Wiebke Tschorn

06. January 2021

Closing the last remaining digital gaps on the payment journey

  • In our blog series “RM Trends for 2021” we discuss the biggest trends in digital receivables management (RM). Each week one of our experts explores a different trend – today’s blog has been written by Wiebke Tschorn, our Product Owner. 

Germany’s distance retail sector has a long tradition of payment by invoice and among online shoppers it continues to be one of the most popular methods of payment. And why not? At checkout it often appears to be the most convenient option. 

However, when it comes to actually making your payment, the process almost seems archaic. What with logging into your bank account, typing in the supplier’s bank details and entering the amount, it’s not only laborious and time consuming, it also gives room for manual errors. Much the same can be said about returns processes and Installment options. 2021 is the time to improve these processes, to make them more convenient, easier to operate and more user friendly.

Making payments: an everyday activity, no matter where, when or how

Moving away from a payment procedure that is laborious and tiresome to an environment that is seamless, invisible and frictionless has long been the aim of online merchants, in particular. However, their focus has mostly been on enhancing the customer journey by offering direct payment options on their checkout pages.

Although alternative payment services such as PayPal have become increasingly popular, most Germans still prefer to pay by invoice. And yet, nobody seems to have thought about making this procedure easier: invoices continue to be printed on paper, often with a payment slip attached, while payment reminders still arrive by post. We can do more – and by more we mean: smarter, more digital, user-friendlier.

That’s also what consumers will be expecting in 2021. They want easy and convenient payment options. They want to lounge on the sofa and use their mobile phone to make a payment. Giving them these options will increase transaction success rates and enhance customer loyalty.

Increased sales through simple returns processes

Returns processes are typically anything but consumer-friendly. Before returning unwanted items customers often have to contact customer service, they are expected to print the return label themselves and work out how much to pay when they only want to return some of the items – it’s never easy! Incredible, if you consider that according to a survey conducted by German trade association Bitkom, one in nine online purchases is returned.

Convenient solutions, such as our Select&Pay feature, allow for quick and easy payments, even when items are being returned. On the payment page that has the look and feel of the retailer, all customers need do is select the items they want to keep. The invoice amount changes automatically and can be paid in just a few clicks.

Digital BNPL options allow greater flexibility

Payment deferrals and BNPL options are other areas that could benefit from leveraging digital technology. Despite the fact that in 2020 the checkout pages of the top 100 online retailers featured significantly more BNPL options at point of purchase (cf. EHI-Studie 2020), people whose budgets were tight because of long-term debt problems or were no longer able to pay their invoice on time still had no other option but to phone a call centre to set up a payment scheme.

Amazon, PayPal and Klarna are continuously evolving their BNPL options. Due to the coronavirus pandemic significantly more people are going to be experiencing financial difficulties. Digital BNPL schemes, including options allowing customers to delay the payment of outstanding invoices into instalments, help them when money is temporarily tight. Such offers would also relieve the strain on customer service departments.

More PayPalisation across the payment journey

The truth of the matter is that much remains to be done across the entire digital journey, particularly around the theme of payments. It’s also true to say that the best process is one that the customer doesn’t even notice. Because it quite simply does the job. The only way to close the last remaining digital gaps on the payment journey is to embrace technology and deliver a level of customer service excellence to match that of the Big Tech players, Amazon, PayPal & Co.

You can access an overview of the trends discussed in this series and all the other blogs here