Ecommerce Payments – Blueleaf Q&A

Hot off the back of Blueleaf’s latest IGR report that discusses creativity and payments in ecommerce, I caught up with editor, and EcomChat regular, Rob Smith for a quick Q&A to get his take on where ecommerce payments are going.

Please do add any further payment related questions via the comments and Rob will do his best to answer.

James – Which new ecommerce payment are gaining traction and why do you think that is?

Rob – There’s not one that springs to mind because there are many making waves in different areas. I see Stripe powering a lot of software payments (like Nutmeg) due to it’s simplicity and ease of integration for developers. I see Chinese payment methods like Alipay being crucial to those markets (as are marketplaces). These wallets enable bankcard free transactions for sure. But they still often get funded by a bank account behind the scenes. Finally Bitcoin continues to make noises and quietly gather bits of adoption. It still confuses most people though, if they’ve heard of it!

James – How do you see mobile payment evolving in 2016?

Rob – I think, I little like mobile ecommerce or the online/offline split, it will become increasingly hard to figure out what is mobile payment? It may sound silly, but if I pay with my Apple Watch, is that mobile? If I setup my account ages ago on Trainline, then use their app to buy my normal tickets, is that a mobile payment? The lines are increasingly blurred. To me, it’s about considering your whole payment infrastructure as those lines will become non existent in the next year or so.

James – Who will clean up the mobile payment space – banks, financial giants like Visa, early ecommerce specialists like PayPal, new disrupters like Square or social media giants like Facebook? Or is there space for everyone?

Rob – Due to payments market size there is a great opportunity but as always it will get dominated by a few players. The key here is that the underlying infrastructure is still largely driven by the banking systems – even new entrants have to use it at a base.

The only issue for banks and giants like Visa is the innovator’s dilemma (disrupting yourself is hard and damages you temporarily). That’s why companies like Square have made so much progress so quickly, but they’re still a drop in the ocean. The truth is that those who control the customer experience will gain a lot of control (like Apple Pay) and that can sway things heavily. Also as people aggregate their payments into these more frictionless services, the bank/provider becomes more invisible and so less relevant.

James – What are the barriers to consumers adopting new payment methods/models and how can retailers tackle them?

Rob – There are still some technological barriers – not all iPhones have NFC, not all people ‘get it’ enough to set it up quickly and so on. These barriers will come down though. One of the reason for older demographics fast rise in ecommerce is that tech barriers have come down. Computers are scary, iPads/Tablets aren’t. Not in the same way anyway.

There is also some security fear. People worried people can take money from contactless cards without permissions by walking past them is still prevalent in some areas. The more controls / guarantees that exist the better this will be. People are so much more comfortable with eBay as a model (which has a lot of perceived risk) due to their guarantees. Payment providers need to continue this theme.

James – If you could give retailers one bit of advice about ecommerce payment, what would it be?

Rob – Get back to brass tacks. Examine your current and near future markets. What payment possibilities fit them? International plays a big part in this as does the presence of physical shops. Then select a payment provider that can encompass a lot of these needs, and are progressive themselves. Adyen springs to mind to me often when considering this.

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Rob Smith is MD at ecommerce agency Blueleaf, which recently released its latest Inspiring Great Retail report focusing on creativity and payments in ecommerce. You can connect with him on LinkedIn or Twitter and the Blueleaf team regularly contributes to our weekly chats as @bltweets.

Thanks, James