In an increasingly competitive market, successful businesses know that providing consumers with a smooth and frictionless payment experience has become non-negotiable in an increasingly e-commerce-focussed world.
Customer demand for digital banking solutions is at an all-time high. According to McKinsey & Company, cash payments have declined by 16% globally and the pandemic has sped up the digitalisation of our economy by an incredible seven years.
This digitalisation, and with it, increasingly embedded e-commerce, plus a shift away from offices and physical bank branches and a progressively global ecosystem, is driving the trend towards agile, personalised banking products and services that can be accessed any time, anywhere.
In an increasingly competitive market, successful businesses know that providing consumers with a smooth and frictionless payment experience has become non-negotiable in an increasingly e-commerce-focussed world. BaaS enables this – and more.
More than 52% of online purchases were made using a digital wallet in 2021.
2022 is forecast to be the first year that digital payments overtake cash payments.
Banking is no longer the realm of just banks. And if Fintech is reshaping banking, BaaS is shaping fintech.
Incumbent banks and non-financial companies are in a race to find solutions that integrate financial products seamlessly into their pre-existing applications and services. In the past, such products were solely the reserve of banking and fintech institutions that have the regulatory permissions and banking licenses required to operate. With BaaS, any brand has this opportunity.
And it’s an opportunity consumers want. A recent study polled two thousand European consumers and found that 61.4% would be willing to use a financial service from at least one of the proposed online shops.
This highlights the relationship between a consumer and a brand that BaaS takes advantages of.
BaaS not only allows this type of customisation, but also allows new types of products to be created. Buy Now, Pay Later (BNPL) is a great example of this. Now the fastest-growing payment method in the UK, it is worth £9.6 billion annually to retailers, with experts claiming the service allows retailers to increase average sales by 27%.
It’s also changing the way brands monetise added value offerings. Instead of charging customers up front to make a transaction or execute an order brands can use BaaS to offer their products for free, instead directly monetising their transaction volume on the back-end through interchange split or balance interest.
© 2022 - All Rights Reserved
