- The customer experience (CX) landscape has changed dramatically in the past year.
- Consumers have begun to demand smoother payment methods in online and offline channels.
For some time now, consumers have been demanding smoother payment methods through online and offline channels.
Facts have proved that the social distancing and disinfection measures brought about by the pandemic encourage many consumers to try short-distance mobile payment (using mobile phones as physical points of sale to pay for goods) [POS]) the first time. Not to be outdone, e-commerce retailers are also looking for ways to improve transactions.
We predict that the total number of short-distance mobile payment users in the United States will jump from 101.2 million in 2021 to 125 million in 2025. This will also be the first year that more than 50% of US smartphone users will use this method for transactions.
Data shows that after the pandemic is over, adults plan to continue using contactless payment methods. According to Fiserv’s September 2020 survey, nearly three-quarters of millennials who have used contactless payment methods will continue to do so, while approximately two-thirds of consumers in other generations will do the same. This shows that most consumers are satisfied with this payment system.
With the increasing importance of the short-distance mobile payment market, the company will strive to win over consumers. For example, Apple Pay and Google Pay both offer cash back bonuses. Brands can also offer incentives such as discounts and free gifts in exchange for specific payment methods.
One of the ways brands and retailers are working to reduce friction in e-commerce is to provide more payment methods at checkout. Buy now, pay later (BNPL) options, such as Klarna, Affirm, and AfterPay, have proven popular with consumers, leading to more retailers offering these options. According to a September 2020 study by PYMNTS and Paypal, 41.8% of American adults cited the clarity of fees or interest rates as their reason for using BNPL, while only 11.2% cited credit cards.
In addition, a Jungle Scout study found that 51% of people prefer to shop from retailers that provide BNPL or other payment methods, which is an important number for emerging categories.
These BNPL options reduce friction by asking for less money up front, but what if you don’t ask for money up front? The startup BlackCart offers a “try before you buy” e-commerce, where shoppers select products online and then send them to try them at home without credit card pre-authorization.
Once customers decide which items to keep or return, they are automatically charged. According to data from Donny Ouyang, founder and CEO of BlackCart, the value of BlackCart transactions is about 45% higher than the value of typical transactions on the same website, the number of items tried has increased by about twice, and the number of items reserved has increased by 1.7 times.
Another factor causing friction is the refusal to trade. A study conducted by Sapio Research and ClearSale in five countries/regions in March 2020 found that 28% of consumers experienced a decline in e-commerce.
False rejections are an important issue because the pandemic has created a series of e-commerce activities, which usually come from new users. Due to the lack of data on the customer’s purchase behavior and in-store interactions, the false rejection rate of these new users is higher than that of the big ones. most people. According to estimates by Aite Group, brands and retailers lose 75 times the revenue of fraud due to false rejections. Given these data, it seems logical to prioritize approvals in the name of improving customer acquisition and lifetime value, rather than just minimizing fraudulent transactions.
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This article was originally published in E-marketer.