Tag Archives: fintech

How to Continuously Innovate your eCommerce Checkout Process

More and more businesses have pivoted from brick-and-mortar operations to an online presence. The prohibitive costs of physical outlets in urban centers coupled with the growing success of online platforms such as Shopify, Facebook, and Instagram, among many more, have fueled the shift. The technology and payment platforms have also facilitated businesses to transact efficiently, making eCommerce and mobile commerce the commerce of choice among consumers.

As a result of these changes, major eCommerce businesses have invested in augmented reality and other technologies to recreate virtual rooms to “try on” their products to gauge fit and appearance. However, imagine ten people walking into a retail outlet and filling up their carts with items throughout the store, and then eight just decide to leave without making a purchase. They abandon their carts right there and walk out. That is the current state of the eCommerce business.

Businesses can continue to innovate in the current environment by focusing on areas of friction, such as the eCommerce checkout. There may be many drivers for the current predicament, but the checkout process is one worth examining. Below, we look at some reasons to continuously innovate the eCommerce checkout process to help nudge consumers past the finish line.

What is the checkout page?

The checkout page on an eCommerce site is the last step of a consumer’s online journey map. Consumers land on this page after selecting one or more items they’d like to purchase after navigating the eCommerce site. At the checkout page, the visitor would submit their order, enter the billing and shipping information, along with their payment method and details.

The state of the current eCommerce checkout process

According to market research by Baymard Institute, nearly 70% of online shopping carts are abandoned. These are for consumers shopping on their desktops. The abandonment rate is over 80% on mobile devices. These rates are a testament to the fact that the eCommerce checkout process requires continuous innovation.

There are several reasons that consumers abandon a purchase at the checkout stage. Some of these include:

Unforeseen charges – additional fees are a significant reason consumers abandon a purchase as they can start to question the value of the item being purchased in light of higher cost. When the likes of Amazon offers 2-day shipping, even same-day shipping in specific markets, consumers may be dissuaded by a particular site still charging for it.

Burdensome process – maybe the eCommerce site requires you to set up a new account or log in to an existing one. Perhaps the overall checkout process has too many details required adding to the friction of completing a purchase. Maybe the site is just too slow. These points create a strain for the consumer and work against the business, leading to lost customers and sales.

Payment options – More and more consumers are shifting spending from cash to non cash methods such as debit and credit cards or even mobile wallets. Is your business equipment able to process payments for all the major non-cash payment options currently preferred by consumers?

Why do you need to innovate continuously?

Businesses need to tweak the user interface and experience for optimal results continuously. They also need to understand the exact drivers behind consumer behavior on their site to leverage that to convert a more significant number of visitors into paying customers.

A/B testing is an excellent way to learn where the friction is the greatest. Maybe customers don’t mind setting up a user account as much as they pay for shipping costs. Businesses may be offering too much incentive to nudge clients to set up an account; 10% may have sufficed instead of 15%.

All are a great way and reason to continuously test and innovate scenarios to learn from them and utilize the results to grow the business optimally.

Some areas to continuously innovate your checkout process.

Don’t require users to log in – yes, your business would have a treasure trove of data on visitors if they set up an account. However, getting them to make a purchase is the goal. Once you have contact, shipping, and payment details after completed purchase, you can continue to monitor visitors, build a profile of them, and offer incentives to create an account.

Don’t charge for shipping – This is difficult to stomach for small businesses, especially with shipping logistics stressed, and prices increase for transportation of goods. However, many prominent companies have spoiled consumer expectations in offering specific shipping for free. You may want to default to next-day shipping at a cost, which the customer can change to 2-days for the free version or vice versa. Offering alternatives still offers the free-of-cost option and the control to pay more to get the product faster.

Accept the right payment types: Payments and Fintech is a fast-growing and thriving industry. Currently, the most valuable venture-backed company is Fintech. There’s a tremendous amount of innovation in Fintech, with mobile wallets and a host of other payment options quickly experiencing mass-market adoption. If customers prefer to transact via specific payment methods, ensure that your business can accept it.

