Evolution of people’s relationship with banks
Challenger banks, personal finance management apps, savings gamification – these are just a few of the things that are expanding the way people interact with banks. More and more people are using their banks for other services, including account-to-account payment services that provide convenience and flexibility. They have also come to expect organized and personalized digital experiences. In this new world of digital commerce influenced by the pandemic, consumers expect fast, secure and convenient payment experiences. There is no turning back to greater friction.
The fast and the flexible
Account-to-account payments (or online banking payments) that use a consumer’s bank connection to authenticate the user are a natural progression for multi-channel shopping in a post-pandemic world. For example, if someone wants to buy something online and pick it up in store, payment flexibility is crucial. This is also the case if the goods are delivered to your home and you pay for what you keep, or for a more experiential retail where different in-store services are accessible.
And when it comes to refunds when returning merchandise, account-to-account simply outperforms card payments. Instead of a refund taking several days to arrive after the returned goods have been received by the merchant, account-to-account refunds are settled almost immediately. If consumers are offered an instant refund, they will choose this option so that they can make new purchases as soon as possible. This is a proven way to increase revenue and build customer loyalty.
The benefits of offering payments in conjunction with account-to-account payment services are not limited to refunds. Customers of financial institutions such as lenders, investment firms or insurance companies often complain about slow payments. These institutions, just like their E-com counterparts, spend an enormous amount of time and money supporting these clients who are waiting for their funds. Fast payments offer the opportunity to remove (or at least reduce) customer service from the customer journey – a huge differentiator that will surely influence the digital native.
A growing appetite for new digital payments
There has undoubtedly been an acceleration in the shift to smoother digital money transactions during the pandemic. Even Mastercard admits that the appetite for new digital payment methods is growing rapidly. About 63% of global consumers have tried a new digital payment method that they would never have tried before. In this same poll, 41% declared a preference for biometric control. Payments are increasingly merging with digital identity for ease of use, involving biometrics, which also eliminates identity fraud.
Additionally, in our own survey of 10,000 consumers across Europe, 53% of 16-24 year olds said they preferred to use their fingerprint or facial ID rather than entering their card details for them. payments. This number rises to 45% in the 25-30 age group. There are no mistakes with biometrics as opposed to, say, entering the wrong bank card digits at checkout, which then creates an unnecessarily disruptive experience for the consumer when trying to correct the error. . Not to mention the administrative costs incurred for the merchant.
Grow on a global scale with the account to account
In addition to administrative fees, it is important to note that fees increase for credit and debit card payments. The cost of doing cross-border transactions is rising and regulations around Brexit and other issues haven’t helped. For businesses to grow globally, they need to be able to transact frictionlessly, and not pay up to 1.5% or more in cross-border fees. Trustly, with a banking network of over 6,300 banks and access to over 525 million consumers worldwide, is the clear leader in account-to-account payments and is fueling the shift to a cardless society. By bypassing traditional card rails, merchants can process payments up to 50% cheaper than card payments. Consumers will never pay a fee for using Trustly and can buy from online stores (which offer Trustly when paying) outside of their own country, regardless of currency. This is what is meant by âstaying local to become globalâ. By offering local payment preferences, online businesses can expand their reach beyond borders and grow exponentially.
To learn more about Trustly’s full-service, scalable, cost-effective and consumer-preferred payment solution, visit trustly.com.
This article is part of the 2021 Payment Methods Report – Latest Trends in Payment Preferences, a comprehensive overview of the payment methods being considered for 2021, as well as best practices for optimizing payment and converting customers to addressing digital transformation, security and localization.
About Ciaran O’Malley
Ciaran is the Vice President of Partnerships, having joined Trustly as Head of Business Strategy in 2016. His team is responsible for Trustly’s relationships with payment service providers, platforms and other technical integrators. At the same time, he was involved in Open Banking in the UK and other industry initiatives such as SWIFT’s API Pay Later standard.
Founded in 2008, Confidence is the global leader in digital account-to-account payments. Able to manage the entire payment process, Trustly is unique compared to the competition. In 2020, Trustly processed over $ 21 billion in transaction volume across its global network. Trustly has over 600 employees across Europe and the Americas.