We have witnessed the shift from cashless transactions to contactless cards and now invisible payments.

Digital payments have indeed come a long way and the next frontier is autonomous payments - transactions that occur without manual intervention, powered by artificial intelligence (AI) and the Internet of Things (IoT).

This pair-up is redefining commerce by making transactions intelligent and entirely frictionless.

Autonomous payments are a mix of AI analyzing user behavior, predicting purchasing patterns, and enabling smart decision-making, with IoT connecting it with everyday devices. The end results? Smart initiation and completion of unsupervised transactions.

A smart car that pays for fuel automatically and a subscription service adjusting payments based on usage are some examples of autonomous payments in FinTech.

This form of digital payment is setting new heights in terms of efficiency, reduced friction, and customer experiences for businesses, while customers benefit from its convenience, security, and effortlessness.

‍

Understanding autonomous payments

Even the latest advancement in payments i.e. invisible payments need an action from users. Autonomous payments do not.

Autonomous payments are transactions that are initiated, processed, and completed without any manual intervention whatsoever. They do not function like the current typical payment methods that require user input like tapping a card or approving a mobile transaction.

Autonomous payments operate seamlessly in the background, without user input, solely relying on AI and IoT to function.

AI in payment systems plays a crucial role by analyzing user behavior, predicting purchasing patterns, and making real-time payment decisions, while IoT connects smart devices, enabling them to communicate and transact independently.

For example, a connected car can automatically pay for tolls and fuel, or a smart refrigerator can reorder groceries when supplies run low without human involvement.

The lack of manual intervention eliminates friction, making these technologies seamless, intelligent, error-free, and efficient. AI and IoT will soon become sophisticated, making autonomous payments an integral part of our daily lives, and changing how we interact with money.

‍

Examples of autonomous payment scenarios

Here are some real-world scenarios where AI and IoT enable seamless, hands-free payments:

1. Smart appliances & subscription-based ordering

The most relatable example of smart appliances with payments is refrigerators. Imagine refrigerators keeping track of groceries, say milk, and when the storage quantity goes down, they place an order automatically (without your instruction) and intelligently (from your preferred store).

AI-powered appliances like smart refrigerators track inventory levels and use predictive analytics to reorder essential items before they run out.

Similarly, IoT payment use cases include IoT-enabled coffee machines that can detect when coffee beans are low and initiate a refill order, ensuring a seamless supply without user intervention.

2. Connected vehicles & seamless transactions

Vehicles are becoming payment hubs on wheels. Smart toll and parking systems allow cars to pass through toll booths or park in designated areas without requiring a physical transaction because sensors handle payments automatically.

Beyond that, in-car commerce is gaining traction, where vehicles can pay for fuel, order food at drive-thrus, or handle EV charging without drivers needing to pull out a card or phone.

3. Predictive billing & personalized payments

AI-driven predictive billing facilitates payments according to real usage patterns. Streaming services can adjust billing cycles based on viewing habits and offer a personalized subscription plan.

Similarly, smart utility meters use real-time consumption data to calculate and charge energy bills dynamically, helping consumers optimize usage and costs without manual tracking.

‍

AI’s role in securing and enhancing autonomous payments

Here’s how AI is making digital payments more prevalent, secure, seamless, and personalized:

1. Fraud detection with AI-driven anomaly detection

AI continuously monitors transaction patterns to detect real-time anomalies and suspicious activities. Delving into user behavior, location data, and spending habits, AI can trace patterns of unusual transactions and flag them for evaluation to prevent fraud.

2. Biometric authentication for secure, frictionless payments

Heightened security creates friction. AI uses biometric authentication methods like facial recognition, fingerprint scanning, and voice verification to balance out security with convenience.

This seamless verification ensures that only authorized users can complete transactions, and without friction, i.e. eliminating the need to input passwords or PINs.

3. Predicting user behavior to enhance customer experience

AI-driven insights help businesses make predictions and optimize their processes and products according to the expected demand or needs.

For instance, AI can adjust subscription billing cycles based on past usage or suggest preferred payment methods based on transaction history, making the experience smoother and more intuitive for users.

