Payments is one area which the big banks traditionally had tied up.
But with new technology and rapidly-changing consumer demands and habits, there’s a lot of disruption in the management of payments, from both a consumer and business perspective.
Reserve Bank data shows cash as a percentage of payments has fallen below 50% (from 62% in 2012) and cheques have all but disappeared.
“Consumers are increasingly reaching for their phone instead of their wallet and businesses are investing in infrastructure to meet this demand including point of sale terminals that allow users to order and pay for their goods in-store via their mobile devices,” a PayPal spokesperson said.
The changes don’t just apply to the financial industry. The startup world and businesses are also talking about how enterprise and consumers can be smarter with their transactions.
Business Insider spoke to some people on the cutting edge of the changes in the payments industry in Australia. Here are 12 ways companies can sharpen up.
1. Use the data
Clipp CEO Greg Taylor said the opportunity of engaging with customers and pushing repeat sales is one of the ways being smarter with payments can boost a company’s bottom line.
“Technology can play a super important part in creating a handshake between the merchant and the customer,” Taylor said, adding the disconnect between a transaction and a customer profile is costing businesses future sales.
“There’s an opportunity in bringing payment and loyalty together,” he said, adding “You have a way to engage and get a customer back in the store.”
He suggests this can be done through combining loyalty programs, including proximity or seasonal based offerings with payments to generate repeat patronage.
“They’ve got to look at how they can be more granular with their marketing and understand their customer better because at the end of the day a better customer experience will result in repeat sales at a higher market price,” he said.
2. Make it simple
If a consumer finds it too hard to buy what you’re selling online they’ll go elsewhere. It’s so easy to shop around online which means businesses need to make the process as efficient as they can.
“Change your site from a static website to a dynamic website, it’s not that hard you can get off your bum and put a shopping cart on there and sell your product,” eWAY CEO Matt Bullock said.
“There are so many sites out there in Australia that you can’t buy off,” he said, adding if businesses don’t provide online payment options their competitors will and they’ll win business for it.
A PayPal spokesperson said businesses need to offer a secure, seamless payments process to be able to capture every possible sale.
“Too often we see businesses lose customers at the checkout because users need to keep re-entering their credit or debit card details every time they check-out,” the spokesperson said.
Taking employees out of the payments process and automating it means you have additional resources you can allocate to more important tasks, such as growing your company.
“You can take people out of the process and automate and the people can then do other things to help grow the business as opposed to just working in it,” Bullock said.
“At the end of the day when you do that you go to bed in the night time and you make money while you sleep.”
4. Assure customers with a safe platform
Implementing a payments system which is safe and secure is important – both for the merchant’s brand and business and the consumer’s piece of mind.
“If a customer purchases a good or a service from your business online they are putting trust in your business that their personal details are safe,” PayPal said.
“One of the biggest threats to businesses that don’t have the proper security in place is a loss of trust from consumers should something go wrong.”
Using a trusted service or system also means business owners can focus on growing their business rather than worrying about the basics.
“Hosting credit cards on company servers is now the equivalent of business suicide, with data breaches taking large hits on brand health,” Braintree head of Asia, Tyson Hackwood said.
5. It’s not just cashflow
Payments have the potential to be much more than just a financial transaction, Braintree head of Asia Tyson Hackwood said.
“The industry is changing due to the ‘Pure Play’ technology led businesses, like Braintree, PayPal and others that have made ‘Technology in Payments’ the focus, allowing for the new models to not only exist, [but] thrive,” Hackwood said.
He said these new business models are unlocking a myriad of new opportunities for consumers and businesses to interact which in turn is creating a bunch of new business opportunities for business.
“As they build relationships with the customers, they want to make it easier and easier to interact, to engage and to ultimately buy the companies product/service,” he said, adding payments can be seen as a touch point with a customer.
6. Make it multi-platform
Payment technology needs to be able to sit across different platforms, Hackwood said it needs to be accessible from the cloud and be “robust enough to handle loads of traffic”.
“Importantly it needs to be in a format that can be easily integrated and rolled out,” he said.
“Companies need to deal with organisations that have the scale and the capability to take the load of many of the functions that they have managed internally for years.”
7. Ease of use makes for more transactions
Minimise the checkout requirements wherever you can – it can stop customers leaving without making a purchase.
“Take the pain out of payments,” Hackwood said.
“If it’s someone you’re going to have a long term relationship with why not store their information?
“When they hit ‘book’ they just want to book. When they hit ‘buy’ they just want to buy.”
Find smart solutions which can handle that.
8. Payment platforms are part of your product
Payment technology has the ability to be a solid business product, Hackwood said.
The user experience AirBNB and Uber offers has made payments “sexy” again, he said.
“They’ve taken away from that boring piece of card in my wallet, they’ve made it cool.”
9. Watch competitors
Look at how competitors or similar companies are handling payments. You can learn a lot about what to do – or not to do – through their processes.
“Smart is sometimes just as simple as looking at others who you revere as part of your business,” Hackwood said, adding, “What do they do and how do they do it?”
10. Outsource when it suits
Find a provider who is a specialist in payment compliance – it will remove a lot of the hassle small businesses face with online payments.
“Do you trust yourself to stay up with the latest payment security capability? It’s not your core business. Focus on your core business,” Hackwood said.
11. Get a data flow
Connecting payment data with accounting software and online banking is going to save you some stress.
Accounting software firm Xero can reconcile bank accounts and payment details automatically – if you authorise it.
12. Know the difference between online and offline payments
Touch Payments Co-founder Bertrand De Oliveira said one of the biggest problems he has tried to tackle is reducing the amount of customers leaving a site at the checkout.
In trying to understand how to change this he’s found changing behaviour often requires bridging the gap between the online and offline world. This could mean offering a try now, pay later deal or using re-targeting advertising tactics to drive conversions.
He said payments is no longer just about money – it’s not about marketing and future sales as well.
Have you got more suggestions? Let us know in the comments.
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