Delivering payment flexibility is the key to superior digital customer experiences

By Marc Sczesnak  Published On October 25, 2020

You may be hearing a lot about real time payments and how they are going to take the world by storm.  It is becoming increasingly more important that you not get caught up in the hype but rather develop a cohesive payment strategy based on the needs of your customers and an examination of their payment use cases.  Only then can you provide payment options that meet the needs of your customers and provide great user experiences efficiently. Here are some specific examples:

Better mobile experiences will make you a winner

The world is going mobile.  More people have smartphones and they keep getting better.  Poor ecommerce payment experiences lead to customer dissatisfaction and a higher percentage of shopping cart failures.  The Uber / Lyft experience and cellphone providers use of autopay have done a great job of making payments a seamless part of their customer experience resulting in a higher percentage of shopping transactions. 

Next up. I believe the best mobile ecommerce experience is served with a seamless Apple Pay or Android Pay wallet supporting any of the major card brands. There are several reasons for this…

  1. The customer experience is excellent 
    • Two clicks and facial recognition is all you need to complete an Apple Pay transaction.

  2. Superior Security around the transaction
    • Facial recognition 
    • Consumer payment credentials are not stored at the merchant’s site
    • Transaction is tokenized
      • Payment information is encrypted and securely held in one location – the Apple or Android device and enables you to shop wherever Apple or Android Pay is accepted

  3. Consumer friendly dispute resolution environment
    • The card brands offer consumers the right to dispute transactions that can be arbitrated to a customer’s satisfaction if a merchant chooses not to make good on providing product or resolving a product issue.

This is probably the swiftest path to delivering a better customer experience.  Is it the cheapest?  No, but the overall experience in a mobile setting will be optimized.

So where do real time payments fit in?

There are several use cases that make a lot of sense for real time payments.  These transactions usually involve:

  • Larger dollar values
  • Need for immediacy regarding the delivery of funds

USE CASE EXAMPLES

Higher Education Payments

Most of the higher education tuition and fees payments are made via an e-check.  These transactions can identify if funds are available in the account at time of balance inquiry but cannot secure the funds for the e-check transaction.  Credit and debit cards can secure the funds but are more costly transactions.  This cost is usually borne by the student and can cause customer dissatisfaction.  The school wants to ensure the student has the money to pay before releasing the seat because if the money isn’t there, they can keep that seat open and another student can purchase it.  The school wants to know the payment is good so that they can reduce their opportunity cost.  Here is where real time payments come in because at that moment of truth the money moves from the student’s account to the school’s account and the student gets the seat.  Opportunity cost is reduced to zero.  Client need: Big dollar transaction / immediate delivery of funds – real time payments deliver.

Real Estate and large dollar B2B transactions

Two other use cases that make sense are real estate transactions and large dollar B2B transactions.  For example, imagine you are at a closing for your home. No longer is there a need for a certified check – you deliver the funds in real time to the title company who can also disburse them in real time to all the interested parties.

Large dollar B2B transactions can be delivered immediately to suppliers or partners.

The drawback in the use of these transactions is that they do not come with the same level of consumer protection as the card brand’s products.  If you have a problem or deliver the money to the wrong party, then you are on your own to try and resolve your problem.  Therefore, high dollar immediate delivery payments will need more focused attention to detail and is a better fit for real time payments than a low dollar value mass market B2C transaction. 

So be sure to take a good hard look at your payment use cases and map the products and services that enable you to provide the best customer experiences.  Universal Wallets like Apple Pay or Android Pay sitting in front of card brand payment vehicles are probably your best bet for an excellent mobile B2C transaction.  If you have a use case(s) involving large dollar amounts — and immediate delivery of funds is important — then adding real time payments to your mix is a great option, too. Contact Maverick for a deep review of how you can enhance your customer experiences and transactions.