Creating a seamless payments experience

Advancements in payments technology and innovation from both established players and newcomers to the space are playing an integral role in redesigning the customer payment experience as we know it.

77% of consumers consider a company’s customer experience just as important as the quality of its products and services, with 74% stating they’re likely to buy based on experience alone.

When it comes to a customer’s journey with your product, one of the most pivotal touchpoints that can impact conversion and purchase decisions is the payments experience.

Following the launch of our flagship one-click payments product, LinkPay, we held a panel discussion with members of Cape Town’s fintech ecosystem at Stitch HQ. The discussion centred around one big question: How does the payments experience contribute to customer conversion and retention, and what can businesses do to continue to optimise this journey?

Joined by Zapper CEO Brett White, upnup Managing Director Tony Mallam, Spoon Money Founder Nicky Swartz, Peach Payments Head of SME Growth and Marketing Joshua Shimkin and Stitch COO, Andrew Ma, we heard a number of actionable insights that can help businesses to cultivate and nurture loyal, returning customers through a seamless, intuitive payments experience.

As upnup’s Tony Mallam put it, “Retention is key, and every single customer is crucial. If there’s a rough payments experience, it’s going to affect retention, and it’ll put people off. It’s absolutely crucial we get a smooth, seamless experience.”

Here are a few insights our panellists shared.

Shifts in consumer expectations are driving payments innovation

According to a 2022 GlobalData report on payments in South Africa, the e-commerce market in South Africa has experienced significant growth, registering a rise in value from R32.7 billion ($2 billion) in 2017 to R61.7 billion ($3.9 billion) in 2021. Primarily due to an increase in internet and smartphone penetration, as well as growing consumer confidence in online transactions, the market looks set to reach R112.7 billion ($7.1 billion) in 2025.

When it comes to payment methods, 33.2% of customers today choose to pay via bank transfer for e-commerce purchases in South Africa (growing annually), so it’s more important than ever for businesses to offer this method.

Stitch Head of Business Development Grant James outlined the shift we’re currently experiencing in the payments space in response to this growth. “We’ve seen a lot of changes from a payments perspective, especially on the African continent, and a lot of innovation that’s taken place specifically in South Africa.”

Any kind of fast-paced innovation requires businesses to address customer concerns, especially when it comes to fostering trust in new processes or technologies. Zapper’s Brett White details the progress in consumer education around digital payments and highlights a key focal point the payments platform prioritises, which centres around building consumer confidence in newer payment platforms and methods:

“We’ve come a long way since the early days when there were a lot of people who didn’t know what a QR code was. There was a big focus on education, and we had to explain every last detail and walk our customers through every step. Now it’s a lot easier, and at the end of the day, it’s just about trying to provide a frictionless journey for the end consumer.”

He continues, “The biggest issue nowadays is confusion in the market around the proliferation of [payment] options. A strong brand plays into that in terms of providing enough comfort for the consumer so they trust the entity they’re paying, how they’re paying and the application they’re using [to pay]. That’s the primary concern at this point in time – ensuring consumers feel a level of trust towards the entity they’re interacting with.”

Consumers today not only demand an instant and seamless way to pay; they expect it. Data from McKinsey’s annual Digital Payments Survey echoes this sentiment, indicating that 60% of consumers have higher expectations from digital experiences than they did before the COVID-19 pandemic, with 79% of consumers reporting that a negative checkout experience makes them less likely to return.

South Africa might still be in the early stages of adoption when it comes to alternative digital payment methods, but a deeper focus on the customer experience is driving innovation in the sector – and businesses will need to invest in providing these options to their customers or risk losing out to their competition. White adds:

“We’re all used to using international platforms, be it social media or something else. Those user experiences are incredibly slick, so if you want to retain customers, it’s important to keep the journey as easy as possible. Once a customer has tried and experienced that frictionless, safe, secure transaction journey, it engenders a lot of trust [that will result] in them coming back and utilising it again.”

Getting into the mind of your customer to provide an experience that works for them

Peach Payments’ Joshua Shimkin explains their approach to ensuring their user experience meets the specific needs of each of their customer segments: “The needs of our enterprise clients are drastically different from the needs of our startups, so we always keep the customer in mind. Going through a [payments] experience, [we ask ourselves], ‘what does the customer expect?’”

The questions Shimkin and his team ask often centre around speed, ease and interoperability: “How quick is the payment method? Does it cater for different network speeds and different executions like mobile vs desktop?”

Designing an effective payments journey requires you to truly and deeply understand what your customer expects.

Similarly, at Spoon Money, a savings and lending platform that helps South Africa’s female informal traders access savings and lending solutions, Founder Nicky Swartz understands that her customers’ lives are very cash-oriented, requiring a unique approach to enabling easy and convenient payments. This was particularly true during COVID, which forced the adoption of digital methods.

Swartz explains, “The informal sector has been disproportionately affected by COVID, and by virtue of that, Spoon as well. But it forced us to go digital, and overnight, we lost half our clients. Because they deal with cash, we needed to figure out all of those mechanisms. Now we have a payment gateway via Pay@. They’re in retail and that’s a big deal to us as most of our clients trade outside a Shoprite, so that’s exactly where they can make their payments.”

Make the movement of money a non-event

Looking at some of the most successful tech giants in the world today – the likes of Uber and Amazon – it’s possible to spot some common threads. For both of these companies, the payments process has become more ingrained within the user experience. By embedding payments directly into the buying flow, businesses can allow customers to enjoy a seamless experience that’s often described as “invisible”.

Embedded payments enable customers to make a payment in fewer steps, without leaving the flow they’re in to open a banking app or initiate a manual transfer. They can also store user data so the checkout flow is less time-consuming and tedious.

According to Anita Liu Harvey, Director of Strategy at Barclaycard, “Almost a third of consumers (31%) say they find it annoying having too many steps at the checkout, and the same percentage find it frustrating when they’re asked to re-enter all their details on a site they’ve shopped previously.”

Stitch LinkPay solves this problem by tokenising financial accounts so returning users are able to make one-click payments without logging into their accounts again, and without leaving the flow of the app or platform they’re paying into. Using LinkPay, businesses can delight their customers with an intuitive, seamless payments experience that takes place in seconds.

For merchants, the pay-off is equally as enticing. The added friction of too many steps during a checkout flow gives consumers multiple opportunities to rethink their purchase, which could lead to drop-offs. What’s more, real-time payments offer businesses insights into how customers interact with their platforms, providing data-driven opportunities for iteration. These include factoring liquidity into planning, understanding spending habits and having the ability to forecast ideal occasions for discounts or promotions – which according to GlobalData’s report retailers can leverage to boost sales.

Maintaining a high level of trust and focusing on customer education should also be top of mind for businesses when designing their payments experience. Clearly and concisely explaining the processes your customers need to take, while simultaneously reminding them that their transactions are secure is vital. To make this as easy as possible for our clients, we create personalised UI/UX best practice guides for smooth, successful LinkPay integrations, which have resulted in a significant increase in conversion rates.

Implementing actionable insights

Here are a few things you can do to start optimising your payments process now:

• Implement one-click payments to streamline your customer’s purchasing journey
• Regularly assess and optimise your payment-related UI/UX
• Ensure you’re meeting consumer demand by offering the latest and most convenient payment methods, such as instant EFT
• Design your payments process responsively, accommodating for desktop and mobile executions
• Use customer personas to inform your processes and regularly assess your customers’ needs, pain points and motivations
• Highlight the value propositions of the payment methods you offer to merchants and customers you serve via regular customer communications, e.g. paying by bank results in lower fees, reduced fraud and a quicker purchasing process