Customers like to be heard. Successful businesses know this. They also understand that in today’s world, speed and convenience reign supreme in e-commerce and payments. Knowing your customer is crucial if you are to build an enduring relationship with them. You need to gauge what makes your shoppers click, what they like, and how they pay. Engaging relationships lie at the heart of loyalty. It means offering an experience that delights and enriches shoppers, meets their needs and does so in a manner that connects them to your brand. You need to understand how consumers think and how it influences their buying decisions. The right payment strategy can help you crack this elusive puzzle.
Changing Consumer Behaviour and E-commerce Payments in Europe
Consumers today demand more control and flexibility over how they spend. Much different from how it was just a couple of years ago. They welcome ways that help them manage their money well. Hence, more are choosing to use subscriptions and installment payment options. Rewards and loyalty programs have become more popular, with buyers preferring merchants with more attractive reward programs. In Europe, traditionally a pro-cash market, more and more people are moving to digital payments.
The desire for safety and convenience is leading more people to seek out contactless payments more than ever before. Two in three Europeans now prefer contactless payments. Digital wallets have become Europe’s preferred payment method.
Account-to-account payments are also on the rise across Europe. So are mobile commerce and in-app purchases. A maturing open banking framework in Europe is driving much of this. As consumers demand more, payments are becoming more embedded into shopping journeys. Easy credit like BNPL is growing at scorching rates throughout Europe. Both younger and older consumers seem to love the flexibility they offer. Debit card usage is growing as people seek more control over their spending. Older folks and high-income group shoppers prefer credit cards more for rewards points and offers.
What Should Merchants Do?
Brands have to understand their customers well in order to offer them the best options – in products, payments, and user support. Here are a few steps that merchants can take to:
Be more tech-savvy
Learn about and adopt newer tech and payment methods like digital wallets and real-time payment transfers. Credit options like BNPL are a great way to win over new customers and widen your reach. Contactless payments (such as tap to pay, digital wallets, A2A transfers) should be an essential part of your payments mix.
On mobile, on-the-go
Design your payments for mobile and quick on-the-go payments. In-app purchases are on the rise as shoppers prefer smartphones over PCs to shop online. In 2020, over 50% of online sales in Europe were through mobile. And in the next five years, mobile shoppers will double in Europe’s top 5 e-commerce markets. Contactless payments and e-wallets such as Apple Pay and PayPal should be a part of every merchant’s payment arsenal.
Easier ways to shop and pay
Convenience and flexibility should be at the heart of your payments. Whether it be supporting local payment methods or using new services like BNPL. Europe is a fragmented market with many payment methods. What works in one might not work in another. For example, iDEAL is the #1 payment method in The Netherlands, while cards are the top choice in the UK. You have to offer the right mix of payment methods to the right customers based on the markets you operate. This helps you widen your reach, acquire new customers, and retain existing ones. Being intuitive about what your customers like and how they prefer to pay can win you a loyal user base.
Keeping the trust
Secure your payments and your customers’ data. Brand trust is critical in today’s day and age, and brands can’t risk losing it to fraud. Hence, staying up to date with the latest fraud prevention measure will serve you well. Ensure you are running the latest versions of 3D Secure v2.3, use a PCI-compliant gateway, and work with a certified global payment service provider. Ensure you verify transactions using multi-factor authentication (SCA) to meet PSD2 norms in Europe. AI and machine learning tools can help you gain an edge in fighting fraud. These systems analyze your data in real-time, and their algos are constantly learning to detect newer forms of fraud. Building an AI-based risk strategy can help you detect and prevent fraud in real-time. Secure payments mean secure, happy, and loyal customers. And this does wonders for your brand.
Tap into the Data
Tap into payments data to gain insights into how your customers shop and pay. Doing so helps you offer personalized payments and reward programs. This helps you to engage with your customers in a better way and boost loyalty. Data-driven insights help you make better decisions for your business. They also help you to stay ahead of local market trends and bring more targeted marketing to your buyers. Payments intelligence is all about using data to improve your payments.
How can Novalnet help to influence customers?
We are a global PSP with deep experience in processing payments for the European industry. Many of Europe’s leading brands trust us to handle their payments. We can help you accept payments seamlessly in 125+ currencies in 150+ country-specific payment methods. Our instant plug-ins get you up and running within minutes and with minimal coding. With our AI-based risk management solutions and advanced analytics, you can securely process payments in a PCI DSS-compliant environment.
Give us a call today to know more about how we can help with your payments and enable you to become the best in your game.
Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.