Voice of the Industry

Phygital is the new black

Tuesday 5 September 2023 08:39 CET | Editor: Alin Popa | Voice of the industry

Imran Vilcassim, BPC: Exploring 'phygital' fusion of physical-digital interactions for enhanced value. Examples, benefits, technology enablers.


The concept of ‘phygital’ has emerged as a transformative force within the business landscape. It revolves around seamlessly integrating physical and digital experiences for merchants and consumers alike. These interactions hold the potential to add value by enhancing digital interactions through personal engagement and tangible enhancements.

The rise of phygital

The phygital experience arises from online-to-offline strategies. Several instances of phygital implementation include:
  • Click-and-Collect solutions in physical stores
  • Self-checkout systems in retail environments
  • Minimising branch interactions through digital banking services
  • Utilising NFC devices for urban services
  • Enhancing security with biometric scans
  • Enabling Augmented Reality (AR) experiences via wearables or mobile devices
  • Offering e-Government services
  • Deploying Digital Kiosks for expedited card issuance

Following the completion of the online journey, customers smoothly transition to offline experiences, for example receiving an issued physical bank card.

The current business landscape

Amidst the disruptions caused by the Covid-19 pandemic, which limited physical interactions and disrupted supply chains, phygital emerged as a natural response. The adaptation is already underway. According to GlobalData research, in the years 2022-2023, over 43% of consumers seek user-friendly digital banking platforms, while 24% still prioritise convenient access to physical banking branches.

Despite the march towards digitalisation, physical interaction remains pivotal in consumer life, especially for SMEs and the retail sector. Projections indicate that by 2026, 24% of global retail sales will occur exclusively online, while the remaining 76% will still seek in-store experiences. Global Data's surveys affirm this trend, revealing that more than 30% of consumers prefer inspecting products in-store before making a purchase.

The phygital market is poised to exceed USD 200 trillion within the next five years. Crafting an effective phygital strategy is crucial for neobanks, traditional banks, retailers, and SMEs to capture and retain customers and talent in this evolving retail landscape.

Source: Market size Value, Leta Capital, State of Phygital 2022.

The advantages of phygital

The implementation of mobile apps empowers customers to place orders irrespective of their location or time constraints, eliminating the need for queuing. This expedites order fulfilment and offers digital management for SMEs, reducing idle waiting times. Banks and fintechs can capitalise on loyalty programs, enabling customers to accumulate rewards through digital transactions. The benefits and applications of phygital are many, including:

Embracing the momentum

By seamlessly merging the strengths of physical and digital realms, companies are not only meeting customer expectations but also staying ahead in an ever-evolving marketplace. Let's explore how businesses are hopping on the phygital hype train to redefine customer experiences and drive growth.

Personalisation throughout the order process

Providing a seamless personalised digital payment process and centralising orders and payment options on a single platform is essential. Selecting the right technological platform empowers customers to choose their purchasing channels and preferred payment methods. McKinsey reports that 71% of consumers expect personalised services, with over 75% becoming frustrated when unmet.

Geo-targeting for upselling

Phygital developments bridge the gap between digital and physical realms, enabling proactive customer engagement and creative service offerings. Targeted interactions predictively engage customers, addressing needs and presenting upselling opportunities.

Buy Online, Pick Up In-Store (BOPIS)

This approach is particularly advantageous in countering shipping delays resulting from supply chain issues. For instance, Walmart's Scan & Go system empowers consumers to scan items and pay using their phones while shopping, or the Starbucks app that enables customers to order and pay through their phones, reducing waiting times.

Digitising supply management

Digitising transaction recording and supply chain data enhances transparency, security, and speed. It facilitates error-free goods tracking, reducing fraud risks. Suppliers gain the ability to trace product origins and monitor the journey to the consumer.

Streamlined check-ins and seamless authorisation

While scanning QR codes via mobile phones is convenient, filling out online forms for account sign-ups or purchases remains a pain point. Over 37% of users abandon forms requiring additional data like mobile numbers. Enhancing onboarding experiences is crucial, achievable through strategic partnerships and integrations.

Leveraging physical kiosks

Extension of services to physical locations through kiosks. These kiosks rapidly issue cards and offer diverse functionalities such as utility payments, consultations, and loans. For banks, this attracts tech-savvy consumers, broadens networks, and reduces operational costs.

Automating with intelligent customer support

Deploying chatbots or IVR systems for common queries frees physical resources for complex issues, enhancing efficiency and customer satisfaction.


Phygital harmonises digital and physical realms, forging a novel consumer experience. Virtual experiences hold potential, but they must seamlessly integrate with the physical —whether in banking, retail, transportation, or other sectors. The essence lies in providing personalised experiences that cater to individual needs.

Drawing on vast market knowledge, BPC embodies the principle of bridging real life with digital which perfectly reflects the phygital concept. Within the BPC SmartVista Marketplace ecosystem, you'll find a wide array of examples illustrating the digitisation of processes, transactions, and tasks. These instances work together to elevate different aspects of businesses, creating a more enriched experience for your customers.

About Imran Vilcassim

Imran Vilcassim, a seasoned expert, presently holds the position of Global Solutions Consultant for Digital Platforms. His extensive background in both technology and business has played a pivotal role in advancing BPC's initiatives in Digital Banking, Marketplaces, and E-government concepts within the digital domain and customers minds. Imran adeptly applies his expertise to navigate the ever-evolving convergence of technology and business dynamics.


About BPC

Founded in 1996, BPC is a proven industry leader that is shaping the world of transactions with quick, safe and easy payment processing. With a focus on exceptional technology development and customer service, BPC helps financial institutions and businesses to deliver innovative and best-in-class proven solutions that fit with today’s consumer lifestyle when banking, shopping, or moving in both urban and rural areas. With more than 350 customers across 100 countries, BPC collaborates with all ecosystem players to deliver services for the digital world. Its core product SmartVista suite comprises cutting-edge banking, commerce, and mobility platforms that enable innovative solutions for digital banking, ATM and switching, payments processing, card, and fraud management, financial inclusion, merchant portals, transport, and smart cities. To find out more about how BPC can help businesses deliver a seamless payments processing experience to consumers, please visit www.bpcbt.com.

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Keywords: digitalisation, one-click payments, digital banking, NFC, Augmented Reality, retail banking
Categories: Banking & Fintech
Companies: BPC
Countries: World
This article is part of category

Banking & Fintech


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