Shopping without cash — real news or fake news?

Electronic and non-cash payments are systematically replacing paper money. Capgemini estimated in their “World Payments Report 2017” that global non-cash transactions will record a Compound Annual Growth Rate of 10.9% from 2015–2020. Customers effortlessly use contactless cards, and carrying a credit card in your wallet is nothing unusual. Fresh ideas in ​​banking, promising high usability and convenience, are keys to building a competitive advantage on the ever-dwindling banking market.

by Piotr Chojnacki, UX Director of Efigence

Buy now, pay later — a breath of fresh air in payments

According to “The Enterprise Guide to Global Ecommerce” by Shopify Plus, global retail ecommerce sales will reach $4.5 trillion by 2021, up from $1.3 trillion in 2014. That’s over a threefold increase in online revenue!

Where there is a need, ideas are born and innovative solutions are created. Fintechs noticed the potential in ​​e-commerce payments, and new payment methods arose for financing and crediting online purchases. New types of payment in this area are already provided by startups that develop the concept of deferred payments without the use of credit cards — for example by Twisto, Klarna and Futurepay.

“Buy now, pay later” is one of the newest and most promising payment methods. By choosing this option, the customer can purchase goods and receive them without having to spend. Payment for the goods is made only after a specified time — for example two weeks. During this period, the customer can return the goods without any consequences, and also without making any kind of transfer of funds.

New payment methods, new perspectives

This approach opens up a completely new perspective on online shopping. The flexibility associated with buying, and at the same time minimizing the risk by postponing payments, can contribute to the even greater popularity of e-commerce. Certainty of receipt of goods, and the opportunity to test before payment, and in particular the possibility of returning the purchased goods without complications associated with recovering money, mean greater freedom and benefits for consumers. A worthy mention would be the PayU | Later “Buy now, pay later” program on the Polish market. Recently it was awarded in Ekomersy, the most important Polish ecommerce competition, in the “Payment innovation of the year” category.

The convenience of shortening the payment process through one-click payment solutions, based on unified authorization and user authentication, clearly contribute to positive experience building. Thanks to this, purchase decisions can be made more easily, bringing great value to both clients and merchants. For the latter, deferred payments are a chance to gain more customers and to sell more products. Solutions of this type are already implemented in shops such as Lenovo, Nike, and Wish, a store with Polish roots.

The future of deferred payments

So, while customer appreciation for the usefulness and innovation of new payment solutions is clear to see, old payment habits may block the rapid development of new trends. This calls for skilful adaptation of new solutions in payment methods to the needs and awareness of customers, as well as positive experience building.

We can expect payment methods providers (both banks and fintech startups) to fight it out for pole position in the checkout process, where the choice of a convenient payment method for the customer must be allied to the integration of this type of solution with the seller’s e-commerce platform.

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