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Financial technology, or fintech, is seeing a surge in growth. Fintech investment has more than tripled over the past three years, according to a recent study by Accenture, rising from $928 million in 2008 to $2.97 billion in 2013. One of the areas fuelling this growth is the advancement in, and demand for, new payment technologies.
The internet and worldwide usage of smartphones has pushed transactions between consumers and merchants far beyond cash exchanges or the once innovative technology of debit/credit cards. Both online and offline consumers are demanding safer and more convenient ways to purchase their products. The growth of technologies such as Apple Pay, are a clear sign of this demand from consumers; a payment technology which is on the verge of being accepted by more brands in more countries.
Due to exploding demand in an array of payment processing technologies, and merchants wanting to keep up in order to provide the right shopping experience for their customers; both online and offline retailers are relying on payment processors more than ever to provide the technology and merchant accounts needed to keep customers happy. “Consumers are demanding mobility, transparency, instant access and competitive products” because of the new wave of fintech innovation.
Physical and eCommerce stores can’t invest in such technology systems on their own and therefore what retailers want, are payment processors who can provide this technology for them. Finding the right payment processor and beginning a relationship with them can seem a daunting task for many retailers though.
Stores must provide the most up to date and popular payment methods to encourage browsing visitors to buy and to keep customers returning. A familiar, trustworthy and convenient payment processing option is crucial for creating trust and providing a positive shopping experience.
A commitment in the latest technology often means a costly cut in margins however; a cut which more often than not goes to established fintech firms with, what retailers consider, stringent pricing and contract terms. Guide prices and an understandable idea of the options which retailers have are often unclear on payment processor websites. What retailers want is for companies in the fintech industry to act upon this and fintech firms need to if they want to continue to vie for the business of online and offline merchants.
Deciding on which payment processor to work with is a painful process in itself for retailers. The easiest way to gain accurate information on whether a payment processor is right for them is by calling a sales representative – a situation which some retailers (particularly those who are inexperienced) will find daunting and off putting.
Start-ups in the industry, such as Stripe, are offering a clearer and more efficient communication of their fees and contract policies. These venture capital funded businesses also often come with quicker verification and set-up processes (particularly for online payments), causing less hassle to the retailer.
Both newcomer and incumbent (such as Worldpay) payment processors are providing quality services, but retailers are starting to demand more from the growing fintech industry.
Not only do online and offline merchants demand the ability to offer new payment technologies to their customers but they also want to do so at a reasonable price and they want the experience of interacting with their payment processor to be convenient and transparent from the start.
As retailers must adapt more frequently to keep up with the latest technology, both old and new payment processors need to consider how their services are being viewed by merchants, if they want to continue to compete. Payment processors are a necessity for most retailers but unclear pricing or a negative experience with fintech firms will leave a bad taste in retailers’ mouths.
Evaluating your current payment processes is just one of the ways you can increase your ecommerce conversion rate, generate more leads, and get that basket abandonment in check.
With increased competition in the fintech industry, now more than ever, payment processors need to focus on what retailers want; not just the right price, the right product and the right customer service, but a winning combination of all three.
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