Think Mobile First
So Why Are You Putting Your Mobile Payment Options Last?
By Adrian Kistasamy
Group Sales Manager, PAYM8
Adrian stands at the forefront of one of the fastest moving technology industry trends: Merchant specific payment solutions. He’s spent the past three years evangelising an industry-wide shift to evolving payment methodologies according to the financial expectations of clients and has helped position PAYM8 as a leader in providing payment solutions in Africa within the SMME market.
RETAIL INNOVATORS: In A Fast Changing World Customers Are Thinking Mobile First.
So Why Are You Putting Mobile Payment Options Last?
You used to need a bank to collect payments from your customers. But now the payments landscape has expanded to include telecommunications companies, retailers and fintech’s, with innovative new technologies being offered that improve the customer experience and increase customer utility. The broadening of players within the ecosystem, expands the distribution network for payment and collection offerings, with a range of services on offer from mobile payments, collections and money transfers.
The past decade has seen a monumental shift from physical payments to digital. While cash is still king for South Africa’s low-income consumers, the accessibility and acceptance of new digital payment channels are fast changing the payment rituals of many customers.
According to payments and commerce analytics company PYMNTS, Africa has the second most mobile payment users in the world.
The future infrastructure for payments in South Africa needs to be flexible, inclusive, low cost and scalable. Payments are an important unseen part of the customer journey. In the past, consumers engaged with companies from defined access points, such as stores, telephonically and through sales reps , with most interactions completed during designated business hours. Now customers can engage from multiple touchpoints – from a laptop, mobile phone, iPad or pop-up store. The goal is to have all customer’s access and payments managed consistently across all touchpoints.
One of the fastest-growing payment touchpoints is the mobile phone.
Today there is no doubt that for many of us our smartphones have become our banks. Offering a mobile payment channel is not just smart, it’s imperative in today’s digitally connected world. Africa is the global leader in mobile money. Mobile network operators have dominated mobile money services in Africa for the past decade. In its report – Mobile Financial Services In Africa – McKinsey notes that there are over 100 million active mobile money accounts, translating to one in ten adults using these platforms. Innovations like Apple Pay, Samsung Pay and the introduction of cardless banking are changing the way South Africans shop. It’s about convenience, security and accessibility.
Payments ecosystem players need to rethink how they both compete and collaborate.
The convergence across industry sectors requires new partnerships – partnerships that put the customer first. Partnerships that can also use already established platforms like WhatsApp. It’s why payment gateway, PAYM8 has used the WhatsApp platform to deliver a new product offering called PAYM8’s Ezzi2Pay. The methodology conforms with global standards and caters for credit and debit cards, making it a convenient and cost-effective alternative for immediate payment, while helping to improve collection rates. Consumers need not register, and with easy merchant registration, customers can now make an immediate payment whilst using the WhatsApp channel. It’s these kinds of alternative payment channels that offer every kind of business the chance to accept payment securely, in any location, regardless of the size of the business.
It’s been proven that the more options consumers have to make payments, the more money will be collected and at a higher velocity.
TransUnion reports that consumer credit extension in South Africa is currently around R1.8 trillion, with approximately 9% of this debt at least 3 months in arrears. Also, around 45% of the approximately 22.5 million credit-active consumers have impaired credit records. This is a major obstacle to collections activities as it becomes increasingly difficult for credit providers to collect payments as the level of debt rises, with many collectors across multiple industries trying to solicit payments from the same consumers. Customers in delinquency are sensitive to the contact method chosen by the collections agency. Many customers expressed a preference for digital channel engagement. When contacted digitally they are more likely to make a payment.
Payments can be made easier and safer, both online and offline, by switching to mobile.
By using already established platforms like WhatsApp, switching consumers to a new payment ritual is easy. Service providers need to understand what drives consumer behaviour and offer solutions and products to truly meet these needs and contexts. A Deloitte publication Payments Disrupted, noted that non-bank payment providers (e.g. fintech’s) are often able to offer a simpler, swifter user experience, for example, by using mobile apps. In contrast, banks, with their heavier compliance obligations, have traditionally invested more in security and resilience. FinTech’s are often praised for their ability to address a specific customer need, rather than trying to be everything to everyone.
The payment channels you offer your consumers will define your bottom line.
As the world, moves further down the path of digitalisation, more and more businesses are adapting their offerings for the digital age. By offering multiple payment channels to your customers you can allow them to choose the payment option most convenient to them. And that ensures that payment is more likely. It’s a simple business growth imperative that you need to start thinking about today!