There have been many iterations in the ways consumers shop to the benefit of online eCommerce businesses. However, there are challenges for eCommerce businesses in monetizing consumer interest, and web traffic as nearly three-quarters of online shopping carts are abandoned. There is a tremendous opportunity to capitalize on this friction and continuously innovate the e-commerce checkout to improve the customer journey and convert more visitors into customers.

Frequently Asked Questions

Top Market-Changing Fintech Predictions [2023 Update]

Financial technology or fintech is one of the most intriguing fields to explore, as it entails producing new ways for financial services to work for people. It is often tough to predict where the fintech industry will go, but there are a few moves that can be projected. Here’s a look at some of the things you can expect to see soon.

Payment Changes

The first fintech prediction of note involves how people pay for things. Digital payment services are going to become increasingly essential.

The pandemic has forced many people to explore mobile payment options. The concept of contactless payments has become a necessity to follow, as it is something people are often comfortable with managing. They like the convenience of such payments, and they know it reduces the overall contact points they will have while in a spot.

Expect mobile payments to become more common in the future. The limits for these payments may also rise, as more businesses and governments will support such payment solutions. The current limit for mobile payments in the United Kingdom is at £40, for example. That total could be twice as high soon.

Singular App Support

Fintech has evolved to where people need many apps for different financial activities. Expect super-apps to develop soon.

A super-app is a program made available through financial institutions that help people manage their bank accounts and payment efforts in one place. Such apps should streamline efforts for managing financial data on the go.

Super-apps have been utilized by many consumers in Asia as of late. Expect regulations to change to allow such super-apps to be available in the United States and elsewhere. The convenience of these apps will be a worthwhile endeavor, plus they can produce an extra bit of competition among service providers aiming to make their points more visible.

BNPL Becomes Active

The Buy Now Pay Later or BNPL standard is useful for many online shopping activities. People can use BNPL solutions to pay for various items at rates that are convenient to them. BNPL efforts are essential for online purchases, as they reduce the risk associated with purchasing items. Some retailers may also appreciate the interest charges that come with some transactions. The potential for BNPL to be a viable choice for sales needs will be worth watching, especially since so many people see how useful this solution can be for their needs.

Outsourcing Grows

Fintech providers will start outsourcing their work to many tech platforms that have been utilized for a while and are already convenient for many needs. Companies will outsource to proven security processing and payment technologies. Part of this involves reducing the cost of keeping transactions moving, but it will also involve simplifying development efforts.

Outsourcing is already becoming popular, but most consumers aren’t fully aware of it yet. About half of all post-trade activities in the fintech industry move to other entities. That value will likely rise as more businesses start to notice the benefits of this work.

ESG Funds to Stay Popular

Environmental, Social, and Governance funds are expected to stay popular. ESG funds are ETFs that focus on companies focusing on producing positive influences on society. These can include reducing climate risk, increasing diversity rates in the workplace, and many other factors of value.

Asset managers will promote ESG funds more often, and there will be additional tech services available for managing these funds. Gathering information on investors who support these ESG funds may also assist people in finding interesting investment solutions.

Office Work Will Change In Many Forms

People will start to return to their offices in 2023, but every firm will have different ideas for how they will get back to physical interactions. But the ways how these offices will respond to the new working world will vary.

Smaller hedge funds will focus on physical interaction, especially when managing some sensitive details. More massive fintech entities will be fine with virtual interactions, especially since there are so many people involved in the work. Virtual actions can also increase the number of parties a team can serve at a time, providing more control and efficiency over what a business can manage.

Tokenization Rises

Tokenization is a concept where blockchain tokens represent real-world items. These tokens may represent shares in different investments. Tokenization will expand in the fintech world in 2023 and beyond, especially since it provides a democratic approach where more people can access the tokens they desire for different needs. It will be exciting to watch how tokenization changes and what items will have tokens.

