Recently, our content team sat down with VoPay CEO Hamed Arbabi to discuss the changes in the payment technology and gain his insight on what he thinks is next. Undoubtedly, the rise of online payment methods and digital payment solutions has brought the functionality of payment processing to the forefront.
With the payment processing solutions market targeted to hit USD 147.4 billion by 2027 and no slow down in sight, we wanted to get Hamed's perspective on what's changed in the industry, the impacts businesses can expect, and lastly, how to come out on top in a digital world.
We are what we do. How we shop, pay for things, and do business has radically transformed in the last five years. In the financial world, technology has come a long way. We have seen a significant uptick in neo-banks, digital lending platforms, and financial management apps.
The world has become more digital, and consumers have been fast to embrace it. Digital transformation has brought change, innovation and opportunities we have yet to explore. We are just on the precipice of seeing how businesses will grow and adapt, which is quite exciting.
There is no single industry that has not been touched by digital transformation. As a result, it has been at the top of every business agenda this past year, including every financial services firm. In fact, according to Payments Journal, more than 90% of banks doubled the pace of their transformation in 2020. Two years later, this is a trend that is not going anywhere.
When we look at some of the most successful companies today, the likes of Apple, Tesla, or Microsoft, we can see that they all share the same ethos. They are constantly evolving and searching for the best ways to use technology. They take everything they do to the next level to improve business processes, increase customer value, and innovate how they connect with consumers.
Companies found the faster they moved towards digitization, the more they benefited from stronger customer loyalty and increased profitability.
(The team at VoPay dug a little deeper into this and found that it seemed to be true, companies that embraced digitization have set themselves up for success. Tending to benefit from stronger customer loyalty and increased profitability. Arizent’s Building a Future-Ready Tech Strategy 2022 delivers valuable insights on how businesses can best prepare.)
Every day we use services or products offered through digital channels. Upstarts such as Apple pay, Uber Eats, and WealthSimple have changed our habits and altered our expectations. Consumers increasingly expect fast and on-demand service. They expect to use their smartphones to pay for groceries, they want to invest in their RRSP on a Sunday afternoon, and if they apply for a loan, they want to do it online and receive the payout in less than twenty-four hours.
Digital transformation has weaved into every part of consumers' financial transactions. If we can buy a couch from Amazon and have it delivered in less than three days, why can't a mortgage or loan disbursement occur just as quickly? Like it, love it, or hate it, we have transitioned to an on-demand world, and how we pay and get paid has become a critical component for businesses.
The days of "business as usual" in payment processing have come to an end. Companies can no longer rest on their laurels; payments are not just a back-end function. No one is waiting for a cheque in the mail or standing in line at the teller with a money order to be processed. Payments are a front-facing component of everyday business experiences.
The Payments Industry Must Emulate Netflix, Not Walmart, To Survive The Digital Shift
The pace of change in payments is breathtaking. Earlier this year, Payments Journal reported on the new payment technologies that have emerged since the pandemic. I think the stats speak for themselves.
19% of consumers began paying with their card by tapping or waving it at a payment terminal.
15% of consumers began using smartphone universal wallets.
14% of consumers began using retailer-specific payment apps.
14% of consumers began using chip cards.
13% of consumers began using a smartwatch or other wearable with a universal payment wallet.
13% of consumers began using a QR code to make a payment.
12% of consumers began using a smartwatch or other wearable with a retailer-specific wallet.
There is no disputing the rise of digital payments, ushering in a new era. Eliminating cash, streamlining transactions, and ultimately making our lives easier.
The game has changed; it is no longer simply cash, cheque or credit card. Today's world of payments is propelled by Open Banking, APIs, real-time payments and embedded finance. With a more diverse payment landscape and so many different payment options available, consumers want the ability to select a payment solution that works best for them.
Merchants have always needed to adapt to new trends and technologies to stay current, grow their customer base, and increase conversion rates and now is no exception.
That "last mile" of the customer journey has become a crucial, pivotal point in the customer experience. As such, the final payment process can make or break the customer experience. There is no point in investing in an acquisition strategy if your customer can't pay the way they choose.
Digital transformation entails more than just changing functionality and user interfaces. It's a massive movement reshaping the business processes we've become accustomed to.
Today's technology is helping people and businesses to make their tasks more accessible; it is helping them reduce costs, retain customers, and operate more efficiently. That is what we do. It is about leveraging the power of payments to deliver that immersive customer experience.
At VoPay, we are excited to be at the heart of the digital transformation journey. We are here to reduce friction, improve service and remove those pesky payment touchpoint challenges. In other words, we help businesses rethink how they engage with customers and their payment journey. This includes new digital channels for payments. Ultimately, organizations that invest in strategies that help customers pay and get paid safely and efficiently will be the ones to succeed.