4. AI-powered personalization in payment plans

AI is capable of analyzing individual financial habits to come up with customized payment plans. This means AI can adjust buy-now-pay-later options, optimize loan repayment tenures, or tailor subscription fees.

The end goal for AI is to ensure payments are aligned with a user’s spending capacity and preferences, thereby reducing their financial burden.

‍

Challenges & considerations of autonomous payments

Here are some hurdles to the widespread adoption of autonomous payments:

1. Regulatory and compliance issues

The financial industry is heavily regulated because of its very nature, and autonomous payments fall into the same category. They need compliance with data privacy laws like GDPR and CCPA which is a fair challenge.

The regulations demand transparency in data collection, user consent, and protection against unauthorized data sharing and since autonomous payments are AI-driven, compliance remains a challenge.

Additionally, financial regulations governing AI-driven payment decisions raise concerns about accountability. It demands accountability for cases when an AI system makes an incorrect or unauthorized transaction.

We are yet to find a middle ground where compliance and AI can co-exist.

2. Consumer trust & security concerns

Autonomy is a benefit and a demerit together. Users need to trust autonomous payments and feel secure availing them, to increase adoption. But, fears of unauthorized transactions and the possibility of AI making payments without explicit user approval are creating hesitation.

To build trust, we need transparency and widespread awareness. User must be made aware of how AI-driven payments are triggered, who has access to their financial data, and how potential errors or fraud are handled, to ramp up adoption.

3. Technical & infrastructure challenges

Lastly, the success of autonomous payments depends on widespread IoT adoption and advanced connectivity. 5G networks facilitate real-time communication between devices, and even minor inconveniences like gaps in network coverage could hinder seamless transactions.

Additionally, interoperability between different payment ecosystems like banks, digital wallets, and IoT platforms is essential for frictionless transactions. Without standardized protocols, users may face fragmented payment experiences across different services.

‍

Business opportunities in autonomous payments

Here’s how the rise in autonomous payments is unlocking new opportunities for businesses across industries:

1. Retailers leveraging IoT for seamless checkout experiences

Retailers are integrating IoT to create frictionless digital and in-store experiences. For physical retail, smart stores like Amazon Go are creating cashierless shopping experiences.

The stores have AI-powered sensors and IoT devices that track purchases made by customers and charge them automatically when they leave. The absence of traditional checkout lines makes the process convenient, encouraging repeat purchases.

2. Banks and fintech firms developing ai-powered payment solutions

Banks and fintech companies are leveraging AI to create smarter, more secure autonomous transactions. They are investing in predictive analytics and ML to enhance security and streamline digital transactions, like AI-driven fraud detection and biometric authentication.

Additionally, FinTech startups are making efforts to come up with autonomous banking solutions that will help customers automate bill payments, savings contributions, and even investment decisions based on AI insights.

3. Subscription-based businesses utilizing predictive AI for dynamic pricing models

The subscription economy is no longer sustainable on monthly or yearly billing and AI-powered bespoke pricing can help.

Streaming platforms, SaaS providers, and subscription-box services can use AI to analyze user behavior and optimize pricing models based on consumption patterns.

These personalized payment plans that are exclusive to a customer’s actual usage instead of a monthly fee, reduce churn and increase customer satisfaction.

‍

Conclusion

Autonomous payments, powered by AI and IoT, can change the face of payments and transactions. This shift will take us from manual input-driven transactions to a seamless, intelligent, and frictionless experience.

AI enhances security, analyzes user behavior, offers predictive analysis, and makes smart decisions, while IoT connects smart devices to enable hands-free payments.

We are already witnessing its power through cashier-less retail stores, connected vehicles, predictive billing systems, and dynamic pricing models, and businesses across industries are reaping the benefits.

Looking ahead, companies must adapt to this shift by investing in AI-driven payment solutions, ensuring compliance with evolving regulations, and building consumer trust in autonomous transactions.

The key to success lies in leveraging smart payment ecosystems that provide both efficiency and security, meeting the growing demand for seamless digital experiences.

