Transforming Customer Experience with Payments
Thanks to the emergence of services like Netflix, Uber and Amazon, which place customer experience at the centre of their proposition, consumers now expect a frictionless experience when they shop with all retailers. It’s no longer acceptable for payments to be overly complex and make the purchasing journey inconvenient.
One of the key ways retailers and businesses are working to enhance the customer experience when it comes to payments is through embracing embedded finance products. With even a small payment issue leading to customers not completing their purchase, the importance of getting payments right is major.
In an increasingly competitive marketplace, retailers who invest in innovative embedded finance solutions are well-positioned to meet often complex and ever-changing customer needs. With research from cloud banking platform Mambu finding that embedded finance will be worth $3.5 trillion to the global retail sector, it’s clear retailers have a lot to gain from embedded finance solutions.
There’s no question that the rise and rise of buy now pay later (BNPL) solutions have played a central role in supporting retailers across the world to better meet customer needs. In the past, customers on limited incomes would have faced challenges purchasing certain items and may have had to save up to buy a new jacket or home goods. But BNPL made it extremely easy for such customers to buy the item today and spread the cost over a few weeks or months.
Not only has BNPL improved conversion rates for retailers, as customers are empowered to make purchases that they otherwise would have put off, but the efficient nature of BNPL services contribute to shoppers being loyal to the retailer and becoming a repeat customer.
The unrivalled data insights that BNPL offers to retailers can also enable these businesses to create more personalised offers and deals for customers and understand their consumers on a more granular basis.
Innovations in the embedded finance space also open up new consumption patterns for retailers. As personalisation is increasingly important to consumers, embedded payment methods that enable retailers to offer flexibility to how their products and services are purchased will likely become more popular.
For example, supermarkets and food delivery companies are now able to shift delivery slots at almost a moments notice for customers and the payment solution will be able to keep up to date with these changes and update the price accordingly.
Retailers who have adopted embedded finance can also gain new insights into their customer base through the data receive about customers and use this to improve the experience. For example, electric car maker Tesla now offer new-car buyers in California the opportunity to buy insurance directly through the company via embedded finance.
Customers benefit as they are able to seamlessly get their vehicle insured, while Tesla gains a new revenue stream and also receives new data about customer insurance claims which can be used to aid them in the manufacturing process.
The opportunities are both exciting and considerable. We will continue this discussion at FTT Embedded Finance & Super Apps on 26th April, London, where we explore how retailers (and other non-financial brands) can introduce embedded payments among other offerings, in their digital ecosystem. Register now to join our community as we explore the key trends, technologies and innovations that are driving embedded finance & super apps in 2022 and beyond.
Written by Finbarr Toesland, Editorial Contributor, VC Innovations