Comfort is the enemy of innovation. Comfortable businesses don’t innovate. Dissatisfaction is the key to innovation, and in the digital economy, innovation never stops. So, comfort can be costly.
The global payments market clearly illustrates this. According to a recent report, global payments, currently worth $1.5 trillion annually, are expected to grow into a $2 trillion-dollar-a-year business by 2025. At the same time, traditional banks, which have long dominated the space, may miss out on up to $280 million of that annual revenue as start-ups change the game.
A report from Accenture identifies the trend threatening those incumbents, saying: “Market trends are converging on a future where payments are inevitably becoming instant, invisible and free (IIF)”.
Instant, invisible, and free: three adjectives one does not expect to hear when talking about banks. But it’s what consumers want – and consumer payments currently account for 58 per cent of payments – and fast-moving start-ups have moved into that space. Partnering with consumer tech, whether it’s integrating payment into a ride share app or providing support for mobile payments and e-wallets for retailers to use in both bricks and mortar outlets and online, these players are going where the money is.
A good example of this is Ingenico Group’s rollout of a suite of payment options in China that respond to how consumers want to make payments. Because 82 per cent of the Chinese population are unique mobile users, Ingenico has partnered with mobile payment players Alipay and WeChat Pay, as well as local card scheme provider UnionPay. The goal is to ensure users are presented with a frictionless solution, no matter how, when, who or where they wish to pay.
WeChat, China’s wildly popular mobile app, started as a messaging app but has expanded to encompass payments, social media, and now offers ‘mini-apps’, which allow businesses to create apps that run within WeChat. Ingenico, rather than interrupting the WeChat experience, looked to develop a seamless experience. It supports all use cases for WeChat Pay, including the capability to integrate into WeChat Official Accounts and Mini-Programs. This allows the 1.1 billion WeChat users to complete their purchase without leaving the WeChat environment.
Similarly, Ingenico offers an upgraded Alipay integration to its customers, enabling these businesses to reach online consumers in China, while also allowing them to offer real-time payments, both on desktop and mobile devices.
"Our long-time presence and activity in China means that we are perfectly positioned to partner with merchants wanting to access the truly local consumer market. Our expertise here, combined with this new set of payment capabilities, will allow international merchants to reach Chinese consumers that were previously difficult to access,” said Ingenico’s Gabriel de Montessus.
It's not just China where connecting with consumer tech leaders pays dividends for payments providers, though. A Capgemini report on payment trends for 2019 found that 80 per cent of customers said they were more likely to return to a business that provided a quick payment process. It is those expectations that are driving the trend toward businesses providing an ‘omnichannel’ payment experience.
The days when payment providers could get in the way of the purchase process and take their cut, from merchant and customer, are nearly over. Both merchants and consumers want smooth, painless payments and traditional players need to meet that demand. ‘IIF’ they don’t, there are plenty of players that will.