It is time for businesses to embrace AI-powered payment innovations and stay ahead of the curve. Turn the expectations into reality with Payby and its cutting-edge solutions that can help companies integrate with the latest technology solutions.

Get started with Payby today.

The creator economy is booming and redefining wealth, work, and passion.

It is now a multi-billion-dollar industry comprising independent content creators, influencers, and digital entrepreneurs. More and more people are turning their passion into full-time careers, traversing from corporate employees to content creators.

Flexibility, freedom, creativity, and money are just some of the reasons for the shift.

People love the idea of being able to turn their passions into profitable careers and digital platforms give them all the means to monetize it through subscriptions, tips, sponsorships, and exclusive offerings.

Seamless, secure, and diverse payment solutions allow creators to easily receive earnings from local and global audiences, helping them build their audience, retain them, and scale their businesses.

This article talks about the top digital payment trends that are driving the creator economy forward.

‍

Micropayments enabling small-scale transactions

Here’s how micropayments are about finding the right balance between opportunities for content creators to thrive and helping their audience with mindful spending:

What are micropayments and how do they work?

Micropayments are a diversion from the subscription-based model where consumers only pay for the content they consume, often in tiny fractions that range from a few files to around 50 AED.

Micropayments operate on a pay-per-use basis, meaning consumers can purchase specific articles, videos, or other digital assets without committing to long-term subscriptions. This model is super attractive for consumers seeking access to paid content and creators looking to monetize a broader audience.

Consumers can use multiple seamless payment methods like digital wallets, cryptocurrency, or in-app payment systems to pay for the content pieces without incurring a hefty charge or processing fees.

Impact on content monetization

Micropayments for content are a boon to creators because they open up a new avenue to monetization. Creators can earn from every single article, video, social media post, and other forms of digital assets.

So, instead of relying on a small base of committed subscribers, creators can earn from casual viewers who are willing to pay small amounts for specific content.

Secondly, they can expand their revenue streams beyond ad revenue, and generate income directly from engaged audiences who value their content.

Micropayments help all types of content creators to thrive, even then one who struggles to secure large-scale sponsorships or brand deals. Niche publishers and independent creators who have a hard time finding ways to monetize their content benefit the most.

Benefits for creators and consumers

Micropayments for creators mean they can also earn from casual viewers who are willing to pay small amounts for specific content. This expands the creator’s potential revenue stream by making content accessible to a wider audience.

For consumers, it offers more control over their spending, allowing them to pay only for what they find valuable rather than being locked into recurring fees.

It also lowers the financial barrier for audiences who may be unwilling to commit to a full subscription but are happy to support creators in small, frequent amounts.

Micropayments are playing a major role in helping the creator economy sustain while also fostering a direct and transparent exchange of value between creators and their audiences. And, it will continue to evolve as a powerful digital payment solution for creators.

‍

Subscription-based models for recurring revenue

Let’s dive into how subscription-based models help content creators generate recurring revenue and build a community of followers:

The rise of subscription platforms

The subscription model has become a strong business strategy for the creator economy as it ensures a consistent and recurring revenue stream for the creators. Fans get the opportunity to support and easily follow their favorite creator’s content.

Platforms like Patreon, OnlyFans, and Substack are the torchbearers revolutionizing content monetization via the subscription model where audiences pay a monthly fee for exclusive access to premium content, behind-the-scenes updates, and direct interactions with creators.

This model gives the audience the freedom to view content that appeals to them and the creators' sustainable profitability and enhanced audience engagement.

Advantages for creators

The prime advantage for creators is finding financial stability because the model facilitates a steady and predictable income stream. It is the opposite of one-time payments or ad-based revenue that has a lot of nuances attached and is often unpredictable.

With clear and fixed income sources, creators can plan and invest in their content plans, scale their business, and grow their careers to become financially stable.

Beyond just building a sustainable business, creators can use the insights from the close-knit subscriber audience to create personalized niche content and turn it into a profitable business.

Additionally, subscriptions foster a sense of community, as paying supporters are often more engaged and loyal, forming a dedicated fan base that sustains long-term growth.

