the digital economy has established itself as the new commercial space, on a global scale

 

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MAXIM - While we were locked up at home, deprived of physical interactions, the digital economy has established itself as the new commercial space, on a global scale. It was therefore necessary to find solutions to meet these new challenges and electronic payment has become essential in almost all countries of the world.


Digitalization and pandemic: a favorable context

Much more than a simple technological tool, the Internet has profoundly changed consumer trends. It is no longer necessary to browse shopping malls in search of the latest trend or to queue at the checkout to satisfy your shopping desires. Today, technology is speeding up this process even further, making it possible to find and order products, all while paying with an often pre-registered card.

In 2021, e-commerce represents more than 13% of retail trade, and continues to grow, favored by repeated confinements. Companies around the world sell their products across the globe, and buyers jostle on sites and marketplaces hosted around the world.

 

Means of payment: the new challenge for merchants

Online interactions are increasing, and transactions are thus crossing physical borders. But if it is obvious in France to register your bank card on the Internet, it is a completely different reality in other countries, even bordering ones. In Germany, for example, consumers favor direct debit rather than bank cards, using solutions such as Sofort or Giropay. Similarly, buyers in Portugal mainly use Multibanco, a post-payment solution that allows them to pay for their purchases after ordering, directly from an ATM. The bank card is not a standard, and what the French will consider as the basic method of payment, will only be an alternative solution in another country, even within Europe. A company that develops online, and therefore wants to be accessible from any country, cannot therefore content itself with offering its customers the payment methods of its home market. The integration of different payment solutions is a strategic issue for merchants in a globalized world, because this diversity becomes a real asset for the competitiveness of a company.


 APIs and software integration

But integrating a payment option is not just about adding a button to the customer interface. This integration is carried out using APIs, which link the various parties involved in a transaction, namely the customer, his bank, the merchant and his bank. But this process can sometimes hurt the competitiveness of traders. Indeed, banks, being obliged to offer APIs, have generated them without always taking into account the customer experience. From their point of view, integrating payment solutions that are not or hardly present in a territory constitutes an opening to competition. They are therefore not particularly encouraged to do more than the bare minimum to develop these tools, which are essential to the fluidity of the user experience.

Faced not only with payment methods in other countries, but also with payment solutions in installments such as Alma or Klarna, the role of APIs is crucial in the payment process. In commerce, customer loyalty is the sinews of war, but a consumer who does not enjoy a satisfactory end-to-end experience is less likely to be loyal. APIs and the integration of payment solutions into them are therefore essential to the development of the digital economy.


The pandemic: vector of innovation

In this context of e-commerce growth, new players have been able to take advantage of the rigidity of the banking system in the face of the challenge of APIs. With the pandemic, the number of online sales increased sharply, by around 50% in value compared to the previous year. What has been a nightmare for many companies has turned into an opportunity for the e-commerce ecosystem. This boom has allowed companies to develop, as is the case for Stripe, a specialist in the integration of electronic payments which has taken advantage of this vacuum left by traditional players to become a leader in its field. This pandemic is a vector of innovation and strong development for the digital economy, which has accelerated the modernization of an entire ecosystem.

However, ways to connect all players in this economy have been overlooked. But not for long: today, banks and companies seem to better understand the challenge that APIs represent in these interactions. On the one hand, the priority is more on improving the customer experience, taking into account the differences between payment habits in each country, and improving connections between stakeholders. On the other hand, the monetization of APIs has become a hot topic, as this technological tool has become essential. It's a safe bet that banking players have not said their last word, and intend to exploit all the opportunities presented by the digital economy.

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