The New Normal of the Payments Ecosystem: Demand of Excellent Customer Experiences and Increasing Industry Regulation


Competition and innovation has been an enormous force for good in driving the speed of change in the payment ecosystem to meet ever increasing customer expectations for excellent payments experiences.

Now, with disruption of the payments landscape continuing apace, nimble, creative fintechs are challenging the ground held by established payment providers, and are constantly raising the innovation bar.

In the recent Accuity Payments Industry Survey, 94 percent of banks and payment service providers (PSPs) surveyed cited ‘protecting organisational reputation and existing customer relationships’ as integral to the payments process and rated it as their highest priority, equal with ‘reducing cost, time and effort’.

These results highlight the key motivations behind the industry’s evolution and the competitive pressure that is growing across the payments landscape. It’s clear that innovation has enabled the creation of a range of new payment options and customer channels that has given consumers far greater choice than ever before in how they wish to complete a payment transaction.

With this increased choice also comes higher expectations of service and customer experience.

This is the new normal for payments – accurate, easy, and instantaneous. Payment providers that fail to meet these expectations can expect to get left behind as the payments landscape continues to evolve.

The need for speed, accuracy and choice

Trust and security underpins everything in this market.

What does that mean in practice? It means providing customers with an intuitive user experience that matches their best payments experiences, excellent security, increased payments accuracy and available through the channels that customers demand, anytime they want it.

Today customers rightly expect frictionless payment processing, 24/7 accessibility to payment services and with the highest security standards applied as a minimum. However, just a few failed or delayed payments can blight the customer experience and irrevocably damage the relationship of trust. It is a given that payment providers must get it right, first time and every time.

Reaching all corners of the world

As domestic markets become increasingly competitive, more and more payment providers have attempted to extend their reach and break into emerging markets. However, these new markets bring specific challenges when it comes to payments; there is less data available on bank branches and identifier codes, and what data is available can be unreliable.

As the expectation of the move to real-time payments accelerates, success for payments providers depends heavily on data quality. Incomplete or inaccurate payment information can easily delay a transaction damaging the customer relationship and adding unwanted costs for the payments provider and the customer. Furthermore, inaccurate or incomplete branch and routing data has to be patched and cleaned, and failed transactions reviewed and corrected.

We have seen frequently that payment providers operating in new and emerging markets can increase their reach whilst optimising accuracy and security by integrating comprehensive, up-to-date payments data into their processes.

As an example of how this works in practice, in the case of Transfast, an international money transfer company, the business found that 8 percent of branches in India were not included in its database. By accessing a more accurate and complete data set, it can now offer far greater choice of payment routing options and has gained new customers as a result.

Fighting financial crime

While customers are demanding of their payments service provider to offer them an optimised payment experience, regulators have even higher expectations.

Regulators see Payment service providers and traditional payment institutions like banks as gatekeepers in keeping fraud and money laundering at bay.

The Accuity Payments Industry Survey showed that 47 percent of respondents found changing regulatory requirements ‘very challenging’ and 31 percent ‘somewhat challenging’, suggesting that compliance related to payment execution is a significant pain point for them.

The good news is there has been significant innovation in this field, underpinned by data quality.

For example, in response to global concerns over the level of money laundering occurring through real estate, SafeChain is helping title companies to authenticate and verify every aspect of the payment transaction to ensure consumers’ funds are protected. SafeChain has integrated Accuity payments data to ensure the authenticity and accuracy of routing information, adding an additional safeguard against payment fraud.

Instant validation

As we have outlined, a positive user experience between a payments service provider and their customer sets the tone for their relationship, and so a non-intuitive interface is unlikely to create a good first impression. We are increasingly seeing payments providers make use of core payments reference data at point of data entry to optimise the payments on-boarding process.

Any errors or omissions on data input are immediately identified and correct options supplied, or users prompted to re-check their information. In the past, customers could often reach the end of the process before realising they had made a mistake.

Web-based global payments data services are now available as a simple and cost-effective way to integrate existing applications with comprehensive, regularly updated payments data. Innovative payment providers are using core reference data to make setting up payment instructions simple and fast, without compromising on accuracy and data integrity.

These innovations bring clear benefits: processing success rates improve, the customer experience is optimised and the need for manual intervention to repair payment instructions is significantly reduced.

A reliable safety net

Accurate, reliable data is essential in minimising the risk that naturally comes with rapid evolution; it is also the foundation on which lasting innovation is built.

Like a safety net beneath a trapeze artist, up-to-date payments information gives payment service providers the confidence they need to brave new technologies and face market challenges enabling them to succeed.

Outcomes

The winners will be those payment providers who are the most creative, flexible and adaptable in meeting customer and regulator expectations with new innovative solutions. No one operating along the payments value chain can stand still. Those that will succeed are already differentiating themselves from the competition.

Meeting these market demands is the new normal.