New research into online payments from banking platform, Tink, reveals sky-high expectations for seamless, secure transactions as payment choice increases.
The survey of 2,000 UK consumers found that new payment innovations are being embraced — with 76% of consumers pleased with having more choices in how to pay. At the same time, tolerance for poor user experience is low, as nearly nine in ten (88%) claim they would abandon a purchase if faced with friction when paying. This suggests financial services providers may be missing the mark when it comes to delivering frictionless, yet secure payment options.
The surge in hassle free payments has been welcomed by consumers, as nearly three quarters (70%) said new payment methods have simplified the payments process, while 82% said it’s becoming easier than ever to make payments quickly and simply.
However, the arrival of new payment methods has set the bar high when it comes to consumer expectations. Over three quarters (77%) of consumers now expect payments to be instantaneous (i.e. money paid and received immediately) while over half (58%) expect online payments to be completed with one click.
Expectations are higher still amongst younger generations. Nearly two in three (63%) 18-34 year olds expect to pay with one click, and the same number also expect to be able to pay for everything on their mobile phones.
But high expectations mean low tolerance for a poor payment experience, with younger generations the least forgiving of any kind of friction. For example, over a third (37%) of 18-34 year olds think there are too many hoops to jump through and too many details to enter when it comes to making payments online.
With payment expectations higher than ever, consumers and businesses alike are continuously looking for new ways to better the customer journey. While debit cards and direct debits remain popular for e-commerce transactions, there is evidence of new open-banking powered payment methods being used in other scenarios, particularly amongst the younger generations.
For example, over one in ten (12%) of those aged between 18-34 are already using ‘pay by bank’ transfers to pay for utilities, indicating an appetite from young people to explore new payment methods on the market.
Tom Pope, Head of Payments and Platforms at Tink, commented: “Our research shows that while increased payment choice and innovation is apparent in many areas, holes remain in many user experiences that give rise to friction and frustration. Transactions too often end in abandonment if the experience is poor, which is bad for consumers and particularly bad for businesses, who can’t afford to lose customers at checkout.
“Consumers want to know that payments are secure and reliable – but increasingly they expect them to be embedded in a user journey to the extent that they almost become invisible. This is where open banking comes in.
“Open banking payment methods, often called ‘pay by bank’ transfers, can significantly reduce friction, improve reliability and enhance security, and can turn a previously negative payment experience into a competitive advantage for the merchant. As consumers embrace new payment methods and experiences become even more seamless, businesses who fail to adopt the latest payment technology may find they fall short of their customers’ expectations.”
