The U.S. retail industry produced some strong numbers in 2022, both online and in stores, bolstered by innovations in the payments industry. We are in the midst of a revolution in how people pay for what they want: transforming from cashless to contactless methods and expanding Instant Payments, Embedded Finance, and “Buy Now, Pay Later” (BNPL) options. The innovation isn’t stopping there. 2023 will see the launch of FedNow. And, we expect biometric payments and cross-border payments to gain traction through more resilient Central Bank Digital Currencies as consumers demand more frictionless options and retailers want faster settlements to maximize their liquidity.
Beyond just sales gains from inflation, more Americans shopped in 2022. According National Retail Federation (NRF), more than 122.7 million people visited brick-and-mortar stores over Thanksgiving weekend, up 17% from 2021, while 130.2 million shopped online, a 2% increase over 2021. In-person shopping isn’t going away anytime soon. It is imperative that payment providers enable retailers to provide omnichannel experiences for their customers, including accepting many forms of payment, providing safe and easy checkouts, and providing loyalty rewards and card-linked offers.
Visa reported in January 2022 that nearly 20% of all in-person credit or debit card transactions in the U.S. are contactless, a trend in part accelerated by the pandemic. Wells Fargo reports that 92% of small businesses with physical locations accept mobile and contactless payments, up from 67% in 2019. Shoppers want choice, especially those who are feeling financially stressed. Retailers are already seeing an increase in shoppers turning to Buy Now, Pay Later (BNPL) orders, which jumped 85% between Thanksgiving and Cyber Monday, compared with the week prior, according to Adobe.
As a digital partner to payments and fintech clients, we’re seeing rapid innovation and agility in the market across four key areas.
1. Behavioral Science-led Human-Centric CX: For a large investment banking client, we are reimagining the commercial payments experience across products, channels, and clients. Our Experience Design team mapped their existing Customer Journey to identify the most critical and challenging interactions throughout the user workflow, from client onboarding to payment processing and redesigned the experience to visually see where payments were happening – and where they were not – to improve workflow.
2.Creating Trusted, Engaging Financial Products: For one of the world’s largest Fintech providers, we built a Cloud-based marketplace, bringing together all the key payment components such as onboarding, gateways, card issuing, loyalty, digital wallets, virtual cards, and more by applying digital engineering principles through API’fication, Cloud Native, and DevOps. The self-service marketplace known as the developer studio enables other financial institutions and retailers to innovate faster and build payment products and services to serve their unique needs and clientele.
3.Realizing Emerging Financial Services Revenue Opportunities: In today’s diverse and decentralized global markets, there are vast opportunities for growth. We are helping a Lithuania-based bank to launch its products and services in the Latin American market through our Mexico delivery center. With a deep understanding of the local market and consumer preferences, our team leveraged their industry experience and technology capabilities to build more personalized solutions curated for a range of countries in the LATAM region.
4.Rapid Market Entry into New Business Segments: In what started as a super app for the LATAM market, we helped a regional player to build bank infrastructure in a SaaS-based model integrating with third-party providers for core banking, card issuing, payment processing, and fraud management. The architecture was built for growth, allowing the regional player to add new business segments, such as insurance, travel, grocery, and entertainment.
At Orion, we are building our partner ecosystem to drive the adoption of ISO20022 and the implementation of FedNow. Our partner ecosystem will include advisory services to help clients navigate the complexity of adopting new standards and build accelerators and frameworks for faster implementations.
If your organization’s New Years’ Resolutions are to re-think, re-imagine, and re-invent with a partner deep-rooted in strategy, experience design, and engineering, contact us. Our team can share more about how we can help evolve, scale, and optimize your businesses with digital products and services that enhance the customer experience, capture new market opportunities, and revenue streams.
Learn more about our Banking, Financial Services & Insurance offerings.
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