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Retailers around the world believe that investing in embedded financial services will increase revenue.
Retailers are seeing positive results by integrating financial services directly into the shopping experience, offering payments, financing, insurance, and other financial products to customers.
Let’s take the UK as an example.Report from Natwest boxed and boston consulting group,”Bridging finance and retail: The power of Banking-as-a-ServiceA survey of domestic retailers found that respondents saw a 5% to 12% increase in conversion rates when offering financial services, a 15% to 30% increase in average order value, and a 15% to 30% increase in order value. It says it has increased by 4% to 7%. Revenue.
In the US, retailers are also finding that built-in financial capabilities are driving business results. For example, consider the buy now, pay later (BNPL) feature.
“It has never been more important that people continue to use cash, as more consumers want to use it.” BNPL From paying for everyday necessities to fun things like travel and entertainment. ” i2c president Jacqueline White he told PYMNTS in an interview in January.
PYMNTS Intelligence Report “Divided but not conquered: A cloud of confusion for acquirers and sellers The installment payment situation” survey of more than 2,500 U.S. consumers found that 37% use a BNPL plan, with that share jumping to 49% among Gen Z and 52% among Millennials .
This feature is key to gaining shopper loyalty, especially among younger generations. PYMNTS Intelligence Report “Credit Accessibility Series: The Broad Impact of BNPL on Consumers and Merchants” found that if BNPL is not available for a particular purchase, 27% of Gen Z will choose not to purchase that item.
In addition, many retailers offer store credit cards and financing options to customers, allowing them to pay later or with low-interest financing. These financing options are often integrated into the checkout process, giving customers additional flexibility and purchasing power. But for retailers, the success of such a business is card It’s far from a guarantee.
There can be hurdles for retailers, especially small businesses, looking to integrate embedded finance.
“[Small- to medium-sized businesses (SMBs)] Facing many management and implementation challenges Financial operations,” Luke LathamGeneral Manager Australia and New Zealand air wallexnoted in a conversation with PYMNTS in December.
He added that challenges range from payment processing and disbursements to the complexity of managing multiple payment methods and currencies. This includes the continued fight against lack of automation.
Still, the opportunity is important for those who can stick to their landings.
“In the SMB market, [embedded finance] It’s about satisfying customers and presenting this as an innovation. ” Tom LandkleffGlobal Head of Product cell point digital, added to the December report. “The entire ecosystem is inherently managed, which creates efficiency and a pleasant customer experience.”
If successfully executed, embedded finance will play a role in transforming the retail industry by integrating financial services into the shopping experience, increasing customer convenience, driving revenue growth, and fostering stronger customer relationships. can be fulfilled.
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