Digital payments tech adds fintech flair to industry
Digital payments technology is soaring through the consumer space globally thanks to ApplePay, GooglePay, AliPay, WeChat Pay, Paytm, and others. But there’s a revolution happening in industry too, as innovators such as Stripe and Square – to name just a couple of fintech’s shining stars – help businesses across a wide range of sectors to modernize and reshape their sales channels.
A knock-on effect of the progress made in digitizing consumer payments is that business-to-business customers increasingly want the same experience too. Moving to self-service, frictionless payments is a winning strategy for firms looking to lower the cost of sales and retain clients.
Logistics, supply chain, and transportation sectors are ripe for digital transformation. But what makes these industries so appealing from a transformative payments technology perspective – global operations, complex supplier networks, and high volumes of transactions – also represent sizable hurdles for managers tasked with driving change. Many firms are aware that they need to modernize, but for established companies – some of which have been trading for more than a century – traditional ways can be hard to abandon.
One example is container shipping giant Maersk, founded in 1905, which today operates across 130 countries. Up until recently, the company’s payments processes were fragmented, relying on a variety of systems. But digital solutions have enabled the firm to unify its financial operations and brought the company into the modern age. According to Stripe, Maersk’s global partner on the digital transformation, the container shipping giant is now able to offer customers the option of paying by credit card, which shines a light on the challenges facing long-established businesses.
But that’s not to say that the only beneficiaries of digital payments technology are older firms looking to update systems that have become out of date. Companies at the bleeding edge need payments services too.
Customers looking to fund their crypto-wallets need a way to convert fiat currency (money issued by decree such as the US dollar or the British pound) into Bitcoin, Ether, or other digital tokens. To solve the issue, companies are using payments API’s to build online checkouts that give customers a wide range of funding options, including ApplePay and GooglePay. Important too are the verification tools offered by partners. These include machine learning (ML) algorithms that have been trained to detect and block fraud based on large data sets representing millions of transactions. Blockchain.com and FTX are just a couple of examples of cryptocurrency firms using ML services to analyze payments and validate the onboarding of new customers.
Artists and galleries
Digital payments providers can often find themselves at the interface between the old and the new. And such examples can be found in the art world – a sector that is undergoing rapid digital transformation. Online payments are helping to reduce human errors that can crop up with manual inventory keeping and invoice issuing. Streamlined financial services also open the door to digital ledgers such as Startbahn’s Startrail infrastructure that allows galleries to encode the purchasing of artworks using blockchain to keep track of when images change hands. Innovative solutions can breathe new life into established markets, and help firms to distinguish themselves from the competition. During tough times, digitally enabled features can turn out to be critical for businesses.
In 2021, Stripe reportedly processed more than $1 billion in payments on behalf of agricultural businesses around the world. One of the big trends was the creation of digital platforms that allowed farms to trade directly with shoppers. The facilities provided a lifeline for agricultural business owners when sales to restaurants, wholesalers, and other regular customers were interrupted due to pandemic restrictions. As life returns to normal, these new sales channels have remained, contributing welcome revenue to farmers. Digital payments can unearth prospects elsewhere too.
Car makers are experts in pricing and leave no stone unturned when it comes to opportunities for cost efficiency. Recently, Toyota – one of the world’s largest automotive firms – used digital payments API’s to build a marketplace dubbed Mechacomi that enables repair shops to trade tools and equipment more easily. The platform will help to boost the utilization of highly specialized automotive tools that may only be used occasionally by owners. Features of the system include the ability for sellers to make deposits to secure purchases and facilitate a range of final payment options.
Digital payments providers are supporting automotive firms in other ways too, by helping dealerships to build online sales channels as the car market expands to accommodate buyers who want to shop for their vehicles on the web. Other sales trends include the rise of car subscriptions, which again can be supported by digital payments. And OEMs are busy working on commerce platforms, supported by firms such as Stripe, and others, that will be required to underpin the success of electric vehicles by making it as easy for drivers to pay for battery recharging as it is to buy gas today. Eliminating pain points for customers is an important part of digital payment solutions.
Cleverly named Billd offers contractors a financing lifeline allowing them to purchase materials and pay labour costs ahead of receiving payment for their contracted work. “We pay your supplier, you pay us. It’s that simple,” reads the tagline on Billd’s website. The company has a number of online tools aimed at the construction industry and is another example of how digital payments technology is making an impact on the industrial landscape.
2 December 2022