Industry players are on a mission to differentiate themselves, while merchants and consumers are demanding innovative ways to pay for what they buy. A seamless payment experience is becoming more and more important to consumers and, therefore, merchants as e-commerce continues to be as competitive as ever.
Guided by the industry leaders that participated in our Summit in 2022, featuring nearly 300 e-commerce leaders discussing the current state and future vision, we delve into what the innovation in online payments has in store for all industry players.
Fraud innovation is here to stay.
Industry analysts are seeing the potential of payments for revenue optimization and seizing on the opportunity. The innovation and excitement of online payments fit just right in the new e-commerce landscape. With customers demanding increased flexibility, user-friendly payment innovation is now an important influencer in e-commerce consumer behaviors.
According to research by S&P Global Market Intelligence, merchants are missing out on $16.3 billion in revenue annually due to false declines and $20.1 billion due to customers’ preferred payment methods not being accepted on retailers’ sites.
Merchants can benefit from a best-in-class fraud solution to help them optimize payments and capitalize on their revenue. The opportunity lies in the middle of the shopping journey. While customer acquisition costs are increasing, fulfillment costs will continue rising, with customers demanding faster and more personalized delivery. The opportunity for value improvement lies in improving user experience while optimizing checkout and payments.
Ending the payments’ path to commoditization
The heart of the shopping journey is essentially the shopping cart. This is a ‘make or break’ moment for merchants. Whether a customer continues to the final stage of their shopping journey or not will determine the merchant’s revenue.
Samsung Chief Digital Officer Kal Raman and his team adopted a “return on shopping cart” metric. Incorporating big data, it tracks what happens to orders after buyers hit the buy button and place items in carts. It aims to gather insight into how many of them convert and what happens to those that don’t, and spot opportunities to save those customers for a lifetime.
For a bigger advantage in retaining customers, PSPs need to provide competitive packages of products that offer merchants value extending to their customers.
Nicole Jass, FIS senior vice president of growth solutions product, commented: “The biggest thing in payments is that payments are getting commoditized. The payments piece is like the utility company. We’re the electricity that you just accept comes to your house.”
What FIS, which includes payments provider Worldpay, is doing to break out of the mold is launching its Guaranteed Payments. Guaranteed Payments will be integrated into the payment stack to provide merchants with higher and guaranteed approvals – a huge challenge and pain point for merchants.
As a first in the industry, this type of innovative collaboration will stop payments from being commoditized. It changes the e-commerce game rules from fighting fraud to approving good orders. That opens doors for customers to try new payment plans without the fear of fraud.
One of FIS’ customers already saw great results from this innovation in online payments. Its approval rate increased by 7%, which turned into $8 million. These are topline results.
The hope is that this process will also affect other players, such as issuers, who will authorize more orders when they see they are receiving better quality orders.
With the realization of how online payments can be optimized, PSPs, merchants, and customers are seizing the opportunity to maximize revenue and provide a seamless customer journey. Online payments are a gold mine for up-leveling the e-commerce game and stepping into the new era of e-commerce innovation.
Amal Ahmed is the Director of financial services and EMEA marketing at Signifyd, a company that provides an end‑to‑end Commerce Protection Platform. Signifyd uses big data and machine learning to provide a 100% financial guarantee against fraud and chargebacks on approved orders.