Consumer preferences become more sophisticated as technology advances and new technology emerges to address increasing expectations around personalization. Learn how to stay one step ahead in this neverending volley between what consumers want and the technology that can meet their needs.
While digital payments continue to evolve, one thing is clear: personalization continues to be a driving force and is in high demand among consumers. Not only have consumer expectations around personalized experiences skyrocketed, but merchants, banks, and FinTechs have all dramatically improved their ability to cater to these expectations. The amount of data that these entities can access, analyze and use for greater, more customized options has changed the payments game.
The global digital payments market size is forecasted to reach $175.8 billion by 2026, with a CAGR of 20 percent. The prevalent mobile-first mindset is pushing growth in this area, with countries that embrace mobile realities taking the lead in electronic transactions. We look at how the digital landscape — and various economies within it — are creating a more personalized payments world.
Mobile Banking & Merchant Apps
Mobile banking has been a contributor to this shift. While mobile banking and mobile design used to be differentiators, they are now table stakes. Consistent mobile and desktop experiences are increasingly common and the mobile digital experience has become overwhelmingly seamless and easy.
As a result, the bar has been raised higher when it comes to mobile banking design and personalization. Financial institutions are giving FinTechs and app developers a run for their money when it comes to the design and personalization of apps. User experience has been enhanced and payments have been made frictionless.
The software vendors that serve these institutions are thriving in this new mobile digital era. Increased flexibility, the availability of more data, and enhanced design capabilities have allowed vendors to deliver a top-notch mobile design that caters to each customer’s needs. This includes navigation that promotes engagement, making features in-line accessible from any screen, and using tiles to represent features.
People tend to use an app more when it enables them to customize how they use it. That means payments and FinTech app developers should pay attention to the features and functionality that end-users will have access to within the app — and the overall experience. This is where personalization can make or break usage and engagement. Seemingly small things like enabling a change in language or allowing users to give nicknames to accounts are the types of personalized touches that will draw users in and keep them engaged.
Consumers have also made it clear that they expect more contextual personalization around loyalty rewards and coupons available through mobile payments apps. Consumers in the U.S. have come to prefer location-based discounts and coupons delivered directly to their smartphones. One execution of this could include sending push notifications to shoppers who are in close proximity to a retailer’s store, offering a discount for an item they have looked at online. Retailers that use payment terminals with beacons can acknowledge consumers at the point of sale through their mobile app, providing the option to pay for their purchase in-app and apply any rewards points that exist in their account.
The platform economy is working hand-in-hand with mobile payments to transform expectations around payments, especially the speed of payments. The platform economy is one in which, technology frameworks serve to match two concerned parties (consumers, businesses, entrepreneurs, general public) with compatible interests on a platform — wherein they can further share or sell resources and products or services. Some popular examples of the platform economy include gig or work-for-hire transactions, vacation rentals by owner, food orders, and personalized goods and services sales.
The mobile channel has facilitated faster payments, enabling the platform economy to focus on addressing customer expectations around personalization. The platform economy has grown exponentially in popularity over the past several years, at least partially due to developers’ ability to create sophisticated, streamlined, and personalized payments experiences and offerings based on user data and feedback. For example, users that log into an online ticketing marketplace app and make a purchase may find that future deals that are advertised are more tailored to their behaviors. If a user is a budget shopper, the deals displayed for them may be weighted toward lower prices.
Mobile banking, mobile apps, and the platform economy — are just the tip of the iceberg when it comes to driving factors that are enabling personalized customer experiences. “Customized shopping and payments experiences” is the name of the game and, as payments technology continues to advance, consumer behaviors and preferences will only grow more sophisticated. The onus is on financial institutions, merchants, FinTechs, and others involved in the payments process to look at the data and garner important insights about how consumers are shopping and paying — and to create tailored experiences that outshine the competition.