Consumer perspective

From a consumer standpoint, subscriptions offer value beyond just content, they provide a closer connection with creators.

Subscribers often gain access to exclusive perks such as personalized interactions, early releases, and members-only discussions, making them feel like a part of an inner circle, and stay close to their favorite creators.

Many consumers also view subscriptions as a way to directly support the creators they admire, ensuring that their favorite artists, writers, and influencers continue to put out content without solely relying on traditional advertising or sponsorships.

‍

Blockchain and NFTs facilitating ownership and payment mechanisms

Here’s how blockchain technology and NFTs (Non-Fungible Tokens) are transforming content monetization for the creator economy:

Introduction to blockchain and NFTs

Blockchain is a decentralized digital ledger capable of recording and storing unalterable transactions ensuring security and transparency. NFTs, or Non-Fungible Tokens on the other hand are smart contracts or assets stored in the blockchain.

These assets can be digital art, music, videos, or collectibles. NFTs verify authenticity and prove ownership, unlike traditional digital files that can be easily copied, making them valuable for the creators.

Transforming digital ownership

NFTs have revolutionized the concept of digital ownership by allowing creators to tokenize their work. Each NFT is linked to a blockchain record, ensuring that the creator retains control and that buyers receive a verifiable, one-of-a-kind asset.

This innovation has created new opportunities for artists, musicians, and content creators to sell their work as exclusive digital collectibles, reducing the risk of piracy and unauthorized use.

Monetization opportunities

With NFTs for creator payments, creators can sell digital content directly to their audience, bypassing traditional gatekeepers.

Artists can mint and auction their work, musicians can release exclusive tracks, and writers can tokenize their content, all while setting terms for royalties. Yes, creators can earn royalties from secondary sales.

Whenever an NFT is resold, the original creator can receive a percentage of the transaction which ensures a continuous revenue stream.

Challenges and considerations

Just like any other digital solution, NFT has its own setbacks. NFTs are prone to market volatility, which means their prices can fluctuate drastically, making it a risky investment for both creators and buyers.

Understanding the nuances of blockchain technology requires a learning curve, and not all creators can navigate through the complexities of minting, selling, and transferring NFTs. Environmental concerns borne out of power consumption also remain a significant issue.

‍

Instant Payouts Improving Cash Flow for Creators

Just like anyone else, creators demand and deserve financial stability, and here’s how instant payout solutions are turning tables:

Traditional payment delays

The majority of digital platforms follow traditional payment schedules that can take days or even weeks to process payments, leaving creators in financial limbo.

Ad revenue, brand deals, and platform-based earnings (such as YouTube, TikTok, or Patreon) often have waiting periods, with some platforms imposing thresholds before payouts can be released.

These delays can make it difficult for creators to manage expenses, invest in better equipment, or scale their content production efficiently.

Emergence of instant payment solutions

To help creators with the challenges of traditional payment infrastructure, several platforms have introduced instant payout options.

Services like Stripe’s Instant Payouts, PayPal’s instant transfer feature, and creator-focused solutions like Ko-fi and Buy Me a Coffee allow users to withdraw earnings immediately.

Social media platforms and content monetization services are also integrating real-time payment options, giving creators faster access to their funds without waiting for monthly disbursements.

Benefits to creators

Instant payouts help creators attain financial control by better cash flow management. The payout time is cut down from weeks to real-time, helping them cover expenses, pay collaborators, and maintain consistent content production.

This also enables them to reinvest earnings more quickly into high-quality equipment, advertising, or platform growth strategies, ultimately enhancing their long-term sustainability in the creator economy.

‍

Conclusion

Innovation in digital payments for creators ensures getting paid on time is no longer a hassle for creators.

Micropayments enable small and seamless transactions, subscription models provide steady revenue, blockchain and NFTs introduce new monetization avenues, and instant payouts improve cash flow.

Payby simplifies this process by offering secure, instant, and flexible payment solutions tailored for creators. Whether you're earning through tips, subscriptions, or digital sales, Payby ensures fast and hassle-free transactions.

Get started with Payby today.

A research report by Straits Research states that the global buy now pay later market size was valued at USD 39.65 billion in 2024 and is projected to reach USD 435.20 billion by 2033.

