Fintech has gradually seen a spike in adoption among businesses as customers progress through the digital age as more customers turn to fuss-free online solutions. These solutions enable you to connect customers with your brand closer than ever.
The extensive options of advanced fintech solutions offer your business an effective means of engaging online crowds flexibly and effortlessly. Sitting out or falling behind could lead to a long-term loss in market share and missed growth opportunities.
It is a critical time to discover how fintech and a digital transformation can keep your business in top shape throughout industry and tech trends.
Fintech Essentials
Fintech or financial technology refers to any advanced technological solution to enhance financial services or products, often through automated processes. Recent industry trends, such as the increase in online businesses, have led to rapid fintech development.
Digital customers continue to seek user-friendly online payment methods, usually optimized for mobile technology. According to a report by Datareportal, more than half (55.4%) of internet users shop online with their mobile devices. Therefore, an intuitive and mobile-friendly fintech solution can potentially increase online purchases and reduce the risks of cart abandonment.
Essentially, digital transformation has become a priority among modern companies. Therefore, selecting the most suitable fintech solutions can help you respond effectively to consumer trends while staying competitive in today’s tech-savvy market.
Understanding the Relationship Between Fintech and Digital Transformation
Fintech and digital transformation share a symbiotic relationship, where one drives the effectiveness of the other. As more e-commerce and brick-and-mortar businesses engage in digital transformation, they will need to streamline their financial practices (i.e., payment processes) through consistent and efficient fintech solutions.
Similarly, implementing advanced fintech platforms and applications will enable businesses to expedite their digital transformation through functions that optimize data management and boost user and customer experiences.
Fintech Payment Solutions in Digital Transformation
The global economy shifts toward a more connected infrastructure by connecting brands and customers despite physical distances. Fintech provides the intuitive tools to drive your business’s digital transformation, replacing manual and inefficient payment processes for smoother transactions.
Peer-to-Peer Platforms
Peer-to-peer (P2P) payment platforms remain highly popular as a secure and convenient means of transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... among end-users. As a result, merchants may implement P2P payment options that leverage customers’ familiarity with these platforms, making them viable transactions with minimal onboarding and complications.
There are several other advantages of implementing P2P payment in your e-commerce store. For example, customers can look forward to the ease of transactions from their mobile devices without relying on physical credit or debit cards.
Also, P2P transactions usually include two-factor authentication and transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... alerts, so customers have peace of mind knowing that they have complete transparency with each purchase. The accessibility of P2P solutions can help improve user experiences, resulting in improved customer loyalty and recurring checkouts.
Mobile-friendly Fintech
Recent customer trends indicate an uptick in mobile-friendly fintech solutions. According to market research by Statista, digital and mobile wallets accounted for an estimated 45% of global e-commerce transactions, with numbers expected to rise to 50% by 2050.
The social and business disruption caused by the pandemic led to an unprecedented increase in e-commerce and online shopping practices. In addition, stay-home notices, protocols, and health orders drove a newfound need for customers to purchase essentials directly from the comforts of their mobile devices.
Fintech companies developed online transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... solutions to accommodate the sharp rise in demand through secure, quick, and seamless mobile payments. Aside from mobile-friendly payment solutions, you may consider implementing mobile invoices that expedite the transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... process directly from a connected device.
BNPL
Buy-Now-Pay-Later offers customers the option of making a purchase and settling the fees at a later time. Typically, customers may complete a transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... by agreeing to an interest-free installment plan that they conveniently review from a mobile app.
According to a McKinsey report, 60% of consumers share that they will likely turn to POS financing (including short-term BNPL solutions) over the next six to 12 months. These payment arrangements allow consumers to break up their costs into manageable portions.
Harnessing the Power of the Blockchain
Modern customers are becoming more familiar with the blockchain, an immutable and distributed online ledger commonly associated with digital currencies. Blockchain technology lets your business complete transactions faster, safer, and more efficiently by leveraging multiple computer networks’ operational power and security.
Due to its decentralized setup, blockchain-based payment processes can significantly reduce transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... and processing fees. In addition, the blockchain serves as a verifiable and permanent record of every transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account...., eliminating payment errors and the hassle of data reconciliation.
Introducing the blockchain to e-commerce and retail payment processes could finally signal the end of double charging and fraudulent transactions.
Preparing for the Digital Future
Market experts expect the digital transformation to remain a central theme in the upcoming years, playing a pivotal role in the overall success of businesses. Research predicts that the digital transformation market might hit $3.3 trillion by 2025, growing at a compound annual growth rate (CAGR) of 23%.
By recognizing the link between fintech and digital transformation, you can gradually introduce frictionless payment solutions that help you engage more customers faster and more effectively.
For example, you can connect with mobile customers by accepting Samsung Pay or Apple Pay. These contactless payment methods offer unmatched convenience in selecting the preferred card from a mobile application and settling a transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... at a POSThe time and place a sale takes place. Also refers to the devices used to transmit the credit card transaction..
NMA – Keeping Your Business Updated with the Latest Payment Technology and Practices
The team at NMA can help your business navigate the latest fintech solutions to discover the most suitable fit that drives its digital transformation. For example, did you know that there are six different types of credit card transactions? Understanding each payment process and their respective solutions gives your business the advantage of fulfilling customer needs across various scenarios.
Speak with our payments experts to learn more about the latest fintech trends and how you can reduce costs while engaging your most valuable customers.
About National Merchants Association
National Merchants Association is a merchantA business that accepts credit cards for goods or services. advocacy group dedicated to reducing or eliminating the unnecessary fees associated with accepting credit card payments. Since 2004, NMA has been delivering tailored payment processing solutions and best-in-class customer service for all levels of risk. Whether it’s high-risk or low-risk, brick-and-mortar or e-commerce, NMA will create the best processing experience for your business. For more information, visit us at legacy.nationalmerchants.com or call (866) 509-7199.