With the New Year right around the corner, now is a great time to look back on the strides we made in 2015 and think about how they will impact the direction of Fintech and payments development in the coming year. The focus of this article is on the key business elements that merchants should consider as we enter 2016.
Checking Out Checkout Efficiency
As every merchant well knows, the checkout is a critical stage in the path to purchase, so the checkout process is always undergoing revolution. Whether or not a customer converts depends on how accessible and seamless the checkout is, so a top priority of online merchants this year will be creating a much better and faster checkout experience.
Regardless of how these solutions are developed, all successful checkout innovation needs to be rooted in the customers’ needs and expectations of the process. Once merchants have a keen understanding of what the customer wants from the checkout, they will be able to innovate products that more quickly and effectively guide customers through the process and build long-term brand loyalty.
New Year, New Retail Touchpoints
Moving into 2016, the e-commerce experience is not the only thing on the Internet retailer’s mind. The past few years have trended toward retailing via multiple channels, and many online merchants will follow in the footsteps of e-commerce giant Amazon.com by opening physical stores and pop-up shops to complement their online offerings.
A number of new e-commerce channels are also developing, and merchants will be taking advantage of these new retail touchpoints as well. In the past few years, many leading social networks have been working to implement social commerce, or the ability to sell directly to customers through social media. Utilising this channel, merchants can encourage and support real-time transactions with impulse shoppers, rather than rerouting them to a payment page on a separate website, where they might think twice and decide against making a purchase.
In addition to social commerce, mobile commerce will get a big boost in 2016, particularly via wearable devices. Wearables like the Apple Watch will be a huge hit this year. I would not be surprised to see Google and Samsung follow suit and try to compete with the Apple Watchby offering seamless wearable payment options.
Better Performance with Big Data
Merchants will find that transacting over multiple channels will add some complexity to their operations, so Big Data will be a key element in any omni-channel strategy. Big Data is what gives retailers insight into their payments at each touchpoint, enabling them to understand their payments performance and answer questions such as: Which country are most of the payments coming from? Which country has the highest credit card decline rate? How are most customers choosing to pay on my site?
To answer questions like these and maximise payments performance accordingly, merchants will need more and more data. They now understand that it is not only about what you sell, but how you sell it. Big Data will enable merchants to understand how, when, and where customers want to pay and receive their merchandise.
Payment Technologies for 2016
There are a number of payment methods merchants should consider supporting in 2016 to meet customer demand. First and foremost are mobile payments. We’ve been raving about mobile payments since 2009, and progress has been made every year since. With Apple, Samsung and Google entering the scene and growing the market in 2015, consumers are now more aware of mobile payments than ever before, and thus more likely to want to use their smartphones to make in-store payments.
Another payment innovation gaining traction is same-day or real-time ACH (Automatic Clearing House). ACH is a method of transferring money between bank accounts in the U.S., in which a merchant is permitted to take payment directly from a consumer’s account when the consumer provides his name, account number, account type and routing number. An ACH provider facilitates the transfer, which can take from seconds to five business days. I don’t think we’ll see real-time ACH in 2016, but there is already a lot of talk about it taking far too long. We can expect online merchants in the US to push for same-day ACH delivery in 2016.
Lastly is Bitcoin. Much to my surprise, people actually use this payment method, and many virtual currencies are emerging. I myself am not a fan of Bitcoin, but I think 2016 will be a critical turning point for Bitcoin; it will either gain significant traction or fizzle out completely. One good sign for virtual currencies is that Denmark is reportedly moving to a cashless environment in 2016, with suggested replacements including trade cards, bank transfers and virtual currencies. We’ll have to wait and see whether the government adopts a virtual currency, or if other countries follow Denmark’s example.
We’re on the brink of an exciting year of innovation and adoption of Fintech. I look forward to seeing what new technologies emerge this year and which past innovations become mainstream in 2016.
By Ben Yaniv Chechik, VP Product at Zooz.