The buy now pay later (BNPL) model is accepted with open arms in E-commerce, and there’s no denying it.

BNPL is a convenient way to divide payments into manageable installments spread across feasible intervals, often without interest. This convenience gives BNPL an upper hand compared to other debt sources.

Unlike traditional credit cards, BNPL has no high fees or complex terms which appeals to younger, debt-conscious shoppers.

In this blog, we’ll delve into the opportunities BNPL presents for businesses and consumers, its risks and challenges, and the trends likely to shape its future.

‍

Overview of BNPL and its growth in E-commerce

BNPL was traditionally an installment payment, often available for big purchases needing a lump sum amount as payment. They were tagged along with purchases like appliances or furniture and often entailed lengthy credit checks and rigid terms.

Today, the buy now pay later (BNPL) model is a sophisticated payment solution for E-commerce. This option is seamlessly integrated into online shopping platforms and is available as a checkout digital payment solution. Payments made using BNPL are approved in real time and are available at most e-commerce stores.

BNPL has hence transformed into a fully fledged payment solution that has changed how people shop online.

Key drivers of BNPL adoption

Here are the factors that are streamlining the growth and adoption of BNPL:

• Preference for flexible payment options - According to PYMNTS, 43% of consumers choose retailers according to their preferred financing options such as buy now pay later (BNPL) models. Modern customers are tech-savvy, informed, prefer convenience, and above all, are cost-conscious, which is why they prefer BNPL.
• Rise of fintech companies - Fintech innovations have been breaking boundaries and how, by integrating seamless payment solutions like BNPL directly into e-commerce platforms. They offer frictionless experience, real-time approvals, and low/nil interest rates.
• Millennial and Gen Z consumer behavior - Because the younger generation is more informed and thoughtful, they choose short-term and interest-free financing options over traditional credit cards. According to a study by Statista, 60% of BNPL app users are aged between 18 and 34.

‍

Opportunities for businesses with BNPL

E-commerce business owners skeptical about the adoption of the BNPL model into their ecosystem must check the following BNPL benefits:

1. Attracting New Customers

Today’s shoppers are both budget-conscious and convenience-obsessed. They want economy shopping experiences that offer amazing flexibility. BNPL has a unique blend of qualities that target either or both purchasing behaviors.

By integrating with BNPL models, you can appeal to a wider set of audience and demographics. You also get a competitive edge as early adopters. For example, fashion retailer ASOS reported a significant uptick in first-time customers after integrating Klarna’s BNPL solution.

2. Boosting Average Order Values

A study by Afterpay, a leading buy now, pay later service, revealed that retailers offering such options saw an average increase of 20-30% in conversion rates.

Deferred payment options make it possible for customers to plan their expenses smartly, by spreading them through multiple intervals, and shop more than they can afford. Customers can confidently purchase high-priced items with the availability of the BNPL option.

Industries such as fashion, electronics, and home goods have seen higher order values, with customers feeling more comfortable purchasing premium items.

‍

Risks associated with BNPL

With opportunities come risks, and as a business owner, you must be aware of them to find ways to tackle them all. Here are some of the risks to be wary of:

1. Overspending by Consumers

It is a fact that BNPL aids great purchasing power but it is also a truth that customers may overspend with this option.

BNPL is built to encourage affordability, but it also is the root cause for impulsive purchases that turn into debt. This accumulation of debt over time, no matter how tiny or big, can lead to financial strains on customers.

For businesses, it means extra friction to receive payments that include tracking customers who miss payment deadlines, levy late fees or penalties, and so on.

Because you have an ethical responsibility towards your customers and society, you must emphasize responsible spending if you are promoting BNPL.

2. Fraud Risks and Bad Debts for Businesses

BNPL does not work like the typical card-based payments. There are additional layers of verifications and approvals, though done on a real-time basis. Fraudsters use these extra steps to find gaps or exploit the verification processes.

Business owners must keep up with BNPL risks for consumers, security measures like real-time credit assessments, and more to be able to detect fraudulent activity or evaluate true creditworthiness.

