5 ways retailers are adapting to FinTech revolution
The digital transformation of finance is changing the way people think about shopping and as the FinTech industry matures, a wider range of products and services are being used by retailers online and in stores.
Here are five ways in which some of the latest FinTech innovations are creating added value and a better customer experience.
Online customers can be given the choice to see and touch products before paying for them as well as having the opportunity to pay in instalments. FinTech companies are enabling retailers to seamlessly integrate this service into the checkout process pre-authorising any credit available to the shopper. While the retailer gets paid the full amount payment companies like Klarna take on the credit risk.
Banks can now give their customers the option to allow third party access to their accounts with retailers providing new payment services and loyalty programs that reward customers without them having to fill out lengthy forms or carry separate cards. Airline KLM is one of the first companies to offer bank to bank instant payments. By using open banking APIs they can transfer funds directly and don’t have to hold payment card details.
With the growing popularity of popup shops and outdoor festivals the ability to take card payments using mobile devices has made it easier for retailers to go where their customers are. As long as an internet connection is possible via a mobile dongle the days of cash only is now becoming a distant memory. In the most recent developments Dutch bank ING is currently testing software that can turn a mobile phone into a POS terminal without having to use any additional hardware.
On a global basis there is yet to become a universal way to pay electronically. As mobile wallets are popular overseas they are not as widely used in the U.K. FinTech companies are helping retailers offer preferred payment options to visitors who like to use QR codes on their mobiles. In the case of WePay and AliPay Chinese visitors can now pay using QR codes providing a better customer experience.
As seen with Amazon-go, stores are now evolving to serve their customers without any human interaction. No registers, checkouts or queueing the shopper scans their app on the way in, picks up their items and simply walks out. The customer is then charged directly to their account and is sent a digital receipt. Sainsbury’s and Tesco are the latest supermarkets reported to be trailing checkout-less technology.
Investment in FinTech in the UK is at a record high and what were once fledgling start-ups are now unicorns valued in their billions. Awareness of these new brands is driving FinTech adoption as customers look for alternative ways to use their money.
New regulations have opened the doors for retailers to offer services by partnering with banks and start-ups or by developing their own licenced FinTech platforms.