How do you see the impact of the COVID-19 crisis on payments? What trends do you see evolving? What is the foundation for innovation in payments?
The COVID-19 crisis has significantly accelerated the growth of the digital economy. Businesses, large and small, have had to adapt their business models and shift their focus to digital delivery channels to survive and thrive. This has led to two things: increased consumer adoption of digital banking and payments, and increased demand for digital-first banking and payment providers.
With increased adoption comes increased expectations, and the digital-savvy customers of today assume their payment experience will be instant, seamless, and free. The incumbents, restricted by legacy infrastructure, are often unable to meet these demands, which has enabled API-first innovators to experience incredible growth over the past 18+ months.
Banking-as-a-Service and Open Banking providers are the leading innovators within the payments space and by giving businesses access to better technology and infrastructure, they are contributing to the rapid rise of the digital economy.
How do you see the trend of embedded payments expanding? What are embedded payments and why is this industry so important?
Embedded payments adoption is about to explode. We recently surveyed senior decision-makers in large technology businesses throughout the UK to find that 95% expect to be offering embedded payments in the next five years.
Through the integration of APIs, technology platforms can embed payments seamlessly into the customer experience. Real-world examples include services like Uber or Deliveroo, where the payment is almost invisible and does in no part inhibit the desired action of the user. This type of payment improves the customer experience by removing friction within the purchasing process and can lead to significant increases in conversion for technology businesses.
Looking ahead, payment initiation will be a key innovation within the embedded payments space. With users being able to connect their bank accounts to the different products and services they use, they can initiate payments without leaving the app or website that they are purchasing from. This is not only another example of improved customer experience, it can also significantly increase the speed of payments whilst simultaneously reducing their cost. As a method of payment, embedded payments is still in its infancy, but it has the potential to change how payments work for the better.
What are the benefits of embedded payments and what’s driving the uptake? Who benefits most from embedded payments?
Over the past 12 months, we’ve seen requests for integrating payment initiation accelerate, as more and more businesses look to create new revenue streams and strengthen customer loyalty. This is not surprising when you consider the sheer number of benefits it can bring; improved user experience, keeping customers within your ecosystem to increase engagement, opening new revenue streams, and many more.
Digital businesses face increasingly tough competition and their number one concern is how they can increase their engagement with customers. By offering products that have a more native experience throughout the entire payment journey, they can build a closer connection with their customers and differentiate themselves from their competitors.
How do you see the payments ecosystem changing in the future? What will be the future of embedded payments?
What we’re seeing in the payments space right now is extremely significant as it represents the promise of fintech being realised – but we’re still in the very early stages of what is possible. Genuine change doesn’t happen overnight and embedded payments as a service is still somewhat finding its feet, but it will lead us to change the way we view finance altogether.
With practically all financial and banking services being made available to non-financial businesses, how we save, spend, transfer, and manage our money will depend on the brands and services that matter most to us – those that gain our trust and loyalty. Customer-centricity will be king and businesses will innovate what we can do with financial services in ways we can’t currently imagine.
For both the consumer and businesses, the immediate future is a remarkably exciting time.
This article was originally published inside the Open Banking Report 2021. To download the report, please click here.
About Iana Dimitrova
Iana sets the strategic direction and vision for OpenPayd and leads the Executive Team. She has extensive experience within the fintech industry, which includes time spent as a corporate lawyer and holding numerous senior positions at Paysafe.
About OpenPayd
OpenPayd is a leading global payment and Banking-as-a-Service platform for the digital economy. Through its API-driven technology, businesses can embed financial services into their products and create the seamless user experiences needed to drive business growth.
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