AI Chatbots Rise

Customer service will be a priority for fintech developers. They’ll need to produce programs that are easy for people to use, but they’ll also need to create things that respond to whatever queries or concerns people hold. AI chatbots will be part of what fintech developers can do in the future.

AI chatbots are programs that can read customer queries and guide them to proper answers and responses through a database. Chatbots may answer some of the more common concerns or questions people hold about what’s open.

Chatbots should not be utilized as full substitutes for interactions with other customer service members. Chatbots should be complementary features that can address commonplace needs. The real customer service team members should still be on hand to answer some of the more detailed questions people may hold. Having enough control over the situation will be essential for a business that wishes to interact with its customers.

A Final Note

All these fintech points are interesting for how they suggest changes in the market. Financial technology is always evolving, and anything could happen in the field. New trends will keep changing and moving forward, providing a better experience for everyone to follow.

The best way for people to follow these fintech changes is to do sensible research into what works. Fintech can work when people understand what is open and how different activities can work for everyone’s needs.

Top Fintech Predictions For 2021

Hot Fintech Trends Emerging from the Pandemic [2023 Update]

The pandemic has been harsh on our financial infrastructure and has brought sea changes in the fintech industry. Fintech companies started coming to the forefront since the previous year, helping to shape digital payments.

In the previous year, people have taken to online shopping in large numbers, and today, almost every buyer is looking for contactless payment modes. As 2020 was approaching its end, the next one has already begun forming a new era with a promising future for the fintech world.

According to research conducted by the deVere Group, the coronavirus pandemic has been a major cause of the rapid growth of fintech apps, the usage of which increased by 72% in Europe.

The situation is similar in the US too, where around 73% of Americans are now viewing fintech tools and solutions as the new normal, as per another report. What’s more, 67% of the American shoppers have planned to continue using fintech apps for managing their day-to-day finances even in the post-COVID-19 period.

Experts have predicted the acceleration of the more fintech trends that are believed to impact every financial area, ranging from making transactions to banking. Some of the top fintech trends for 2023 are:

Digital-Only Banks

The rise of digital-only Fintech banks is one of the recent trends that made headway in 2020. Digital-only banks is the name given to those banks that offer several virtual banking solutions. These include crypto payment gateways, P2P transfers, contactless MasterCard providing free transaction fees, international remittance, and the ability to purchase different cryptocurrencies, such as Bitcoin, Litecoin, Ethereum, etc.

Digital-only banks are extremely convenient to consumers as it eliminates waiting in long queues, tedious paperwork, and the need to make frequent visits to the bank. This trend is expected to gain momentum in 2023, which in turn, would reduce the number of bank visitors.

Because of this new trend in banking, the number of people visiting banks physically is predicted to drop by 36% from 2017 to 2023. Some of the top reasons to go digital-only with your banking are:

You can reset pins right from your home.
You can manage your expenses conveniently.
They offer quick balance review features.
Enjoy instant bill payments on-the-go by snapping pictures.
Digital-only banks come with real-time data analytics.

Blockchain

The cutting-edge technology of Blockchain has transformed the fintech world completely. Since one can make payments faster and more securely, financial institutions like banks can confidently adopt Blockchain technology to stay ahead of the competition. It also comes with low processing fees and has a global reach.

According to a Business Insider Intelligence report, nearly 48% of the banking representatives believe that Blockchain technology will significantly impact the banking industry in 2021 and the years to follow.

The US and China are the leading users of Blockchain technology, which ensures its fast adoption in other markets across the world. Blockchain makes sure that all cross-border payments and the data stored are safe and secure.

One vital aspect of Blockchain is its new philosophy of decentralized finance that works on minimizing centralized procedures. The reason why Blockchain is so popular is its highly protected environment. Once your data is recorded into its system, it is extremely difficult for hacklers or malicious users to modify or access that data.

RPA

Robotic Process Automation, or RPA, refers to the process automation technology that uses digital workers or software robots to automate several tasks, thus saving time and human labor. RPA is designed to manage repetitive business processes using software robots that can fully or partially replace manual operations.

