Since the introduction of ecommerce some 25 years ago, digital retailers have pursued a form of internet efficiency that has fostered fierce online competition. With every technological development, internet transactions progress yet closer towards a frictionless marketplace. The global pandemic has further accelerated this trend. As more consumers opt for online over in-person retail, the move away from physical cash has been accelerated.
With the state of commerce post-covid, retailers and those working within the financial sector are more focused on digital transformation and the frictionless user experience. The desire is to create a system that works at peak efficiency, moves faster, and is future-proof. Cashless payments are an essential part of this transformation.
The rush to digitization has seen digital payment take center stage. However, with extra layers of payment complexity comes a considerable burden on merchants to provide a transaction process that is both expedited and highly secure. To stay competitive, companies are required to minimize payment friction, maximize convenience, and promise data privacy.
Payment collection is a highly innovative and constantly evolving industry. To meet consumer expectations, it is vital that businesses keep up to date with the latest innovations and offer well-designed checkout processes that optimize convenience and combat fraud.
Here is an explanation of frictionless digital payment, why you need it, and how you can begin to integrate it into your online payment collection processes.
What Are Frictionless Digital Payments?
Frictionless digital payments replace the traditional checkout experience with a faster and simplified process. Essentially, they minimize the barriers to making a digital purchase by collecting customer data, to supply a tailor-made shopping experience.
Beginning with the likes of contactless card payments and digital wallets, frictionless digital payments have expanded and integrated with new technological offerings. Nowadays, a digital payment can be an in-app purchase, an auto-renewing subscription, or even a one-click payment.
A frictionless payment is one that seamlessly integrates opportunities for purchase within a consumer’s everyday buying habits. The aim is to boost customer retention by promoting convenience at the forefront of the payment collection process. With a new generation of consumers emerging that values ease of use above all else, frictionless payment is a driving force for increasing revenue.
As mobile contactless payments are forecast to surpass $1 trillion globally in 2022, consumers have come to expect increasingly sophisticated and flexible payment methods. The businesses that will stay ahead of the curve are those that can learn about and experiment with their mode of purchase.
With the emergence of artificial intelligence, machine learning, and cryptocurrency, technology can drive productivity when it’s integrated correctly. Just as analytics derived from your customer support platform or business VoIP solution can be valuable in providing data-led insights into customer satisfaction, frictionless payments also collect statistics that can inform long-term retail decisions.
Why Do You Need a Frictionless System?
In today’s world of fast-evolving payment methods, a company that fails to incorporate frictionless solutions falls short. A fractured shopping experience can lead to cart abandonment and reduces the likelihood of return customers. By contrast, a cohesive shopping experience that takes advantage of new technology to address consumer issues will elevate your brand reputation.
Taking the initiative to incorporate frictionless digital payment methods shows customer appreciation. It demonstrates that you have heard your consumers’ concerns and are taking action to address them. Such personalized customer care can be what stands a business apart, operating in such a crowded digital marketplace.
Much like in a VoIP vs PBX comparison, the nature of your chosen digital payment system can dictate its cost. While some methods are more cost-effective than others, each will generate significant savings over time by enticing consumers to follow through on purchase decisions.
Be it a device-initiated payment or recurring purchase, your businesses should pick the solution most suited to its target customer.
What Are the Key Features of a Frictionless Digital Payment?
The most crucial feature of a frictionless digital payment method is that it reduces the steps necessary to process a purchase. This means cutting back on unnecessary and time-consuming form filling, entering repeat details, or requiring a rigorous registration process before allowing customers to checkout.
With solutions like one-click purchase, details are auto-filled based on pre-supplied payment and shipping information. There is zero necessity for any manual input.
The best frictionless payment systems will also provide an omnichannel experience, allowing your business to meet its buyers across multiple platforms. Having a mobile presence is essential for a smooth customer journey. It means that users can engage with your brand at their convenience and make seamless purchases when it suits them.
Hyper-personalization is another feature, incorporated within digital payments. Bespoke payment options can make the process easier for individual consumers based on their unique needs. Using computer vision technologies, AI, machine learning, or a simple infographic tool, a checkout process that considers purchase histories and product preferences can convince consumers to see their basket through to checkout.
The value of global digital payments is projected to reach $6.6 million by the end of this year. Here’s how you can get involved:
1. Mobile Wallets
Mobile wallets are a credit card alternative, storing a customer’s payment methods on their mobile device. They either exist as a built-in feature on a smartphone or can be downloaded as a standalone app, supplied by retailers. They can store credit card and debit card information alongside coupons and reward cards and therefore have the potential to track loyalty schemes.
Mobile wallet transactions are often heavily encrypted and so are a particularly appealing frictionless payment option for consumers that are concerned about the security of their financial information.
Ultimately, they have low processing fees and significantly reduce payment time. Thus, they improve the consumer experience while also increasing their mobile engagement with your brand.
2. Mobile Apps
A mobile app can provide a frictionless payment method for your customers, both online and in-store. Online purchases can be made and paid for directly through your app, while QR code scanning can be utilized in-store to streamline the checkout experience.
