Digitalization has irrevocably changed the behavior of businesses and individuals. It has transformed the way people manage their finances, it has reshaped consumer buying habits, but what is more important, digitalization has given a tremendous push to the interweaving of industries, generating a broad spectrum of new opportunities for further development.
Fintech, as one of the leading adopters of fast-evolving technologies, swiftly made its way into the dynamic market and spawned a variety of products and services that literally breathed life into numerous businesses, especially in the e-commerce space.
In fact, running an online business has never been possible without digital payment solutions provided by fintech partners. But since e-commerce is evolving non-stop, and the fintech revolution continues to shape it, the solutions that fintech can provide for e-commerce can go far beyond regular payment options. So, here is the list of the best things fintech can offer to improve online business performance in 2022.
Verification and KYC programs
Since online payment fraud is on the rise and cyberattacks are becoming frequent and sophisticated, more and more e-commerce brands and marketplaces are focusing on better KYC (know your customer) compliance programs.
With a lack of significant security measures, e-commerce has become one of the most tempting targets for unscrupulous individuals. Therefore, it is not surprising that the industry is looking for new ways to increase cyber resilience and protect its clients without sacrificing customer experience.
KYC verification, in turn, can help at a very early stage collect and check comprehensive user information — from bank card numbers and address to Face ID and fingerprints. In this regard, fintechs have much room to act. They can facilitate KYC programs within their products and services, ease the hurdle on e-commerce, and provide more complex protection, while making it more of an industry standard.
The best thing about blockchain technology in the e-commerce space is that it is profitable to both merchants and consumers and can become a multipurpose tool for various commercial needs – from transactions and money transfers to shipment and security.
Due to fintech advancements, blockchain can assist in tracking a supply chain, managing inventories, reducing costs, and much more. But what is more important is that blockchain technology can become a fantastic solution to the previously mentioned cyberattacks and financial security concerns, as the technology offers multi-layered protection in the form of distributed ledgers.
Another advantage of the blockchain implementation is that all data is time-stamped, permanent, and open to the public, which ensures accuracy and transparency.
Finally, the blockchain ecosystem can open gates for online retailers to use the new markets in developing countries, as consumers there don’t require an intermediary to process their payment requests.
Better Payment Experience
It’s no surprise that due to fintech developments, many companies can already offer 0% interest on online loans directly at checkout to allow consumers to get large purchases without the limits. As a result, consumers can now spend money on things they would not acquire if they had no such option.
In this regard, another significant aspect of the beneficial partnership with fintechs is linked to continuous innovation that enables vendors to transform the way they run their businesses. Payment strategies and a wider range of payment options directly impact customer preferences and their behavior, which constantly pushes merchants to improve their buyers’ customer experience and develop and test new offerings to remain best in class.
The only drawback of continuous advancements in technologies is that businesses can no longer take a pause, as they must untiringly do their best to make buying and selling convenient and reliable, maximize their sales, and outperform their competitors.
What is the most vital thing about every business, including e-business? Of course, it is revenue. And the lower the expenses are, the higher the profit is.
It goes without saying that every online business needs a banking account to process transactions and collect payments. However, when it comes to all traditional banks that allow merchants to operate money digitally, the process happens to be accompanied by lots of fees. Indeed, this is an obvious thing, as traditional banks have an extensive infrastructure with countless bank branches that need to cover their own costs.
As a result, classic business bank accounts typically come with multiple maintenance fees, minimum balance requirements, and transaction limits that, if not met, result in more expenses.
This way, fintechs can become a fantastic alternative for online-only businesses, as they don’t impose substantial extra costs as banks. Moreover, with the same (or often broader) set of offers — online banking, money collections, digital payments, etc. — merchants can enjoy extra income with minimal to no fees.
Rich real-time data analytics and valuable reports
Since the online market becomes denser and denser with more competitors getting on board, it’s vital to get up-to-date information to always be one step ahead. On this basis, one of the most significant perspectives of fintech in e-commerce lies in its ability to gather valuable insights from customers through various apps and offers.
In fact, outdated reports and inflexible information systems may induce a significant loss of profit. At the same time, real-time data and its analytics allow e-commerce companies to make faster and better decisions and stay competitive in the online marketplace.
Additionally, being at the head of the tech revolution, fintechs successfully leverage smart analytics tools like AI or machine learning that help identify consumers’ habits and launch targeted ads based on their previous buying activity. This, in turn, has an enormous potential to boost sales, as consumers will be offered something that they have already viewed and demonstrated interest in.
Finally, thanks to fintechs, merchants can make balanced decisions about pricing and inventory, taking into account countless economic indicators such as inflation, cost volatility, competitive factors, and more.
As we can see, fintechs, as the main ‘product’ of digitalization, have shaken up the world of online businesses and the way they treat their customers. Furthermore, the impact of fintech on e-commerce has happened to be so enormous that now merchants need to rely on technology more than ever to stay competitive. Fintechs transformed payment processing, customer experience, business strategies, and there is no doubt they will continue to change everything around them in the years to come.
Overall, it’s clear that fintech and e-commerce are a perfect match that will continue to revolutionize the online market, generating countless opportunities to grow and thrive.
And as the industry continues to evolve and innovate, we will surely be able to enjoy a much better service and a broader set of fantastic options.