Are payments critical to the customer experience?
Baringa recently hosted a panel that explored how fundamental a seamless and embedded payment journey is to the entire customer experience.
A key theme to emerge was that the industry still needs to make progress to really think customer first. Securely embedding consumer-centric payments into the wider customer interaction is a given and there is opportunity for ongoing collaboration across the industry to effectively leverage technology innovations.
Frictionless payments have transformed the way customers expect to interact with retailers and service providers. As a result, they have become an important differentiator for the overall offering that businesses bring to market. In our recent LinkedIn poll, 95% of respondents agreed that payments are important to the customer experience.
The expectations of modern consumers mean that a clunky payments experience can be enough to alter buying decisions or push users to switch financial services provider altogether. For example, according to Netflix, in the event of a card payment being declined, 30% of their users will change cards rather than query what the issue is.
As technology continues to drive convergence between goods, services and payments, banks and payment fintech companies need to focus on the wider customer value chain to effectively enhance their customers’ experience, end-to-end. Whereas in the past, the payment was treated as its own distinct part of the customer interaction, now the focus has shifted to how the payment itself can better integrate and support the wider transaction in order to make the end-to-end experience smooth and seamless.
This has also resulted in the industry shifting from a compliance-driven focus, to finding the wider opportunities for further enhancing customer engagement through process innovation.
The role for regulators
The evolution of the way payments providers are delivering and adapting their service and technology has reshaped the way regulators see their role.
Although payments have become almost invisible and is seldom front-of-mind for customers, it does become an issue when something goes wrong. The regulatory priority has thus remained focused on financial stability and operational resilience. Customers still need and want consumer protection and recourse in the event of a dispute.
It is not the role of the regulator to ascertain how best to address customer needs. But the regulator can help by adopting a partnership approach to innovations in order to better understand how the regulatory framework must adapt to make it easier to improve customer experience, while maintaining security and resilience.
Collaboration is crucial
Partnerships are not only crucial for regulators and providers, but for all participants in the payments value chain. It is very easy for the payments industry to overly focus on the rules and regulation (which are vital) and lose sight of what the customer actually needs and wants.
The future of payments relies on partnerships across the industry, balanced with healthy competition, where the customer remains at the centre. This should remove the focus away from the payment itself towards true customer value and experience. The best payment technology and solutions bring all participants in the payments chain together, and build a shared vision of how best to address the underlying needs of the customer.
If you would like to find out more about how we can help with your payments journey, please contact us.
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