Digitization has almost entirely eliminated the need for cash and cards for shopping. No wonder why more and more business owners are shifting to frictionless payments.
From grocery stores to banking and entertainment, every sector is enjoying the digital revolution and ease of transaction with frictionless payments. In this blog, discover the top 10 applications of these technologies. See if you can integrate them into your business to scale it up. But before we dive into industry-specific use cases, let’s briefly discuss the definition of Frictionless Payments.
What are Frictionless Payments?
Frictionless Payments, as the name suggests, eliminate friction (or obstacles) between the buyer and their purchase, minimizing the steps a person takes to make a payment during checkout. According to McKinsey’s 2022 Digital Payments Consumer Survey, almost nine in ten Americans use some form of digital payments.
Every step — from taking out a wallet to entering a PIN — is an effort for consumers. Now, businesses can offer their customers a way to pay through their preferred mode with fewer clicks. Frictionless payments improve the customer shopping experience and help companies's efficiency across various departments. Learn more about frictionless and alternative payments.
Benefits of Frictionless Checkouts for Businesses
Have you encountered never-ending queues in grocery stores? They make you want to abandon your shopping cart. Studies show that 73% of customers would abandon their carts if they had to wait in a queue for more than five minutes. But, with frictionless payments the wait time is reduced to less than two minutes, letting customers leave your store with a smile.
Efficient Staff Management
Digital payments help sales employees spend less time serving each customer. This helps them tend to more customers in less time at the store. So even when sales increase, business owners do not need to hire more employees for checkout and queue management.
Increased Data Security
Most modern-day frictionless payment methods leverage tokenization and encryption technologies. With increased fraud and cyber crimes, customers fear the risk of financial information. New methods operate on third-party gateways that do not share the customer’s payment information directly with the businesses. Instead, they encrypt the data to protect the customer's information and eliminate risks.
The most common frictionless payment methods include digital wallets like Apple Pay, auto-renew subscriptions, and in-app payment. Let’s check how top industries utilize frictionless payments to scale their businesses.
Top 10 Applications of Frictionless Payments
Utility Services Bills
Payments for essential utility services like gas, electricity, and water are collected monthly. Consumers have their own payment cycles and payment channels. With frictionless payments, companies offer consumers a single platform that allows streamlined revenue collection and management through a third-party solution with no external costs or fees on ACH and credit card transactions. By adding their card details once, consumers can automate the payments.
Healthcare / Medical Billing
Besides payments, healthcare facilities must ensure that their patient information is secured. Moreover, a minor delay in insurance disbursements and settlement can cost a patient’s life. For time-sensitive transactions like medical payments, frictionless payments eliminate paperwork and fund delays and accelerate the process to minutes. For example, iCG solutions integrate with Electronic Medical Records (EMR) and back-office systems to help staff update customer information and balance payments with real-time payment processing. Contactless technology allows medical centers to easily manage ACH, credit card, and RDC (Remote Deposit Capture) transactions.
Most consumers prefer credit cards and ACH direct transfers, but not the accompanying costly processing fees and fund delays. Companies that integrate a multi-channel solution to accept payments optimize the revenue management cycle. For example, ACH API integration allows insurance companies to facilitate premium payment requests and submissions, timely payments, automated invoice generation, and a dashboard to overview everything in one place without massive additional processing costs.
Tenants often choose to make payments through ACH direct transfer, credit card, e-check, or RDC - whichever is convenient to them. Companies don’t have to worry about expensive card processing fees and transactional costs. The Interactive Voice Response (IVR) technology further allows tenants to pay by touchtone phone, reducing the need for paperwork and representatives in real estate agencies.
Most leasing companies need help managing monthly installments and purchases between buyers and merchants. Frictionless payments provide them with an omnichannel solution to offer easy-to-manage installments to their potential customers. They accelerate the purchase of products between consumers and retailers for appliances, electronics, or even larger investments such as vehicles and boats.
Hosted payment portals enable secure ACH transfers, online card payments, and Remote Deposit Capture (RDC) in an all-in-one platform. As a result, customers enjoy fast transactions, while businesses enjoy simplified accounting. Studies show that 203 million people will use digital banking services in 2022. And this number will further increase to 216.8 million by 2025.
Municipalities Routine Payments
Government agencies collect monthly payments for numerous services, such as property taxes, vehicle registration, driver’s license renewal fees, traffic citations, and more. Citizens find it strenuous to pay and contact staff members for help. With one-click payments, agencies can automate the process, empowering consumers to pay through their digital wallets securely.
Nonprofits often leave money on the table with outdated payment processing systems. A highly advanced frictionless online donation station enables donors to send payments without extra effort. In fact, with automation, SMS, and email invoicing, nonprofits can increase their visibility and communicate more frequently with their donors. Additionally, the hosted gateway allows the organizations to track, measure, and analyze the response to their donation drive and funding event to see how far they are from meeting their goal.
The advanced systems allow companies to enroll ACH and credit transactions in one place to ensure on-time employee payments. Businesses can manage administration access on multiple levels to regulate control and secure information. As a result, it takes mere hours, instead of weeks, for them to process payrolls.
Commercial financing is another time-sensitive transaction that cannot afford delays for auto, mortgage, or personal loans. With cashless payments, customers and merchants acquire funds quickly and accurately. Financial companies can manage payments with a few clicks with seamless integrations and APIs with back-office systems and multi-level administration authorization.
Ready to Scale Up Your Business?
A study by The Futurist Group reveals that 38% of U.S. consumers view contactless payments as an essential criterion for a successful business.
Not all solutions may be right for you, but incorporating simple and innovative tech solutions can help you reduce cart abandon rates and increase conversion, improving the overall shopping experience of your customers. Here are a few technologies that you can integrate into your existing models to streamline payment processing:
iCheckGateway.com enables business owners to accept payments through ACH and credit cards on a single platform, without hassle. If you want to learn more about these technologies and how you can incorporate them into your business, reach out to us.
Build a future-proof payment processing system to maximize sales on the checkout flows.
MORE TAGS:Payment Processing, Payments Education, Entrepreneur Life, Merchants, Mobile Payment Techology, Faster Payments