Not all that long ago, eCommerce was more notion than reality.
Buying something online still required interaction with the brick-and-mortar world, with cash, and even delivery methods that — at least by 2019 standards — may seem a bit archaic.
Consider the fact that buying something from eBay — at the end of the last millennium, and before PayPal — involved choosing and clicking on the item desired, taking out money at the bank through a check or money order, mailing that payment to the seller, and then waiting days for the parcel to arrive.
In the latest “Monetizing Payments” podcast with Karen Webster, Bob Butler, president of Payrix, offered up that example to show just how far we’ve come in terms of customer expectations, and how payments fit into the equation of delivering a seamless commerce experience.
Now, of course, ours is an always-on economy, where digital wallets thrive, and where ordering online means groceries are on the doorstep in an hour or ready at the nearest big box retailer. Payments come wrapped in an experience, tied to brands, and, ideally, help cement loyalty.
It’s no easy task for merchants to deliver that continuum of service across platforms, from browsing to checkout to payment. It’s also no easy task for brands to “own the customer experience.”
Along the way, the business (and by extension, the brand) must take steps to capture data to mitigate risk while minimizing the friction that causes consumers to abandon a merchant’s site, which means the business loses sales.
“Owning the customer experience is all about maintaining brand integrity — making sure the merchants and their customers feel a connection to the brand,” said Butler.
His firm, Payrix, serves the software companies, marketplaces and business platforms that, in turn, serve the merchants and endeavor to create that seamless, branded experience.
The evolution of payments as an integrated experience means merchants need to focus on their particular areas of expertise, without losing the advantage of having outstanding payments capabilities that add to the overall commerce journey.
Through white-label versions of its application programming interface (API)-based payments solutions into partners’ digital marketplace and software offerings, he said, Payrix can offer a menu of services that help merchants take advantage of economies of scale, and avoid having to cobble together solutions themselves.
The fact that businesses can tap into one another’s areas of expertise has also meant that who “owns” the customer relationship has changed over time, he said, evolving into an ecosystem that includes a range of stakeholders. Viewed from a high level, Butler said, the customer experience needs to be multi-pronged, which means the merchant, the payment facilitator and the platform must all work together seamlessly across onboarding, processing, funding and reporting functions.
“Tech is propelling expectations forward so rapidly that it is no longer acceptable for a merchant or marketplace or software firm to give away a payments experience to a third party,” said Butler.
Keeping payments in house, so to speak, carries its own challenges.
Asked whether there is a level of friction that consumers will accept — knowing transactions are secure even if it means slowing down the checkout process — Butler stated that payments technology firms have to follow the mandates of the Patriot Act and know your customer (KYC) processes.
“A certain level of personal data must be passed back and forth, and this is never going to be completely frictionless,” Butler told Webster. “From an overall risk mitigation standpoint, we have to be aware that there is going to be a bit of friction in the process.”
He recounted a personal experience in which he went to donate money through a crowdfunding platform, one where he had previously made donations several times. Yet, in trying to send the donation through the company’s website over his phone, Butler had to go through the process of re-entering data — to the point where he abandoned it all. Butler said he opted, instead, to send a person-to-person (P2P) payment through a digital wallet.
That experience with the crowdfunding site illustrates a level of friction that consumers will not put up with for very long, he told Webster. And the impact to merchants can be significant when consumers vote with their feet.
The entering and re-entering of consumer data is indeed where friction is most apparent, said Butler. Yet merchants (and the platforms that serve them) may be missing the mark if they do not constantly keep their sights on consumers’ frustration with this part of their commerce journey. Among the most pressing frictions: declined charges, unfamiliar and sometimes unfathomable descriptors on bank and card statements, and refund policies that are not communicated by the merchants upfront.
Nowadays, he said, consumers want their information and preferences remembered across all locations, across all devices, in-store and online. Call it a case of the consumer driving the bus — and technology and payments players must act accordingly.
“It’s a ‘single sign-on mentality,” he told Webster. “And it’s not going away. The consumer is always going to drive the technology, not the other way around.”