First published on Finextra, authored by Jaime Lowe
For centuries, payments and how people make and receive them, barely changed. It wasn’t until the first set of computers were plugged into a budding technology known as the internet that talk of real evolution began.
Fast-forward to today, and the payments ecosystem is unrecognisable. £3 in every £10 is spent online, contactless payments account for more than a quarter of those made in the UK, and services such as ‘click and collect’ are widespread.
The Covid-19 pandemic accelerated this shift to digital at a frenzied pace. It has led to a place where many SMEs, which only two years ago were making scant use of technology, are now competing digitally with much larger organisations.
Power to the consumer
Up until only 20 years or so ago, a shopper wishing to make a purchase would have been offered just a few means of paying for and receiving their goods. Today, they are spoilt for choice.
Irrespective of their location, circumstances, or technological know-how, consumers can purchase the commodities they want, even receiving real-time updates on the status of packages being delivered.
It’s been good news for SMEs too. Not only do digital payments infrastructures and eCommerce platforms allow funds to be processed much more quickly, the rich datasets and reporting provided give leaders deeper insight into their businesses and facilitate better decision making.
The human touch is still important
Though the rush to digital swept up many SMEs in its momentum, it does not spell the end for those that have so far resisted. The £3 in every £10 spent online leaves £7 spent offline. Consumer appetite for purchasing in-store using traditional methods may be in gradual decline but it certainly isn’t going anywhere anytime soon.
As well as less tech-savvy shoppers favouring the in-store option, the more digitally capable and able, still enjoy the traditional retail experience.
SMEs yet to make the transition to eCommerce platforms need only be aware that the technology confers more variety and options both to themselves and their customers. And, with the onset of Open Banking enhancing the role of Payment Service Providers, SMEs will gain access to easier, more flexible ways of making the leap towards digital.
Even the most confident online shoppers need to feel that the payments they make are safe and that their financial information is protected from breaches.
Ensuring your website is secured with an SSL certificate is a vital first step. You can check this by looking for a padlock symbol in the address bar of your browser window or by checking your website’s address, which should start with https://.
Encrypting data, only asking customers for information necessary for making a sale, and directing them to log-in screens which ask for their email and a password (at the very least), are also essential steps towards a safer payments environment.
Whether you’re a digitally-gilded SME or are only at the start of your journey, the expedited transition to eCommerce shows us that it is the FinTechs who are among the great champions of this most vital of sectors.