I see many of the changes in the online payments industry impacting what businesses will have to consider when they add or manage their payment processing systems. This is especially the case for startup founders like myself.
The information presented below is based on findings from the customers who use our payment processing platform, and is focused on insights and trends in the type of online payments being used. Many of our customers also deal with offline payment issues that illustrate just how integrated these environments have become.
Contactless, EMV or Both?
Customers have noted their struggle to figure out what to adopt as some of their patrons prefer the contactless method, using digital wallet tools to complete sales without having to pull out a physical credit or debit card, while others like to use physical cards and are looking for the security that EMV chip readers provide them. Some digital wallets are now starting to support online payments as well, making it more of a struggle to select one over the other in terms of payment acceptance equipment.
Some financial institutions are developing EMV chip debit cards that have contactless payment capabilities, which means there is no need for swiping a payment card, bringing together the best of both technologies. With more people accepting these new payment technologies, it’s important to assess how you can add these methods to your own business, including enhancing your marketing effort through your own branded mobile wallet feature, loyalty and reward program, or membership format. A wide range of payment processing companies, including my own, offer solutions so you can add an EMV machine to your physical store or add software to accept contactless payments.
Simplified and Mobilized Payment Processes
With more people preferring to conduct their transactions through their mobile devices, including paying for their invoices and completing e-commerce purchases, businesses have to ensure that they optimize for the mobile screen. That means simplifying the navigation process for those looking to make their payments and creating an easy-to-read design that is mobile-responsive.
Don’t make it so your customer has to pinch and expand the image on the screen just to read what they are paying for and how to complete the transaction or have certain information fall of the page. You also don’t want to scare them by sending them from your website to a separate payment website, as this will discourage them from finishing the process. Instead, make it as easy as possible so that filled shopping carts are not abandoned and invoice aren’t left to collect virtual dust.
The Rise of the Sharing Economy Will Propel Peer-to-Peer Payments
While you may already be aware that the sharing economy is taking center stage in 2017 and beyond, it’s important to align your payment process with this trend. People are used to sharing services and goods to make life more convenient and get more bang for their buck. And, with most people also used to making some type of digital payment, the expectation that payments can be split up many different ways means you’ll have to think about adding peer-to-peer (P2P) payment acceptance where many people pay for that one service or item. The P2P payment system has functionality that lets customers designate who will pay for what part of a bill.
Previously, you may have had to key in different card numbers when a party wanted to split the tab two or three ways. Now, you’ll be able to receive a payment just with a phone number or email address, allowing various customers to pay you directly instead of having to split it up amongst themselves. Right now, it hasn’t yet been adopted as a real business payments option, but as this example shows, it could easily head that direction.
Unique ID for Cross-Channel Purchases
More clients we work with are telling us that they must work across channels because their customers like the ability to use any online and offline channel when the mood strikes them. This is tied to the growth in the on-demand trend: Consumers may want to buy online and pick up an item or use their mobile devices while shopping in a store to pay for an item they see there so they don’t have to stand in line.
To solve this dilemma, payment solutions providers are working with other developers on the concept of a unique ID for each customer in order to synchronize all touch and pay points for a single platform. This will make it easier to accomplish the on-demand trend while ensuring that, as a business, you can maintain a consistent payment, inventory and service experience. A complete solution for this approach has yet to be developed, especially since there is a debate around ownership of the data now is being used across channels and how is it protected.
More Options for High-Risk and New Business Segments
While you may have a great business concept and you know there is a target audience for it, compliance and regulatory issues have pegged you as a high-risk business, making it seemingly difficult to tap into the type of payment acceptance options you need to realize the revenue potential.
The good news is that there is a trend toward identifying the new business segments and models that can drive future growth in the payments industry, so new solutions are being developed to help all types of businesses – from startups with founders that have no established credit to new platforms like crowdfunding and marketplaces to international customers.
Author: John Rampton is the founder of Palo Alto, California-based Due, a free payments company specializing in helping businesses bill their clients easily online.