Integrating multi-factor authentication adds to your customer’s secure payment experience and push notifications can drive up engagement with your online store. If the checkout process on your app is faster than via your desktop site, more people will use and pay for goods via its integrated services.
As consumers become more comfortable using mobile apps, more will embrace them as a viable digital payment solution. Creating a mobile platform will allow your business to cash in on predicted growth in the mobile payment industry, immediately.
As previously mentioned, click-to-pay or ‘one-click’ purchases represent the pinnacle of frictionless digital payment solutions. They require one-off form filling, saving consumers time and benefiting ecommerce businesses insofar as they cater to impulse purchases.
Introducing one-click functionality that is optimized for use with any device allows your company to align more directly with modern online shopping preferences. It gives buyers greater accessibility to your products and minimizes their effort in interacting with your technology.
With Amazon’s patent for 1-Click technology having expired in late 2017, it is set to become a ubiquitous payment method across multiple industries.
4. Click and Collect
Buy online, pick up in-store (BOPIS) is a frictionless payment method that connects your online and in-store customer experience. Put simply, it lets users order an item for collection at their nearest physical store and therefore avoid potentially lengthy or costly delivery.
This type of service allows for small and medium-sized businesses to remain competitive with retail giants whose operations exclude brick-and-mortar locations. It can also facilitate a more efficient returns process and reduce labor costs.
Click and collect is a digital solution that reduces friction both online and in-store, enhancing the consumer experience in both instances.
5. Voice Ordering
Voice-activated technology is an emerging trend in ecommerce and servicing industries. Indeed, it is one of the fastest-growing sectors within touchless technology.
As a frictionless payment method, it has the added benefit of being a multitasking and hands-free solution that is both easy and intuitive. This means it provides greater accessibility to consumers that might encounter difficulties making purchases through conventional online platforms, such as those with visual impairments.
It can also be a method by which customers can contact you directly, should they encounter issues making a payment. Voice ordering can incorporate customer support solutions that reduce the friction of making a purchase. Consider forwarding voicemail queries directly to customer service teams that can guide consumers through the purchase process.
What Are the Benefits of Frictionless Digital Payment Solutions?
Frictionless payment methods are beneficial for both customers and retailers. Meeting customer demands and streamlining your payment solutions offers multiple advantages both in the efficiency of your workflow and securing increased revenue.
Here are the main ways frictionless digital payments can help you:
a. Fewer Abandoned Carts
In 2020, 88% of all online shopping orders were abandoned. A complicated or time-consuming checkout process contributes to this statistic. Consumers are more likely to discard a purchase mid-checkout if a lengthy payment method affords them the time to reconsider.
Frictionless digital payment methods aim to improve conversion rates and reduce the number of interrupted payments, with a streamlined process. The more times you ask a customer to complete their details or enter their address, the more likely they are to abandon their purchase. Frictionless methods that auto-fill these details will improve the likelihood of customers completing their transactions.
A clean and simple checkout process is an effective solution. Consider incorporating a checkbox that allows for shipping information to be auto-filled when it matches the billing address. Additionally, offer online payment systems alongside credit card payments when available. The more flexible your options, the more beneficial to consumers.
b. Increased Customer Loyalty and Satisfaction
Payment methods like auto-renewing subscriptions reduce the friction involved in making online payments and are in-built methods of increasing customer loyalty. Customers are able to enjoy a seamless purchase process, receiving their items without having to checkout multiple times. For retailers, auto-renewal means that revenue is easier to forecast, and they can rely on increased profit through a more consistent flow of incoming subscriptions.
Just as it’s necessary to troubleshoot VoIP when your online call lags, you should also re-evaluate your payment processes when user reviews flag reduced satisfaction. Modern methods of digital payments can ignite renewed interest in consumers that might have previously turned down your business.
c. More Consumers in Stores
Although the focus of frictionless digital payment is on online retail, it can also encourage consumers to visit your physical stores. In light of recent health concerns, touchless payment is an invaluable alternative to traditional checkout processes. Offering a service that ensures consumer safety could see your business selected over competitors that fail to keep up with the times.
Alongside providing a more convenient and accelerated method of payment, contactless solutions will show your commitment to consumer wellbeing and therefore promote your brand reputation and improve your relationship with your customer base.
The Future Is Frictionless
With so many methods of frictionless digital payment available, there’s an option to suit every business requirement. Whether you intend to automate ecommerce orders completely or simply optimize the purchase process, digital payment upgrades improve the customer experience alongside your profit potential.
Contactless transactions can be a safer, more secure, and more accessible alternative to traditional payment processes. They can blur the boundary between online and physical retail and encourage consumers in-store. At the same time, they provide opportunities for instant purchase in just one click or the swipe of a mobile app, with fewer customers blowing up your business phone number with inquiries.
In a marketplace where the largest retailers can invest in substantial learning and development to optimize their checkout processes, small and medium businesses must take advantage of emerging frictionless payment opportunities if they hope to remain competitive.
Companies that prepare for this technological change have the best chance of maintaining or expanding their customer base. The future of retail is frictionless.