Omni-Channel Payments is Not Fit For Purpose
Moshe Winegarten, Chief Revenue Officer of e-commerce payments provider, Ecommpay, argues that opting for omni-channel for payments isn’t necessarily the one-size-fits-all solution that merchants need.
E-commerce was not borne out of COVID-19; no question it benefited from the imposed restriction on physical retail activity. And consumer-facing businesses moved quickly, supported by technology partners, to support their customers in the unprecedented circumstances. However, two years on from the restrictions – and with physical trade back to pre-COVID levels – using one payment platform for all customer transactions (omni-channel) is no longer a fit for purpose solution.
Being able to serve customers seamlessly across all channels and providing a wide range of payment options is essential. However, using one provider to deliver multiple payment types across every one of these channels may not be in the best interests of the merchant or their customers. The priority must be providing the best service to customers. A key way to achieve this is by being able to identify customers across channels. And whilst many have believed that using a single payment provider is the only way to achieve seamless payments and a good customer journey, this approach leaves customers at a disadvantage, having to deal with rudimentary payment solutions.
Many payment providers do offer omni-channel solutions, but most of these began life as a single channel provider and they have rushed to tack-on additional solutions as and when customer demand required it. While the provider is able to claim they offer omni-channel payments, many elements of their offering remain very basic.
The volume of partnership announcements between merchants and omni-channel payment providers seems to suggest that omni-channel is the one-size-fits-all miracle payment solution for all online and in store customer interactions. But that is outdated 2010 thinking, and for businesses that are following the omni-channel mantra, perhaps almost blindly, could be missing out on key customer and payments benefits without even realising it. An omni-channel and single supplier approach to payments processing is not necessarily the right answer. Instead, working with specialists for each channel – on and offline – can ensure that the customer experience is aligned to expectation. It also ensures resilience.
What’s changed?
At one point, omni-channel was a buzzword, the ultimate solution, and it certainly helped many businesses traverse the challenges of COVID-19 lockdowns. 2010, arguably the peak of omni-channel hype, may not seem long ago, but a lot has changed since the year the Burj Khalifa opened, the first iPad was released, Instagram launched and ash from an Icelandic volcano with a name no one can pronounce brought airports to a standstill across Europe.
In 2010, we didn’t have the same plethora of e-wallet solutions we have today. To make a payment you needed cash or card – or maybe even a cheque. Today you can pay on your phone or watch in store or pay online at home before arriving to collect. You can even Buy Now Pay Later (BNPL). Who needs a wallet today, when an e-wallet will do? The payment tech advances in the past ten years are incredible, undeniably accelerated by the pandemic, but certainly already well on their way before COVID-19 had a name – or an emoji.
The world has changed since 2010. So why do we expect the same payment solution to be suitable for merchants 14 years later? Customers certainly don’t hold the same expectations they did in 2010.
Customer preferences
A consumer survey commissioned by Ecommpay found that 72% of consumers would be likely to abandon the checkout and/or seek a different option elsewhere if their preferred payment method was not available when completing an online payment transaction. 92% said the payment process is important in their perception of brand experience. 72% feel it is important that the payment process and options remain the same with a brand whether shopping online or in-store.
A survey of Business leaders, with an e-commerce offering in the UK revealed the biggest payment challenges of 2023 included keeping up with the latest technologies and payment trends (43%) and customers abandoning a purchase if their preferred checkout method wasn't available (33%). Almost one in three businesses (29%) also named payments as one of their biggest e-commerce challenges.
To meet growing consumer demand, 42% of businesses adopted Open Banking in 2023 and a further 31% plan to in the near future. Businesses are keen to utilise Open Banking as a payment method (24%), for payment processing (24%) and for subscription management (23%).
Other new payment methods e-commerce businesses already offer include payments through social media apps such as Instagram and Facebook (66%) and payment links or QR codes (70%).
Omni-challenge
The original pitch for omni-channel payments focused on aligning digital and physical. Merchants were promised the ability to track customers and their associated payment methods across all channels within a single business landscape. The reality is, however, that online is much more complicated than that, and a specialist online payment provider is invaluable.
The original perceived value of omni-channel payments has also significantly eroded throughout a decade of technology advancement, diversification of services and high-consumer adoption for Alternative Payment Methods (APMs), specifically such as ApplePay, GooglePay, PayPal and Klarna. Such APMs not only provide a simple, secure and compelling customer payment experience but the characteristic tokenization technology on which they are founded means that there is no longer any way to associate an individual customer’s online and instore identity using only their payment method.
For example, if a customer made a purchase online through ApplePay and chose to return the item in store, they would come up against a refund challenge when their online token was different from the token they have in store. The two are disconnected. Similarly, if a customer paid online with Klarna or PayPal, there’s no way to link them in store. So, what is the benefit of both physical and digital payments being handled by the same provider? Surely a multiple acquirer strategy delivers both resilience and specialist expertise.
Another issue with single supplier omni-channel payment solutions is the inability to achieve equality in pace of change between in-store (POS/ePOS) purchasing and the comparatively agile advancement in online payment controls. Delivery of continual improvements to the all-important customer journey and security can be significantly inhibited if updates, developments and other improvements are restricted to the same roadmap timescales across digital and physical purchasing.
An expert in POS payments does not necessarily have the expertise for the best digital payments experience. As the volume of online business increases, merchants need a multi-acquirer strategy to be resilient and address economies of scale. That means looking for the best online payment provider.
As a dedicated and focused online expert, Ecommpay stays ahead of changes, predicts growth opportunities and offers a diverse range of solutions to optimise capability for what is now largely recognised as the dominant growth channel for many businesses – including alternative payment methods and Open Banking. For merchants of significant scale and critical processing, we recommend a multiple acquirer strategy for both resilience and specialist expertise.
About Ecommpay
Ecommpay is an entire financial ecosystem, allowing businesses to make and receive online payments globally. Founded in 2012 and headquartered in London, Ecommpay combines direct acquiring capabilities, 100+ Alternative Payment Methods, mass pay-outs, a proprietary in-house risk management system and more within a single, unified integration.
Payment solutions, Individually tailored, Reliable, Secure, Intelligent.
