By Sankhadeep Chakraborty . October 01, 2021 . Blogs
If we are to evaluate the major challenges for B2C or B2B companies and their customers in most domains, payments would often be at the top of the list. As the world became more mature and connected, trade and business practices too evolved without borders. The underlying monetary frameworks have matured considerably to accommodate new-age payment options necessary for market competence.
Over time, debit and credit cards literally made wallets lighter as consumers don’t have to carry cash bills always. But today, nearly every country has witnessed a massive paradigm shift in the way payments are done within their financial framework. Digital payments have risen to the front and made even carrying cards an obsolete trend. It is expected that 2021 will see digital payments worth USD 6.6 Trillion happening worldwide.
The surge in digital options has created an ecosystem where payments are increasingly becoming frictionless for customers and businesses. In other words, payments are becoming invisible in a business transaction making it hassle-free for customers and businesses. Take for example the experience of booking a cab via Uber. No longer does a rider have to pay cash or card to the driver or cab company as in the past. Payments are electronically settled in the cloud with acknowledgment receipts sent to both driver and passenger upon completion of the trip. Further, customers with pre-charged wallets linked to their Uber account enjoy a near bother-free payment experience as their wallet balance is automatically debited at the end of a successful trip.
Another popular example is subscriptions for various digital services like Spotify, Netflix, Prime Video, YouTube Premium, etc. Consumers only have to link a payment channel once and the service provider charges the recurring fee autonomously till the time the customer chooses to retain the subscription.
These are just a few amongst the several examples of frictionless experiences that are transforming the payment landscape into an invisible entity. So, what does the future hold for invisible payments?
Based on the growth trajectory witnessed historically, digital payments, in a short time frame, are expected to radically progress from what they are now. Innovations happening in challenging yet large markets like India and China are a prime example of how technology can help bridge the large cultural gaps between such developing economies and the western world. Historically, these markets play catch-up to the West and were slow to adopt a cashless payment ecosystem, which the West spearheaded with cards for over decades now. However, in the invisible payment ecosystem, countries like India and China have advanced their tech significantly even without taking inspiration from the magic happening elsewhere.
So, here are some innovative invisible payment options that are likely to go mainstream in most parts of the world soon.
Smartwatches are no longer a niche style statement, but a mass-market commodity. NFC-enabled wearables like smartwatches, fitness bands, and other consumer wearables have the potential to disrupt the payment industry altogether. Customers could simply tap their watch at the sales counter and the transaction amount gets debited from an e-wallet or card or bank account linked to the watch via NFC. Payment becomes as simple as that. In fact, by 2026, it is expected that globally nearly USD 82 billion worth of market size will exist for wearable payment [RG1] devices.
You have already seen how Amazon Go Stores work using a combination of AI, Machine Learning, IoT, and motion sensors. This concept of cashier-less, walk-in-walk-out stores will become more common. In fact, Carrefour recently opened a similar store in Dubai which is an indicator of more retailers willing to bring out practical variants of the cashier-free store concept. Payments in such stores happen autonomously from an e-wallet or linked card or bank account of the shopper’s account for the store on his or her mobile app. This is taking invisible payments to the next level.
The tremendous strides made in AI-enabled facial recognition and the mature levels of secure validation via biometric signals will see a whole new range of payment options popping up for digital and physical commerce. China already has mass-market biometric payment options deployed across different industries. There are stores where customers must just smile at an AI-enabled camera at the check-out counter and their bank accounts or cards will be debited for the purchases they made at the store.
In all the prospective invisible payment initiatives detailed here, you can see that it is minimal or zero hassle for customers to make payments for any service they availed or for any product they purchased. This future of frictionless payment[RG2] is where ultimately all businesses must focus on with regards to their customer experience initiatives. Even though it is the most crucial part of a sales journey, payments must undergo a radical transformation to accommodate more complex digital ecosystems that are being created across every domain.
Get in touch with us to discuss invisible payments and how your business can leverage them for continuous success.