In the quest to survive in modern retail, merchants are quick to add on the latest new tech startup’s service or a new email marketing algorithm to drive conversions. Almost every fundamental is fair game when it comes to reinventing retail for modern success, but what if a slight twist on a core principle of the retail formula could be the key to something big?
It might sound like a grand promise, but PayByGroup and CEO Camilo Acosta have already started to turn heads with a simple proposition: Why do retailers have to sell to just one customer in each transaction? In an exclusive interview with PYMNTS.com, Acosta explained how many industries sell products or services with high prices that are usually paid for with several shoppers’ funds and accrued under a single payer. As such, booking a hotel room with friends, splitting the costs of a registry item for a wedding or buying tickets for a sporting event can be a stressful process for shoppers who are ready and willing to buy.
With PayByGroup, though, customers can band together to pool their funds for online purchases. To Acosta, this is a natural extension of innovative payment solutions and things customers already do.
With PayByGroup, one shopper opens up a collective wallet for the group. From there, individuals can pledge either equal or specified amounts for the product or trip, and shoppers aren’t committed to their pledges until the group’s total hits the price of their service or item. The organizer can set a time limit for the group, and if one or more users are dragging their feet and haven’t deposited their fair share, PayByGroup automatically sends reminders, reducing the normal burden the organizer of a friend or family outing would normally encounter.
This combination of ease of use and natural applicability, Acosta explained, has helped PayByGroup drastically reduce the time-to-purchase for typically slow-burn orders.
“Most payments are complete in 48 hours,” Acosta said. “In the vacation industry, we’ve cut down the average booking cycle time between inquiry and final booking from nine days down to two or three days. It’s been a significant time-saver for that industry in particular.”
For retailers, the benefits of payment services enhanced by communal payments options is clear. Travel and lodging are clear winners, but Acosta explained how traditional retailers are starting to leverage PayByGroup for big-ticket items that lone shoppers might consider too prohibitively expensive for them alone.
“We’re beginning to work with traditional large retailers, especially in the registry stage,” Acosta said. “They want to get more registrants to add high-dollar, high-margin items to their registries, whether it’s the $500 Cuisinart or the $1,500 sofa. They want people add those and feel comfortable adding those because right now, most people wouldn’t want anyone to have that burden of paying $1,500 for a sofa.”
PayByGroup might not be the most striking idea, but it solves a social problem common in large purchases that often keeps willing customers from making high-margin purchases. By adding a modicum of social functionality to a digital payment process that’s already familiar to most consumers, PayByGroup could create a potentially lucrative bridge in the path to purchase.
“The consumer’s path to purchase is anything but linear, and discovery is influenced by any number of factors and actions taken in any point of time,” said MPD CEO Karen Webster in her keynote speech at this year’s R2 Retail Reinvention.
That’s a reality that no retailer can ignore any longer — and PayByGroup just may be on to something in a time when reinvention is key.
After all, if the ultimate goal of eCommerce is to create a perfectly frictionless experience for the consumer, PayByGroup has taken on one of the oldest frustrations in cash – hassling friends and family to pay up – and turned it on its head.