Since the process involves software robots and other digital workers, it is error-free, fast, and more accurate. The RPA technology has been largely beneficial for the financial service industry, as it improves the entire organizational efficiency in a more cost-effective manner.

Additionally, financial institutions can automate several back-end office tasks, including customer onboarding, security checks, trial balancing, account maintenance and closing, mortgage processing, credit card processing, and the list is endless! With RPA, banks can automate their core processes, thus saving time to focus on other vital areas.

Artificial Intelligence and Machine Learning

Banks across the world have started embracing AI to handle their day-to-day operations. According to Autonomous Research, AI is predicted to reduce 22% of the operational expenses of financial institutions by the year 2030. In short, banks will be able to save around $1 trillion by incorporating Artificial Intelligence technologies into their processes.

Artificial Intelligence and Machine Learning go hand-in-hand, since the algorithms of both have the ability to record each transaction with utmost preciseness and accuracy. What’s more, AI can be used to manage and mitigate the increasing cybersecurity risks and threats, as it can identify fraudulent activities immediately.

Besides, AI and ML, together, have tremendous capabilities of managing your customers through top-notch client service solutions, such as Chatbots. With such rapid growth in AI technologies and their increasing adoption by numerous industries, banks, and other financial institutions will soon implement them for better customer service.

Biometric Security Systems

In the face of rising cybercrime cases, customers are looking for more secure payment environments, since digital transactions are more of a necessity than a trend in this pandemic crisis. Therefore, companies in the fintech industry are implementing new ways to offer more secure payment infrastructures, such as biometric security systems.

Biometrics like fingerprint authentication, facial recognition, etc., is the best way to add an extra layer of protection and security to one’s payment solutions. Biometric systems help consumers to be confident while making digital transactions.

Since the current COVID-19 restrictions have made it necessary to go contactless, or more specifically cashless, biometrics is the need of the hour. However, contactless biometrics like face ID recognition is having a higher adoption rate in COVID-19 times, while the touch-based fingerprint reading market is witnessing a downfall.

Open Banking

Open banking is a revolutionary technology that enables users to manage their money more efficiently and get the best deals on products and services. It helps consumers make smarter and more cost-effective buying decisions while also accessing all their accounts in one place.

Open banking is a practice of sharing one’s financial information between authorized service providers at the users’ consent. The technology enables banks and Fintech companies together, allowing seamless data networking across multiple institutions.

Experts and industry leaders predict that open banking will reshape the banking sector as we know it. In fact, a report has proven that open banking has already generated $7.29 billion in the year 2018. The numbers are expected to hit $43.15 billion by 2026!

Open banking has the potential to benefit various banking and other financial institutions, consumers, fintech workers, API industry figures and app developers, and even underserved markets.

Open Banking Use Predicted to Double [2023 Update]

According to new research, open banking users are expected to double up and reach 40 million by the end of 2021. On the other hand, payments are predicted to hit $9 billion by 2024.

Juniper Research has predicted that the total number of API technology users aggregating bank accounts and gaining access to new services would rise from 18 million by the end of 2019 to 40 million in 2021.

Another report named, “Open Banking: Opportunities, Challenges & Market Forecasts 2020-2024” found that the pandemic was a reason behind the increasing demand among consumers to aggregate their accounts.

The main motivation behind such a change in behavior was to gain better insights into one’s financial health and how to manage one’s money more efficiently. Since the COVID-19 outbreak people have become more conscious about how and where to make expenses, and how to cut down on their costs by making only the best purchases.

What is Open Banking?

Open banking is the practice of securely sharing the consumer’s financial information with service providers, to help them provide better user experiences. The process enables you to bring all your accounts into a single place.

For instance, open banking can let consumers view account information, and even access their funds across multiple banks, all without switching platforms.

However, none of your sensitive information would be shared with any third party without your consent. You will never be asked for login details or passwords. The shared data enables service providers to develop and innovate better apps and solutions around banks and other financial institutions.

