What’s driving innovation in payments?

The need to provide a seamless, friction-free user experience for both merchants and consumers is the key trend shaping our products, and the future of payments as a whole.

As outlined in The Future of Payments: Trends Report, our aim is to remove friction while still offering a private and secure experience for customers.

Here’s a short breakdown of how this can be achieved, the technologies pushing payments forward, and what it means for consumers and merchants.

Security and experience: a balancing act

For merchants, offering customers secure payments is critical. And this is a balancing act for merchants and payment companies alike, who want to provide the best user experience possible, while keeping customers safe.

Our recent Lost in Transaction: The Disposable Income Report found that 68% of consumers feel more comfortable using a payment method that doesn’t require them to share financial details online with a business, regardless of its size.

Local payment methods (LPMs) like eCash and digital wallets, can help deliver this – allowing customers to pay, without requiring their financial details.

And other developments are also pushing innovation in payments. In the UK, the FCA’s Consumer Duty requires that firms act to deliver good customer outcomes, including fair and reasonable pricing, customer support, and products and services appropriate for the target markets. PSD2 and multi-factor authentication (MFA) have also been pivotal. 

Broadly, these are all positive steps for merchants and consumers alike. But there are downsides: such measures can introduce more friction into the user experience. So how can merchants deliver the best possible experience to consumers?

Payments and the customer experience

A great customer experience now means allowing consumers to pay in different ways – in fact, our Lost in Transaction research found that 73% of consumers expect large businesses to offer a wide range of payment methods online.

Now, consumers just want to easily pay, the way they want – whether that’s using digital assets, credit cards, or local payment methods like eCash.

Web3 and digital assets can also play a role in delivering this, allowing businesses to offer consumers a broader suite of payment options, while making transactions easier and friction-free.

Loyalty pays

At Paysafe, our aim is to enrich the payments experience for loyal customers, empowering businesses to offer tailored experiences.

But this does present a challenge: delivering a personal experience requires a degree of familiarity with consumers, but ensuring data privacy is essential. So how do businesses anonymise and use data to deliver an effective programme?

To achieve this, Paysafe supplements anonymous data with customer research. This helps us get to know consumers and merchants better to understand pain points and offer the kind of loyalty programmes they want. For instance, do they want points, or do they want cashback?

Put simply: gathering consumer data in a way they are comfortable with, but without bothering them or interfering with the experience, is crucial.

It starts here

From travel, to video game purchases, to iGaming bets, payments are the start of the experience.

By offering security and convenience in equal measure, and embracing exciting, emerging technologies, these experiences will only get better.

Download The Future of Payments: Trends Report to learn more about how businesses, policymakers, and other stakeholders can thrive with the shifting payments landscape.