Digital payment solutions: where do we stand today?
Le 28 December 2021
The years 2020 and 2021 have been synonymous with digital transformation. As a result of the health crisis, businesses have had to step up to the plate to offer more digital services in response to the increased demands of their customers. More immediacy, more speed and less friction, consumers got used to digital during the confinements and now expect to find these benefits both offline and online.
Payment has not been spared. Indeed, the demand for digitalisation of payments is also rising sharply. Consumers expect more freedom in the payment solution services offered by their merchants. To meet this need, new trends in digital payment solutions have developed. Digitalisation of payments is no longer an option, but a real necessity.
Open Banking: opening up to new payment solutions
Consumers are increasingly looking for autonomy, fluidity and speed on all purchasing channels. As payment is an essential element in the customer experience and loyalty, many payment solutions have been developed: bank cards, electronic wallets, contactless payments. To meet the new needs of consumers, today, new payment methods and means are also booming, such as payment links. But if many innovations in terms of payment solutions are emerging, it is notably thanks to the open banking that has arrived with the PSD2 (Payment Services Directive), which have the common objective of regulating new payment players and stimulating competition and innovation in this sector.
Open banking is the sharing of banking data in complete security. Based on the same principle as open innovation, it allows banks to share their data with other financial sector players such as fintechs (location, banking services, customer data). Of course, the sharing of data is subject to the prior agreement of the customer (signature, etc.). This opening up of banks’ information systems and data sharing enables the development of new payment services such as QR codes, which are already highly popular with consumers.
This possibility of innovation also allows the development of payment solutions such as: payments via mobile application, interactive payments or payment facilities such as “buy now pay later” or split payments.
“Buy now pay later” allows consumers to defer payment for their purchases. Used mainly in e-commerce, the customer will order products and, after receiving the order, will send back what he does not like and will only be debited for his purchases after a certain period of time or after receiving the return of the unwanted products. This payment facility also makes it possible to defer payment of wages. The consumer therefore gains freedom and as a retailer you can boost your sales.
Split payments allow customers to pay for their purchases in instalments. As an alternative to traditional credit, it simplifies the shopping experience and increases the conversation rate and the average basket size. All the customer needs is a bank card and a merchant offering this type of payment solution or a mobile application that allows it.
Payments via mobile apps
The use of smartphones has now become part of consumer usage habits, which has led to the emergence of numerous mobile applications dedicated to payment: Apple Pay, Google Pay, PayPal, Paylib, Lyf Pay, etc. These applications represent a continuation of the contactless payment democratised since the health crisis. These applications make it possible to pay merchants easily and freely without needing to carry a bank card or even to pay off a relative instantly and without recording an IBAN.
Interactive payment means everything that includes “conversational commerce”, which is even more innovative than mobile applications or payment facilities. It is only used for online shops. It allows customers to be accompanied in their purchases by a chatbot. This is a “virtual agent” available 24/7, which accompanies the customer through the entire process and takes them to the payment stage.
The role of Fintechs
Online and offline businesses are benefiting from new creative solutions to improve the payment experience and make it a real asset in increasing conversion and loyalty.
To develop these new payment solutions and meet consumers’ needs, many fintechs have positioned themselves in this field, offering ever more innovative, efficient and fast payment methods.
As a fintech and e-money institution, this is one of CentralPay’s main missions: to offer you more and more innovations in terms of payment solutions.