Merchants want in-app and in-web payments. Can your bank deliver?

Merchants want in-app and in-web payments. Can your bank deliver?

Appealing to merchants with in-app and in-web payment products is one of the most effective ways your community bank can build business. It’s a top priority for merchants, who view in-app and in-web payment products as a critical tool to increase sales.

Why? Their customers expect it. Businesses that don’t make it easy for customers to make purchases on the go are losing out, and they know it. Right now, merchants are fighting extremely high rates of shopping cart abandonment, as much as 74.2 percent.

What does cart abandonment have to do with my bank?

Business owners are struggling with this issue. Your bank can deliver the products they need to overcome it.

One of the most common contributors to cart abandonment is the payment hassle aspect. If a customer must stop mid-transaction to manually add their payment information, it’s likely they will leave the merchant site without buying anything.

Consumers want a shopping experience that auto-populates their payment information without them ever having to leave the app or website. The solution for that is to accept digital wallet payments; businesses need this service, and will expect to see it as part of your merchant services mix.

Understanding the digital wallet

Internet-based digital wallets securely store an individual’s payment information in a user profile (on a personal computer, for example). Examples of Internet-based digital wallets include general purpose options like Visa Checkout and MasterPass, but also business-specific digital wallets, like what you use when shopping on Amazon for example, where within the Amazon platform, you can create a user profile and securely store your payment details. Internet-based digital wallets work on any web browser. It does not matter if you are using a computer or smartphone. The only requirement is secure access to the user profile.

Device-based digital wallets, on the other hand, securely store an individual’s payment information within the device itself. The device owner only needs to type in his or her payment credentials one time; from that point forward, the data is kept securely in an encrypted storage center, and is automatically sent to the merchant at point of payment. For an in-store transaction, device-based digital wallets use near field communication to enable tap and go convenience. For in-app transactions, device-based digital wallets auto-populate on the payments page in a single tap.

Both methods are exploding in popularity as customers become more comfortable with what a digital wallet is and how to use it, and as merchants realize how much more they can sell when these payment conveniences are enabled.

What is the payment product my bank would be selling?

You would provide your merchant banking clients with digital wallet payment technology. In turn, these merchants would have the ability to accept payments from customers using digital wallets, whether those customers are in a brick and mortar store, browsing on the business’s website, or ordering through its app.

It’s worth an exploratory conversation with your merchant services provider to identify if they can support digital wallet payment technology, and what that would look like for your bank.

Why should my community bank add this to our product set?

This service gives the bank an effective way to cross-sell and upsell your existing merchant business portfolio. It is worth noting here that the technology is experiencing explosive growth and popularity across three major categories, food and drink, clothes, and tickets for live events (source: Retail Dive). Consider how many of these business types reflect your merchant mix, and you can see the lucrative appeal this technology can hold for your bank.

In addition, the ability to sell and support in-app and in-web payments gives your bank an attractive selling point to capture new merchant business, much of which is e-commerce based. These digitally savvy business owners consider in-app and in-web payment technology as a table stakes requirement of their financial services partner.

How can I evaluate technology partners?

Start the conversation with your merchant services provider. At a minimum, they should be able to provide evidence of prior successful payment integrations via in-app or in-web environments; present realistic integration timeframes and outline how these deliverable deadlines are supported; identify a competitive price for supporting your financial institution with in-app payments integration service.

Beyond these basics, focus on merchant services providers that can work with your bank after integration. An ideal partner will help your bank sell its merchant services products on a go-forward basis. They will do that by having the staff and the know-how to serve as an extension of your bank, supporting the bank-to-merchant relationship.

Who will handle customer questions about digital wallet payments?

You should expect your merchant services provider to handle that. If a payment provider is not structured to support customer service needs as they arise, be wary. This is part of what you are paying them for, and it’s a service you should insist upon.

After all, frontline staff are most effective when they are selling financial products; this merchant services model frees them up to do exactly that.

When this service is done well, you’ll know it. Merchants will share anecdotally what their business banking volumes already reveal. Customer sentiment is good, sales are up, and you played a pivotal role in making it all happen.