The era of omnichannel payments is evolving. Purchase journeys are less linear. People bounce from channel to channel, and device to device, in unpredictable ways. Consumers have high expectations around the quality, timeliness, and relevance of payment experiences.
By some estimates, the value of global ecommerce payment transactions will surpass $7.5 trillion by 2026. That’s just ecommerce. What’s remarkable about that number isn’t necessarily the volume, but all the ways people are making those payments.
A Day In the Life: So Many Ways to Pay
At the convenience store on the corner, a college student is using her iPhone to pay for potato chips and soda with Apple Pay. The person standing behind her will come home to a timely email containing a discount code for those sneakers he wants. And who hasn’t come across those eerily personalized retargeting ads on Facebook?
Taken together, the variety of experiences and marketing touches that lead to a purchase decision are endless. With that many variables to account for, businesses now need to integrate myriad payment options, including:
● Mobile payment apps (Cash App, Venmo, PayPal, Zelle, Google Pay)
● Online electronic payments (bank transfers, eChecks, buy-now-pay-later solutions)
● Mobile wallets (Apple Pay, Samsung Pay, Google Pay, Cryptocurrencies)
● Contactless payments (cards with NFC, mobile wallets, smart watches)
If omnichannel payment experiences are on your company’s roadmap, here are nine trends that will influence the success of your strategy.
1. Widespread Adoption & Differentiation
Among the merchants, retailers, and other businesses we work with on a daily basis, we see considerable appetite for finding and adopting suitable payment platforms. We see far more selectivity, too. In Merchant Payment Providers: Key Takeaways From The Forrester Wave™ (Q3 2020), Senior Analyst Lily Varon cites four traits that will differentiate merchant payment providers:
● A globalized approach
● Rich and diverse payment flows
● Pace of technological innovation
● Transparency
2. The Important Role of Analytics
When people interact with different payment channels, they create tremendous amounts of data. Today’s category leaders use this data to continually optimize purchase journeys, all while leaving as little revenue on the table as possible.
Of course, automating data-to-delivery pipelines is easier said than done. Large ecommerce enterprises, for example, create massive amounts of data stored in multiple silos. Successful transactions. Failed payments. Sales and retail KPIs. The list goes on and on.
The challenge is making sense of this data—deriving useful insights that drive business outcomes—all while ensuring quality, trust, and access. Advances in artificial intelligence and machine learning can help. Which is why it comes as little surprise that the IDC expects global revenues for the AI market to surpass $500 billion by 2024.
3. The Emergence of Text to Pay
This is a budding space with a variety of consumer and business applications. Paying by text is ideal for on-the-go consumers whose day to day is a chaotic mix of devices, messages, alerts, and notifications. We all have phones now (at least 97% of Americans now own a cellphone of some kind) and most of us text every day.
What’s more, there’s growing desire, engagement, and demand for SMS and mobile-first experiences. When shopping online, 56 percent of consumers use mobile. According to the same research, 91 percent of consumers “are interested in signing up for texts, but not all businesses offer it yet.”
This might prove to be a huge opportunity. A secure text payment solution can help people pay on time, pay faster, and get timely reminders (among other benefits). From where we sit, security, simplicity, and integration with third-party services will be central to any pay-by-text solution.
4. Buy Now, Pay Later (BNPL) for In-Store and Digital
For better or worse, consumers can take a quick loan on almost anything—even burritos. It’s called buy now, pay later (BNPL), one of the fastest growing payment types in the world. In fact, FIS predicts that BNPL will account for 4 percent of global eCommerce spend by 2024.
If this prediction holds true, BNPL will find its way into even more purchase experiences—and remain a prominent part of the omnichannel payment landscape.
5. Proximity-Based Consumerism
Back in 2015, Elle magazine famously used beacon technology to generate 500,000 retail store visits. Target did something similar. In essence, these retailers generated proximity-based app notifications. Once the recipient arrived in the store, they received additional notifications with, for example, a promotion.
It’s a notable innovation, one that involves the merchant’s point-of-sale (POS) system, mobile apps, and the integration of contactless payments. To deliver and capitalize on this kind of hyper-specific consumer experience, companies will need to seamlessly integrate mobile payment processing.
6. Payment Security
Both consumers and merchants have a shared interest in secure payment experiences. On the one hand, consumers won’t use a payment method based on their perception of its security. And businesses must constantly defend against various forms of fraud, cyberattack, etc.
Because security threats seem to multiply daily, most reputable vendors rely on a scalable, multilayered approach. Indeed, payment processing vendors must consider a variety of security measures to safeguard their customers, including:
● Tokenization
● Intelligence and analytics
● Integrated address verification
● Multi-factor authentication
● PCI-DSS compliance
7. Social Media Shopping
Convenience matters to consumers. What’s more convenient than social media, where people today spend so much of their time? One survey found that 54 percent of people find new products on social media at least once a month. Facebook, Twitter and Instagram are all developing payment rails on their platforms. And while data suggests this trend has yet to take hold at scale, it’s certainly something to keep an eye on.
8. “Offline” Experiences
Remember when “offline” consumer experiences were actually offline? Today, few of us are far from a smart device, even in our own homes An IoT refrigerator, for example. Or Google Assistant. Remember Dash Buttons?
All of these experiences are predicated on connectivity and real-time, hyper-personalized purchases. Your refrigerator not only reminds you that you’re low on milk, but gives you a way to order it on the spot. Your printer ink subscription automatically mails you new cartridges based on your usage patterns.
Moving forward, payment options must be integrated to these so-called “offline” experiences, too.
9. Returns
Yes, returns. They’re a critical part of the consumer journey, at least according to Doddle’s US consumer insight survey 2020:
● 84% consider the returns experience to be important
● 74% think retailers’ return experiences could be better
● 83% shape their opinion of a retailer based on delivery and payment
Today, payment processing is deeply embedded within digital returns. Payment processing is embedded in how online businesses process returns, issue refunds, void transactions, cancel orders, replace items, and so on. Across most of these experiences, the end user will be asked to at least verify their payment method. And the return phase of a digital journey is hardly the place for additional friction.
Bringing it Together: A Truly Blended Experience
As these nine trends reveal, commerce experiences and the ways people pay are closely tied. For merchants, retailers, and other businesses, “bringing it all together” remains a considerable challenge—especially on a national or international scale.
Still, the high-level prerequisites for a truly blended commerce experience are clear:
● Integration (i.e., the seamless integration of all operational commerce channels)
● Engagement (i.e., being there when, where and how consumers expect)
● Connectedness (i.e., threading different experiences together)
Without well orchestrated omnichannel payment processing, businesses will find it difficult to blend their commerce experiences the way modern consumers expect.