Developing a Plan to Adapt to Payments Disruption
New technologies are reshaping eCommerce. From mobile wallets and in-app purchases to blockchain and cryptocurrency, the desire for faster, easier, and more secure interactions is disrupting the payments industry, and it’s being driven by consumer demand.
This is not a momentary trend; instead, this is the future of eCommerce. Merchants need to prepare themselves for the next generation of disruptive technology.
Disruption is a Positive Force
Historically, customers, financial institutions, and governments have been the primary catalysts of change in the payments industry. But today, highly-agile startups are steering the industry in unpredictable new directions.
FinTech (and other payment disruptors) ultimately create stronger, leaner, and more adaptable technologies. These advances allow merchants to offer superior service at lower costs, benefitting themselves as well as their customers. Merchants, however, will only reap the benefits of payments disruption if they properly integrate and leverage the new technology. They will need to account for many factors, including:
- Smartphone and mobile device technologies
- A different audience demographic (younger users are more willing to adopt)
- Big data and analytics
- P2P money transfer
- Expectation of “on-demand” instant gratification
Can Your Strategy Absorb the Impact of Disruptive Technology?
How do you build an organization that is agile, forward-thinking, and adaptable to disruption? It depends on the specifics of your business. To create a winning strategy, ask yourself the following questions:
#1: What Needs to Change?
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Identify “problem areas” within the business that need to be addressed. Are your processes outdated? Is your website being outperformed by category competitors? Are you the last to adapt to new technologies? Have your sales figures stagnated?
Always look for processes that can be streamlined (or otherwise improved), to enhance customer service.
Streamlining processes will also make it easier to detect inefficiencies in your business strategy. For example, you can identify whether you need additional staff with specific FinTech knowledge, or which technologies will maximize your business’s profitability. Outsourcing certain integrations and/or processes might be more efficient than operating entirely in-house.
And that brings us to:
#2: What Will It Cost to Bring to Market?
Disruption is unavoidable, and new technologies often have a learning curve. Time spent integrating new software will affect the rest of your business, and it may be an expensive waste of time if the technology fails to deliver the expected results.
Merchants increasingly look to services that offer an all-in-one platform to bring cohesiveness to a fragmented and complicated payments industry. You can skip lengthy and painful integrations by utilizing other tools designed to simplify the process.
#3: What are the Highest-Priorities?
You need to identify where payment disruptions can have the biggest impact.
Tools designed to fight eCommerce fraud are rapidly evolving. Fraud mitigation is historically underserviced, undervalued, and underappreciated, and many “traditional” solutions are designed for a pre-Internet marketplace. Technologies offering mobile-based tokenization, biometric security, and other innovations will reimagine how merchants fight fraud.
#4. Is Your Team Ready to Adapt?
As we mentioned, disruptive payment technologies can impact different aspects of a business in unpredictable ways. Training employees to understand the payments process will prepare the organization to smoothly transition from one process to the next.
It’s essential to identify redundant processes. The goal of FinTech is to simplify complexities—but this will not be possible without identifying in-house redundancies.
Payment Disruptors are Inevitable
These changes will not happen overnight, but customers, financial institutions, and even governments are all playing an essential role in the transformation of the payments industry:
- Customers: They are seldom early-adaptors (especially when it comes to financial products), but new technologies like mobile wallets are gradually gaining steam with shoppers.
- Financial Institutions: Roughly 80% of bank executives view FinTech services as partners rather than competitors, and banks are expected to embrace collaboration and invest in new technology.
- Governments: Regulatory changes will open the payments space and enable innovation, as is the case with the PSD2 in the EU.
Disruptive new payments technologies will force merchants to change—whether they’re prepared or not. In order to succeed in a rapidly-changing marketplace, you need to adapt.
Excellence… or extinction. There is no middle ground.
Want to know more about how payments disruption could impact your business? Contact Chargebacks911® today and find out.