In the context of increased competition and unprecedented digitalisation accelerated by the Covid-19 pandemic, technology has evolved and the consumer is ever-more demanding. It’s getting harder to attract new customers, especially Generation Z and Millennials, and retain them as loyal users. What we are learning is that companies need to demonstrate a level of innovation and agility to keep up with ever-changing technology, and how they are influencing the landscape of payments.
There has been a significant growth in contactless, mobile and internet banking payments, alongside a continued reduction in cash usage. As a result of the pandemic, for the first time in six years, the total number of payments declined, falling by 11% in the UK. However, contactless increased by 12%, forming 27% of all UK payments.
Understanding what consumers like
The younger generation are more likely to choose the digital or cashless way of payments. This trend seems evident among millennials and zillennials that are digital natives. Their mobile phones are an extension of their bodies and minds, and they tend to concentrate all their activities in them. This context has produced a hypercognitive generation that is very comfortable with collecting and cross-referencing many sources of information, and they are most likely to engage with new ways of digital payments such as electronic wallets, payment links and digital banks.
To start attracting and engaging today’s customers and new generation of consumers, payments need to be simplified and enhanced to deliver the best user experience. Payments is the beating heart of all businesses and it is central to customer experience, so companies have no option but to evolve to keep up with customers’ requirements.
User-centric approach is powering business
There is a strong demand for trust and security embedded in every transaction a consumer carries out. Users make a vote of confidence every time they choose a payment option and, in most cases, the choice is due to familiarity. Knowing the consumer means understanding their culture, their way of living and their most common activities. In-depth research into the key consumer motivations to choose a payment option is paramount to understanding them. Speaking their native language as well as providing them with the most renowned local payment methods generates a sense of closeness and engagement.
It is why we believe that user-centric payment is powering businesses. It is no longer the secret ingredient in the success of a business. Preference to pay is also different in countries. It is only when we look at the context and consumer profile country by country that we can start to shape our business and product development strategy.
With so many options available, payments solutions need to provide the best user experience to convert sales and retain customers. Delivering a journey that is as natural as possible to customers and that requires only a few clicks to get the transaction done is no longer an option, but mandatory.
What’s next?
There is a need to remove all traces of friction at the checkpoint to increase conversion rate and avoid losing users during the payment procedure.
By adopting a user-centric approach, it will reveal the insights needed to create a truly seamless experience. Merchants and users are open to changes in financial services, with a substantial need for instant payments that avoid complex transaction processes involving multiple parties.Technology and payment solutions should keep up with ever-changing user preferences. Those who manage to combine a secure environment and a smooth checkout experience are the ones to achieve better results.
