Payment disruptors must spread the word
Payments The growth in ecommerce and improvements in security have boosted electronic payment services. The challenge now is to convince more consumers and businesses to use them.
The disruptive payments industry must invest more in education to convince consumers and businesses to move away from traditional bank and credit card services.
The Fintech revolution has produced a large number of electronic payment platforms, but much of the early investment has been in developing the technology. The priority now is to raise brand awareness in what is becoming an increasingly competitive marketplace.
“The industry is moving so fast that disruptors need to be marketing their products more effectively to demonstrate how they can save people money, improve the customer experience and, importantly, that they are secure,” says Renee Frappier, marketing director at PacNet Services, based in Vancouver, Canada.
The payment processing market, where companies transfer payment information electronically between a customer and a merchant’s bank account, has expanded rapidly in recent years. Security and data management have improved and providers have moved to cloud-based solutions.
Also, as ecommerce has grown, people have become more confident about using electronic payment products on their smartphones and other devices.
Frappier says that the industry is developing so quickly that companies should consider raising awareness about their products, or at least the problems their products will solve, during the development stage and not wait until they are fully ready for market to hit go.
“These days, products can be conceived, created and launched within months,” she says. “Yet there is still nervousness among consumers and businesses about moving away from the legacy banks and credit card providers. When Fintech players are confident they have something new and exciting, like the worldwide trend toward instant payments, they need to effectively demonstrate which obstacles to online commerce are being removed or mitigated.”
The latest technology has transformed how transactions are initiated and processed, but many large blue-chip companies and small and medium sized businesses still require advice on which systems to use. If they are trading internationally, for example, they need relevant local-currency payment options.
They also require a better understanding of the savings that are possible.
Switching to an electronic payments system can save a company money because it is being charged pennies per customer transaction rather than a percentage.
“Business people can see the waste involved in the legacy systems and the unnecessary hurdles to commerce,” says Frappier.
The electronic payments industry is global but players are watching closely to see what the implications might be from Britain’s decision to leave the European Union.
“We are still evaluating what Brexit could mean but there is the topic of regulation and what the Financial Conduct Authority will decide to do in future,” says Frappier.
She says there could also be logistical problems with recruiting talent because many Fintech companies are in Europe; also, many EU nationals are working in the UK payments industry.
“Ultimately Brexit will not slow the development of the electronic payments sector. The UK might be leaving the EU but it is still part of Europe and the marketplace is global.”