There are changes driven by choice, and there are changes driven by necessity. In the world of payments and commerce, the pandemic has produced both. It has forced all kinds of companies – younger companies, well-established companies, national players and international conglomerates – to quickly create or accelerate their digital journey.
These trips have taken various forms. Some have cemented and connected ecosystems. Some have built online platforms and brought stakeholders together while monetizing interactions. But taken together, it’s clear that payments are quickly becoming the fuel that “powers” digital transformation.
Leveraging the power of payments to help shape new business models is one way to weather the pandemic. It can provide the motivation to emerge on the other side of this public health crisis ready to respond to consumer demands that companies meet them where they want (online, in-store or a hybrid of these conduits) and pay. as they wish. Pay.
We asked 35 executives about how the pandemic has changed the way they think about payments. We asked them how payments can be integrated into the continuum of commerce, invisible in some cases, adding value in others. Merchants need to meet consumer expectations for a unified, sometimes contactless (perhaps even leading to the super app) commerce experience, according to our respondents – or suffer the consequences. Their answers are compiled in our new eBook, The energy source of the connected economy, CEO Edition.
Cryptos and beyond
Cryptocurrencies, of course, may be the most obvious new loophole in the payments firmament, where some proponents note that the inclusiveness of payments in times of economic crisis can be boosted by these digital coins, giving unbanked populations and underbanked easier access to digital transactions.
But beyond these payment mechanisms, overall, advanced technologies are helping businesses connect payment methods to the digital profiles that consumers themselves create as they interact with devices and merchants – which In turn, enables targeted and contextual advertising and promotions (and even sales support), supporting this move towards unified commerce, and new options at checkout, like buy now, pay later.
As for how payments can change the financial services ecosystem itself, observers have noted that payments could represent a significant percentage of consumers’ interactions with banks and credit unions, thereby opening up revenue streams. additional. Payment authentication and verification efforts will need to improve as much of the activity between buyers and sellers, senders and recipients of payments takes place online. A buzzword that transcends the payments themselves, or initiates or obtains them: speed. We are moving into the era of real-time payments (more commonly known as RTP), where funds flow with instant confirmation, where consumers pay their bills just in time, and where businesses themselves have better visibility / management of payments. cash flow in one day. day by day.
Embracing payment transformation also means embracing the back office changes needed to facilitate those payments (which in turn means engaging treasury departments in their own digital shifts). Nowhere could this be more evident than in the business-to-business (B2B) space – ripe for change, according to our observers – where cross-border payments and the lack of transparency (not to mention paper checks) are still hallmarks. B2B companies, according to respondents, are now turning to recurring revenue models, while in commerce in general, the direct-to-consumer (D2C) model exists as a long-term strategy.
Digital acceleration may have progressed several years rather than months in the midst of the pandemic. But that shows no signs of slowing down, or creating enhanced omnichannel experiences with payments as a frictionless part of the process, no matter how invisible they are.
NEW PYMNTS STUDY: SUBSCRIPTION TRADE CONVERSION INDEX – APRIL 2021
About the study: A third of consumers who signed up for subscription services in the past year were just there for the free trial. In the 2021 Subscription Commerce Conversion Index, PYMNTS surveys 2,022 U.S. consumers and analyzes more than 200 subscription commerce providers to focus on the key features that turn ‘subscription curious’ into persistent, long-term subscribers. term.