a seamless experience as they easily switch between channels.
“We really like to see technology moving in this direction where we have consistency across devices,” Betts said. “That’s a really important customer experience, not just for card members but also for merchants.
“Digital channels are helping us capture relevant details that we can share with our customers, and that’s where digital receipts have become so critical for us. They give card members line of sight into what they bought, whether on their mobile app or they’re logged in on their laptop. They can actually click on a digital receipt, identify what it was they purchased, and it helps to deflect some of their confusion on their transactions.”
The Growing Preference for Digital Receipts
Ethoca found that consumers tend to gravitate toward four specific features within their digital banking apps, including digital receipts, subscription management, offers and coupons, and the ability to request a refund.
Digital receipts, in particular, continue to influence consumers’ overall banking and retail experiences. Roughly 88% of respondents said they prefer a digital receipt, and 68% said they were willing to give out their phone number or email address in exchange for a digital receipt. Moreover, 50% of consumers who received a digital receipt said they prefer it over a paper receipt. Younger cohorts were far more likely to prefer digital receipts.
“Digital receipts really address the fact that people have a lot of purchases and frequently for small amounts,” Betts said. “I think about my own credit card statement. It’s a heck of a lot longer than my parents’ credit card statement was due to subscriptions, auto repurchases, and daily expenses.
“And it’s a lot harder when you’re looking at so many transactions. Digital receipts [is] a single point of reference. It’s reducing the number of accounts that somebody has to go log into to make sense of their finances because it’s all right there in front of them. So, they can do everything in their app directly.”
Facilitating Subscription Management
Subscription management was another key feature consumers are increasingly requesting. According to Ethoca’s findings, 85% of respondents want to manage their subscriptions through their banking app. Having the ability to pause their subscription through their banking app was also important for 57% of respondents, and slightly fewer (52%) said they would like the ability to cancel their subscription in their banking app.
Rimple explained that by having subscription controls featured within a digital banking app, customers can have more visibility and control over their subscription payments. By giving cardholders more insight and control over their subscription payments directly within the bank app, you’re giving them more control over their finances and making sure any requests about a subscription—inquiry or even a cancellation—goes right to the merchant instead of the dispute process.
How Are Subscriptions Affecting Business?
When it comes to subscriptions as a business model, more businesses are jumping onto the bandwagon and adopting the model to bolster their revenue.
“We have a formal forecast on recurring payments and subscriptions, and the estimate that Javelin makes for recurring payments and subscriptions is that it’ll pass the $800 billion mark by 2025,” Riley said. “So we’re talking about a lot of transactions with a wide range.”
“Actively managing that relationship with the customer is essential. (When) we’re talking about that kind of volume, being able to make sure things fit and being able to reinforce the business name comes into play. It absolutely helps with the disputes and managing that process.”
Although subscription-based business models cross a wide range of industries, they all have their challenges, such as chargebacks. With a “request a refund” feature, customers can connect with the merchant if there is a problem, minimizing consumer calls to the bank, which can ultimately become a dispute. Ethoca found that 50% of respondents would be interested in this feature.
Businesses looking to adopt a subscription-based business model need to anticipate and prepare for potential roadblocks.
“We see a lot of recurring transactions/subscriptions turn into disputes,” Betts said. “And we know that’s not the appropriate mechanism for managing your subscription because it’s not giving any clear indication to our merchants that the consumer wants to change their subscription terms.”
Enhancing the Digital Experience Can Benefit Businesses in the Future
There’s no question that customer retention depends greatly on the customer experience. That’s why adopting a digital experience to meet customers where they are is key.
“These new technologies and services that we’re seeing have the potential to really change how both our card issuers and merchants manage customer relationships,” Betts said. “It moves the dispute process upstream, helping to reduce unnecessary disputes, which is a much easier and faster process for consumers.”
Merchants that leverage emerging technology have an opportunity to be in direct contact with their customers.
“It’s hard to make a business case not to digitize your payment receipts, but it’s a natural outgrowth of so much that we do,” Riley said. “When you put yourself in the customer’s shoes, it makes life a lot easier.
“For the merchant, being able to have that extra touch with your consumer to keep satisfaction high is important, and that does blend into disputes, which is a direct cost save for all parties.”
