Today’s Tech Is Transforming How Customers Pay. Is Your Business Ready?

The last few years have seen unprecedented innovation in the payment technology space. As payment options like digital wallets and buy-now-pay-later (BNPL) take up a larger share of transactions worldwide, consumers are increasingly making purchasing decisions based on whether businesses will accept their preferred payment method.

Companies that don’t evolve and expand their payment offerings risk alienating customers and leaving cash on the table. According to Adyen’s 2023 Retail Report, 55% of consumers abandon purchases if their preferred method isn’t available.

The rapid adoption of digital payment methods is occurring across a range of demographics and age groups, and Rehman Baig, Global Head of Payment Partnerships at Adyen, says that the proliferation of digital tools is driving payment preferences.

Technology is not only changing how consumers shop online, but changing in-person purchasing behavior as well. Craving interactions that are convenient and frictionless, consumers are increasingly placing a premium on the freedom and choice that flexible payment methods provide, whether it’s the ability to purchase an item online and pick it up in-store, or the option to save on a purchase by paying via bank transfer. Consumers spend with businesses that best fit their preferences—including how they want to make a payment.

New payment technologies also help businesses capture payments at moments of peak customer engagement. The combination of digital wallets and tap-to-pay methods, for example, allows shoppers to skip the register and pay directly from the shop floor.

“The concept of payments being done strictly at the cash counter is antiquated,” says Baig. “The future generation of commerce is about being able to meet your customers where they are, with a flexible payment infrastructure to support that experience in any way, shape or form, whether at the kiosk, on your phone or with a stored credential.”

Forecasting fraud

For many businesses, however, operating across more payment platforms means widening their potential exposure to financial fraud. According to PwC’s 2022 Global Economic Crime and Fraud Survey, over a quarter of organizations incurred $1 million or more in losses last year as a result of platform fraud. But by leveraging secure forms of digital payments, businesses can protect themselves and their customers from cybercriminals.

“Fraudsters are working every day to game the system and find different ways to cause damage to our merchants,” says Davi Strazza, President, North America at Adyen. As a global payment platform, Adyen is at the forefront of providing fraud protection, primarily through RevenueProtect, their proprietary fraud prevention solution that employs a mix of machine learning and customizable risk rules.

Adyen manages an extensive threat model that rigorously tests its platform, looks at any and all ways fraudsters could access sensitive information and mitigates the potential for damage.

A must-have for global companies looking to scale fast

For any business that operates in more than one region, it is imperative that its payment offerings are not only varied, but in keeping with regional preferences.

“Businesses typically overlook the fact that payment methods aren’t just technical—they’re cultural,” says Strazza. “If a US merchant goes to Europe or Latin America, and the only thing they have on their checkout page is Visa or Mastercard, they will be missing a significant portion of that market.”

Strazza emphasizes that there is no one-size-fits-all approach to payment technology across the globe. While US consumers prefer paying by credit card, for example, those in Asia tend to use payment apps like WeChat and Alipay. In Germany, says Strazza, shoppers have a different relationship with credit and payments, and are more likely to pay by direct bank transfer.

Changes in the payment space can happen at lightning speeds, driven by convenience or local regulations. Strazza cites the example of a government mandate in Brazil that resulted in lightning-fast adoption of Pix, a leading account-to-account payment method.

Whether a business is looking to expand to new markets or is already established across regions, keeping pace with global trends in the payment space can be an enormous undertaking that requires significant investment, especially as the space is often fragmented. Typically, businesses need to work with multiple vendors to handle different steps in the payment journey, from processing to settlement.

Unified platforms like Adyen allow enterprises to leverage expertise in the payments space while easily integrating new payment methods. Having a single system to manage all payments—regardless of how they’re processed—also provides businesses with unified data, allowing them to gain deeper insights into their markets.

“If you’re a global company, you have to manage every single activity you have in every single market across every single channel, and that becomes really complex,” says Strazza. “What we do at Adyen is standardize that process, so that a merchant can reconcile their activity in, say, the US in exactly the same way they reconcile it in Brazil.”