Digital Payments
A boulevard is a wide street that runs in two directions and usually has a median in the middle. This is important to remember for anyone looking to build a strategy for payment and commerce in the mobile world, because it symbolizes an approach that is equally applicable to start-ups, small businesses, and established enterprises.
Once, the chief focus of payment was unidirectional, that is to say, the money travelled in one direction, from customer to vendor. In exchange, the customer received a product or a service. Even when financing or lending institutions were involved for larger transactions, the money trail was more like a one-way street. Any situation that required a return or refund often steered the customer to a separate place – the returns department or customer service department – where the complaint was to be handled, and the customer’s money was to be returned either as cash or as an in-store-credit.
This one-way street has now been replaced by a wide boulevard. Customers are far more empowered than they used to be and they know it. They carry a great deal of knowledge with them, primarily on their smartphones; this includes competitors’ prices – both other stores and online marketplaces, reviews, and alternative purchasing opportunities. Like a real-world boulevard, traffic travels much faster than it would on a one-way street, and most significantly, it travels in both directions.
Multidirectional
The capacity to provide refunds, to handle returns, and to basically recirculate money back to the customer is becoming an enhanced part of the commerce relationship. Here’s why: the technologies and techniques that enable payment are many and varied (this is something we highlight and quantify in our series, Go Beyond Payments: What’s Now and Next, in PCWorld – Click here to read). They include tap credit cards, Apple Pay, and Samsung Pay and mobile wallets, all of which enable one-touch simplicity and security that makes the customer purchase experience more convenient and secure. They also allow brick-and-mortar retailers to compete head-to-head with Amazon, by matching its “one-click” payment option, a technique that it held as a proprietary competitive advantage until only recently.
The speed and convenience of one-touch payment raises the bar of expectation for other areas of commerce, specifically returns and refunds. It is expected that the return of monies should be as convenient and effortless as the original transaction, not merely via a customer service department, but anywhere, and through any device.
Some merchants have already taken the step of building returns into their sales model. Trunk clubs, for example, send a selection of products, like shirts, to a subscriber, with the full expectation that the customer will choose one or two and will send back the rest. The return concept has been built into the marketing model. The costs of mailing and return delivery is being built into the overall marketing budget. It is not being borne by the customer.
The ease of instant return and refund makes up the other side of this high-speed transactional boulevard. But what about the middle? The reason to use a boulevard as the analogy, and not just a regular road, is because this middle section is very visible and very profound. In the world of commerce, this middle represents data.
Data Is King
Even when a store completely strikes out, with a customer asking for a 100 percent refund on every item they have bought (a rarity, hopefully), the retailer still wins. Why? Because the data remains. Data is used to build more accurate customer profiles, deliver more tailored and relevant messaging, and provide a far more personalized in-store customer experience. No matter which direction the money flows, the retailer ends up with a net gain, if it is astute enough to collect, process and redistribute customer data in real time.
The marketplace will continue to evolve. Chatbots will start to assist sales associates in building relationships with customers. B2B field agents will have access to every element necessary to support a sale, from catalogs to contracts. Traditional vendors will start to discover additional revenue streams, online, in the aftermarket and by offering everything-as-a-service. Tying this all together will be this three-channel thoroughfare: one side travelling to the merchant, the other travelling to the customer, and in between a fertile bank of priceless data.
Startups and small businesses are uniquely positioned to take immediate advantage of this boulevard mindset thanks to their agile management structure. It is much easier to embrace this new bi-directional money trail than it is for larger organizations, which face resistance and slowdown due to internal silos and long-established processes and obligations. Small businesses are used to keeping their senses sharp for opportunity and innovation, and startups, by their very nature, must enter a marketplace fully engaged in the realities of the moment.
Ultimately, the customer now owns the show, and data is the predominant currency of business. Organizations that recognize this are best suited to survive and thrive for the next few years at least.
This post is brought to you by Sage Payment Solutions and IDG.
The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of Sage Payment Solutions.
By Steve Prentice
