Hiroyuki Sato CEO of Docomo Digital
Payments are essential to the success of any merchant. Therefore, dedicating time to finding a payment partner that best suits the individual needs of a company in today’s mobile commerce ecosystem is vital to ensuring the business is able to thrive within its desired market.
However, it seems that many companies are still failing to treat this as a fundamental element of their business strategy, despite the fact that an efficient payment system can determine whether an organisation retains both its users and market stake. The growth in the number of devices used throughout the day and the uptake in alternative payments methods have created an environment where customers expect a variety of payment options from merchants in order to meet their needs and preferences.
Merchants and service providers can remain competitive, and enhance customer experience and conversion across connected devices with better payment options. This is widely acknowledged. However, the main stumbling block in deploying an innovative and efficient payments ecosystem often comes with picking the right provider.
There is no time like the present
Timing is everything and there has never been a more important time when it comes to ensuring a merchant’s payments offering is optimised and future-proofed than now.
The latest research from Ecommerce Europe found that the e-commerce business-to-consumer turnover across the continent increased by 15 per cent to €530 billion in 2016. For 2017, it is forecast to reach around €602 billion, at a growth rate of nearly 14 per cent.
In terms of the payment methods being used, the proliferation of e-wallets is continuing with services such as Apple, Samsung and Android Pay becoming more popular. Furthermore, the number of users choosing to pay via mobile is expected to amount to 663.8 million by 2021, according to Statista.
The payments landscape is rapidly evolving and one of the main factors driving this is PSD2, or the Second Payment Services Directive, formulated by the countries of the European Union. It was initially deployed at a European level in 2015 with members of the EU gradually implementing the directive ahead of the 2018 deadline.
PSD2 marks a significant shift in the industry and its uptake in Europe is likely to drive more SEPA Credit Transfer (SCT) payments, making it simpler for merchants and their customers to initiate payments online and via mobile. In turn, it is also set to increase the SCA (Strong Customer Authentication) security layer, changing not only how we pay online but also what information we see when making a payment. This progression is great news for users, and merchants need to be prepared for these changes in order to reap the benefits.
Waking up to the potential of alternative payment methods
Just 42 per cent of global online shoppers used credit cards for their purchases, according to a recent survey by the Centre for International Governance Innovation and Ipsos, meaning merchants could miss out on a significant amount of business at the checkout that by not offering a choice of payment methods.
When integrating new payment methods, selecting the right partner can have a big impact on results. The right provider will ensure customer interactions are fully optimised at every step of the m-commerce conversion funnel. Merchants and wider companies need to pick a payments provider that can deliver a broad range of offerings to streamline activity whilst continually looking for new ways to innovate whilst staying competitive.
Selecting the right payments provider
Merchants can now work with partners that connect the entire e-commerce value chain, which eliminates the need for multiple integrations, tools and interfaces, helping them to quickly and easily scale up cross-border sales and grow internationally. When choosing a partner, merchants should look out for the following offerings provided via an application programming interface (API):
Digital marketing: Customer centricity empowers merchants to target the right customer with the right channel and right message, at the right time. It also helps them to align around a strategy that will drive long-term value to the business: acquiring high-value customers and keeping them coming back.
Payment facilitator: One single implementation to access a full-service smart solution dedicated to boosting e-commerce business, including cash management, settlement and invoicing, split payments, compliance and regulatory coverage.
Financial services: One contract accepting all payment methods, including open invoice and instalment payments with no risk and guaranteed payouts, international roll-out, settlement, invoicing and VAT management.
E-wallet services: A digital tool which allows customers to store their payment methods and make electronic transactions is becoming increasingly vital in the payments toolkit.
Direct carrier billing: The support of payments for digital goods such as ticketing (transportation, events, parking) and physical goods in specific territories where this can be supported.
Working with a partner that can offer this broad range of services will allow merchants to simplify their payment ecosystems, whilst ensuring their customers are fully serviced.
The payments sector is moving at a rapid pace and this is expected to continue in the near future. As a result, partnering with an organisation focused on innovation should be at the heart of merchant’s decision-making process. Look for providers that are keeping an ear to the ground when it comes to expanding customer expectation and technological innovations. This will help to future-proof businesses and ensure they remain competitive.
Merchants and service providers should at least be considering alternative distribution methods, and they should look towards aggregators to help them develop direct relationships with telcos and OEMs that are needed to take their business to the next level.
