The time has finally come: Apple and Google are well and truly established with their own mobile payment solutions. But what do these new players means for e-commerce and stationary trade? And how can this situation be used effectively?
Apple and Google may not be the first on the mobile payment train, but due to their market power with smart phones and because of the very user-oriented solutions as previously experienced, the US corporations have had a great impact on the market – writes Arvato expert, Jan Florian Richard.
And we are already seeing a clear trend towards contactless payment with large chains especially – people holding their mobiles on the payment terminal in the supermarket are no longer a rare sight. For me, this development is not at all surprising, as money transfers by NFC is so much simpler than looking for the right change.
Trade also benefits, as the comparably high costs of handling cash are significantly reduced. More customers are also using their smart phone more frequently when online shopping. The market is therefore being redefined.
The right time to make offers
For this reason, now is the right time to integrate mobile payment solutions in your own shopping landscape – whether this is stationary trade or e-commerce. Because even if the market share is still only changing in the single-digit percentage range, many consumers honour user-friendly offers and even actively demand them.
My experience is therefore clear: simple payment processes can constitute added value and give you a positive unique selling point. Many end customers like using innovative payment methods such as Apple Pay and Google Pay, which means a shop operator can definitely increase their attractiveness.
However, the integration often requires technical changes, and not every e-commerce software offers simple plug and play solutions. You also need the right payment service provider, and many acquirers do not work with Apple or Google.
A successful start for mobile payment solutions in your own store is therefore only possible if the framework conditions are right. In addition to the appropriate technology and the right payment service provider, my experience has shown that you must have the optimal selection of payment methods for your target groups up your sleeve and that these must be controlled individually using the characteristics of each customer.
So, for example, the conversion rate can be greatly increased if the credit standing plays a role in the choice of payment methods. You can have much more confidence in reliable existing customers, for example, than in one-off shoppers with unclear address data. And it goes further: if you have optimised dunning and collection processes, you reduce payment defaults and at the same time increase customer satisfaction.
Create the right overall package
The right payment landscape is therefore not just about offering the supposedly more attractive payment methods. You will achieve optimal results with your store if you offer intelligent solutions. And these should cover the entire customer journey, such as from risk management and the supply chain, to receivable management.
Only by combining all aspects can you assist your customers with the highest possible flexibility and offer the process they want. On the other hand, you will create the requisite confidence that will keep your receivables to a minimum.
And to improve the ratio between sales and protection against payment defaults even further, we at Arvato Financial Solutions will develop the optimal framework for your store, whether online or stationary, together with you.