Innovation in payments – how merchants can get it right
The payments landscape has seen a significant increase in the adoption of technologies built to enable frictionless transactions.
This accelerated pace of innovation has been driven in part by the pandemic and subsequent e-commerce boom that the world has experienced. If the past few years have taught us anything, it’s that those payments now serve as the “invisibly invaluable”.
The age-long adage of balancing security and convenience has taken a radical turn in recent times as today’s customer now expects transactions to be facilitated smoothly, in real time, and to be frictionless – in other words, “invisible”.
In many parts of the world, real-time payments are increasing in popularity while Point-of-Sale (POS) lending and buy now, pay later (BNPL) financing solutions are reimagining lending and changing the POS experience.
Further innovations such as tap and pay or scan-to-pay solutions such as digital wallets (Apple Pay, Google Pay) and QR codes also continue to grow in popularity, coupled with increasing consumer adoption of digital payments. And as online commerce becomes ever more popular with consumers, the customer experience and the ability to enable a seamless shopping journey are becoming increasingly important for many merchants.
That said, the industry is merely at the precipice of its innovation capabilities. In the coming years, we will begin to see a movement of payments utilising emerging technologies that will transform the way we pay for goods and services forever. But innovation is not always about radically disruptive technologies and cutting-edge inventions. It can also involve making incremental improvements of existing products and services or venturing into new markets.
Every organisation’s approach to innovation is different and it’s important to use the tactics that work best for you and your business. There are some guiding principles that can set you on the right path and they are focused on putting continuous discovery, testing, knowledge, and customers at the heart of your decisions.
The discovery process is all about developing a profound understanding of your customers to ensure that you are working on the problems that have the highest impact for them.
To develop this understanding, direct liaison with customers from the outset of the innovation process is critical. Seek out information on what they feel, the pain points they have and how to help them solve them. By undertaking this process, you will be able to learn more about your clients faster, and with the goal of understanding whether you are building the right product.
In addition, this preliminary phase should involve benchmarking activities such as competitor analysis and the drafting of a formal business case.
Experimentation lies at the heart of every company’s ability to innovate because the systematic testing of ideas is what enables companies to create and refine their most successful products.
In this phase, an idea starts to shift from a suggestion to an ‘innovation’, as this is the stage at which it is first introduced into the market, whether as a concept, a prototype, or a minimum viable product (MVP). The objective of the experiment is to obtain real market feedback to validate either a value hypothesis, a feasibility hypothesis, or both.
At the end of the experimentation phase, only the most well-received and realistic of concepts should remain for your new product. This next stage is where you will breathe life into your product idea as it is time to start design and production. This step will involve you creating an actual prototype or an approximate mock-up. Based on this final concept testing stage, you can make your final adjustments and determine whether you are ready to move into large-scale production and officially launch.
This final step is all about harvesting feedback and insight to measure your product-market fit. Learning from your customer feedback is a continuous and important process which will determine whether you need to re-visit any previous phases. When your idea has reached the initial product-market fit, you can continue to build and expand on your product and simply repeat. The key lies in making sure you think ahead and have a plan.
Many organisations fear innovation because they fear the risks associated with change. But amid a rapidly changing business arena, the biggest risk a business can take is doing nothing to drive progress and prepare for the future.
Whatever your chosen approach to innovating within the payments industry, the purpose of it should always be clear, as there are always new and changing genuine customer needs to cater for. To ensure business longevity, merchants should lay the right foundations now. By building on those foundations today, our industry can continue to innovate with purpose to enhance the payments of tomorrow.
When it comes to the future of payments, the destination is clear – a digital world where all have the expectation and ability to move money instantaneously with ease and total transparency. And, as our industry looks to navigate this evolving landscape, innovation is the most critical way to ensure that we cater to the unique and varied needs of our customers both now and in the future.
About the author:
Jie Xue is product innovations manager, solutions and innovation at Worldline.
Prior to Worldline, Jie gained experience working in the start-up and innovations space in Europe and China. She shares a passion for tech and emerging markets.