Open banking has shown consumers new ways to spend and manage their money and purchase more responsibly and cost-effectively. The practice of open banking has been incredibly beneficial for startups, SMBs (small- and medium-sized businesses), financial institutions (like banks), and consumers.

Additionally, open banking can also help businesses explore new revenue streams, have an extended market reach, and have better operational efficiency. It is a more sustainable service model, specifically for the underserved markets. App developers, too, can find it much easier to work with open APIs, saving time and labor.

Since open banking apps have proper access to your financial data, these solutions can recommend you the best products and services to save your money. This improved user experience provided by open banking tools boosted momentum for adopting open banking technologies and principles.

Key Points to Know About the New Research

Juniper reported that the rapid growth seen in open banking practices was pioneered in Europe. In Europe, regulators pushed beyond standardization and minimized the barriers to entry. The reports further showed that the practice was later taken up and advanced by the Chinese and the Far Eastern markets.

The principle of open banking originated from the 2015 European Union reforms, which were designed to help consumers switch between banks more seamlessly. The technology that supports and enhances this also enables users to make faster and easier real-time money transfers or payments. This alone has boosted the rise of numerous digital payment solutions and so-called “challenger banks.”

In the Juniper Research release, Nick Maynard, Juniper analyst, said, “Banks must embrace open banking” to capitalize and accelerate their ongoing digital transformation endeavors. Maynard further said that the practice of adopting open banking could enable banks to introduce more innovative services to their consumers backed by open APIs. Otherwise, they might risk their market position in the face of increasing, digitally agile competition.

The research company also states that payments will be vital for accelerating the growth of the industry. In fact, the total volume of payments to be made through open banking technology is predicted to be around $9 billion by the year 2024. It is mostly because open APIs are promising enough to facilitate more secure and protected “direct from account” payments.

Further, the report said debit and credit card providers should also adopt the new open banking practices and technologies to avoid falling behind in the market competition during this vital shift.

Previously in 2020, Juniper had already reported that open banking “has made significant progress,” in spite of the challenges faced due to the pandemic outbreak.

The report added that providing an enhanced open banking experience can be a compelling selling point that differentiates and labels the service provider as a part of a superior digital app experience.

Juniper researchers believe that open banking can create a high-level playing field across several markets in which regulatory intervention has resulted in the deployment of open banking practices.

However, Juniper highlighted that open banking can be both an opportunity and a threat for many traditional banks and other financial institutions. It is an opportunity because it offers improved consumer experiences and helps them get better deals while efficiently managing their money. It’s a threat because open banking exposes users’ financial information, which can be a boon for potential competitors gaining access to it. And the report states that this threat can be equal for all the players in a specific market.

Hence, established banks must build more innovative and advanced open banking services to provide high levels of security. They must offer better benefits to attract users from the still-developing or less innovative markets.

The Future

With the increasing popularity of open banking technologies, the practice opens doors to several other innovations to be made in the digital payment industry in the upcoming years. It is expected to cause rapid growth in the financial service industry as well, which is keen on taking consumer experiences to the next level.

Besides bringing financial freedom to customers, open banking is also expected to redesign the entire financial service industry and revise the current user flow to eliminate any potential friction points. This is why it is supposed to add value to the consumers while improving their financial lives in the years to come.

FinTech companies and banks have got a new opportunity and way to improve their services, and fix issues such as:

Outdated banking solutions,
Unintuitive user interfaces,
The hassle of switching multiple accounts, and
Lack of resources to bring innovative tools and technologies to the forefront

It’s clear how the adoption of the open banking model by the financial industry can positively impact the future of online banking. If the financial institutions’ transition to open banking becomes successful, then that day is not far when the banking infrastructure or the security and ownership of consumers’ data would not be a decisive factor anymore.

The factors that will matter are a smoother and more convenient user interface, and faster and more secure payment. The banking industry’s transparent future promises to offer seamless access to different accounts, payments, financial data, etc., through any third-party financial solution that can offer limitless financial freedom to users.