What business managers commonly get wrong about payments
Payments are as old as commerce itself, so it’s no surprise that some business leaders consistently think of payments as a function that’s necessary but doesn’t add much value beyond facilitating transactions with customers. For many business leaders, a payment system represents a cost – for example, the investment in the simple commerce system they use to process payments.
Here’s What Business Leaders Commonly Get Wrong About Payments – 73% know digital payments are fundamental to business growth, and they understand digital processing capabilities are necessary to avoid lost revenue via 41% or higher cart abandonment rates, but they consider their commerce system as a cost rather than a strategic resource. Many do this because they are not aware of the possibilities embedded payments bring to the table. Modern payment systems have evolved tremendously over the last decade, and their functionality and potential to generate revenue have also changed.
Built-in payments happen seamlessly to deliver a great customer experience. So instead of thinking about payments simplistically—instead of thinking of them solely as a way to process payments—business leaders should instead look at payments as a strategic asset that can generate value. Have you received incorrect payments? Read on to find out how you can turn a business necessity into a growth driver.
Lead in payments instead of following the crowd
Digital payments gained ground before 2020, with many people using apps and digital wallets to pay for goods. But the pandemic led to greater consumer acceptance by super-changing online shopping and offering alternatives to those seeking contactless transactions. As the world emerges from the pandemic, buying habits are proving to be sticky.
If you are looking for a commerce solution for your business, it is important to remember that every system includes payments, but there is a wide range of possibilities in payment technology from simple handovers to embedded payments. An embedded payment approach offers more than a simple way to process transactions. It enhances the experience with almost invisible transactions that can drive loyalty and increase repeat business.
Another factor to keep in mind is that competitors are already leveraging payment technology to differentiate themselves in the market. Offering a modern payment experience while competitors still use traditional processes is a way to lead payments rather than follow the crowd, and it can lead to a competitive advantage for your business.
Transform payments into a strategic asset
So why should you consider embedded payments as a strategic asset? The real-world impact of implementing embedded payments will depend on your business, but using embedded payment technology helps drive revenue growth. Removing the friction from purchase reduces cart abandonment, and a seamless checkout experience increases loyalty.
In some schemes, an embedded payment partnership can directly provide a new revenue stream. For example, some partnerships have revenue sharing based on payment volume. An embedded payment strategy can also improve market penetration by allowing your business to offer more favorable rates or fees than your competitors, which can also improve your revenue picture.
Proof points on embedded payments
Millions of consumers have experienced the benefits of digital payments, including Apple Wallet and Google Pay. Whether shopping at home on an online shopping site that stores their payment details, paying for groceries with a tap, or scanning a QR code to order and pay for an item, built-in payments make transactions effortless. Increasingly, consumers find that the requirement to enter their financial data is too burdensome to proceed with the transaction.
Embedded payments help organizations of all types overcome the hurdle. Current use cases for embedded payments include nonprofits that allow donors to contribute to a worthy cause the moment a message inspires a donation. So instead of asking donors to remember to log into a website and enter credit card information, a built-in payment approach takes the friction out of the donation process.
Rideshare apps like Uber and Lyft were early adopters of the embedded payment approach, and it’s one of the factors enabling these companies to completely turn the personal transportation industry on its head. They were among the first to make payments happen behind the scenes without the need for data input (beyond a tip to the driver).
Getting the right payments
Business leaders who recognize payments are evolving and realize they don’t need to follow the crowd to make digital payments can gain a significant advantage with an optimal payments strategy. Today, for example, many integrated software vendors offer built-in payments that merchants can use to add to the payment options they already offer.
There are many ways to transform payments into a strategic asset via embedded payments, but it is important to remember that payments are always evolving, and customer expectations are changing in line with these developments. So it’s a good idea to explore a payment strategy that is future-proof, adaptable to meet new options and consumer demand as it changes.
With that in mind, remember that there is a first-mover effect. Businesses that deliver a frictionless shopping experience can lock in customer loyalty and gain a lasting advantage over the competition. Many business leaders do not understand the potential of embedded payments as a strategic asset today. So if fully maximizing payments hasn’t been at the top of your business strategy list, you may be unwittingly accruing lost opportunities by viewing payments as a cost – and failing to look strategically beyond a single transaction is a short hop , skip and a jump to lose more money across each transaction.