Lastly, businesses face potential financial losses from uncollected payments or defaults. Some transactions even end up with chargebacks which is a tedious process causing emotional, operational, and financial strain on a business.

‍

Future trends in BNPL

Now that you are aware of the opportunities and risks, you need to also know about the future trends in BNPL to connect the dots of pay-later adoption in E-commerce:

1. AI-Driven Credit Assessments

Checking the creditworthiness of a customer is a critical element of BNPL. AI in credit assessments can ramp up the process for speed while ensuring accuracy. AI-driven algorithms analyze vast datasets to assess consumer risk profiles in real time.

Merchants can use these valuable insights to craft personalized credit limits and repayment plans, reduce defaults, and improve customer experiences.

Additionally, AI tools are instrumental in detecting fraudulent activities, providing an added layer of security for businesses.

‍

2. Increased Regulation and Compliance

As BNPL continues to grow, governments worldwide are introducing stricter regulations to protect consumers from over-indebtedness.

For example, the UK’s Financial Conduct Authority (FCA) has announced plans to mandate clearer terms and affordability checks for BNPL providers.

Businesses and BNPL providers must adapt to these compliance requirements, ensuring transparency in repayment terms and caps on late fees. These changes aim to foster sustainable growth while protecting vulnerable consumers.

3. Integration with Omnichannel Retail

BNPL is no longer confined to online shopping; it is rapidly expanding into in-store and mobile channels.

Retailers like Target and Best Buy have implemented BNPL solutions across their omnichannel strategies, allowing consumers to seamlessly utilize deferred payment options wherever they shop.

This integration enhances the customer experience, fostering brand loyalty and repeat purchases.

4. Partnerships with Traditional Financial Institutions

Collaborations between BNPL providers and traditional banks are reshaping the financial landscape. Hybrid BNPL-credit card models are emerging, combining the flexibility of BNPL with the perks of credit cards, such as rewards programs.

These partnerships not only expand BNPL’s reach but also address concerns around creditworthiness and repayment, making the model more robust and inclusive.

‍

Conclusion

BNPL has played an important part in transforming payments within the E-commerce domain. Customers enjoy the best of convenience and flexibility, while businesses can benefit from the tool that attracts new customers and boosts sales.

However, there are dangers associated with BNPL. Both businesses and customers must be responsible for its adoption. Customers must do their part by avoiding reckless spending and making purchases they cannot afford.

And, businesses must educate their customers and promote responsible use of BNPL. Furthermore, they must embrace AI-driven technologies, prepare for regulatory changes, and integrate BNPL into omnichannel strategies to make the most of this model.

That’s where payment solution providers like Payby can help. It is both important and difficult to keep up with the evolving standards of BNPL models and Payby can handle it for you.

Get started with Payby today.

Global real-time transactions are projected to reach $58 trillion by 2028, up 161% over 2024 - A new study from Juniper Research.

Real-time funds transfer has changed the face of modern finance and will continue to fuel its growth and adoption. With the ease and speed in transaction processing across sectors, we enjoy convenience that’s second to none.

But with convenience comes challenges and responsibility.

In this blog, we discuss the significant need to address fraud risks to maintain trust and system integrity.

‍

The significance of real-time payments in modern finance

Real-time payments are the process of instant transfer of funds across different accounts in just a matter of seconds. This invention has replaced traditional transfer methods like cheques, electronic funds transfer (EFT), and wire transfers with a processing time ranging from a few hours to several business days.

E-commerce, peer-to-peer payments, and payroll processing are the greatest beneficiaries of payments done in real-time. It has made the purchase of goods and services quicker, possible to settle vendor payments instantly, easy to share funds among friends and family, and so much more.

This system is powerful, so much so that it drives economic activity and reduces delays in cash flows. But, the very nature of immediacy is also the reason why transactions are exposed to fraud.

Fraud prevention in real-time payments is extremely critical to maintaining the trust and integrity of the system. Fraudsters use the reduced time limit for verification and oversight to carry out fraudulent activities.

‍

Common Fraud Risks in Real-Time Payment Systems

Let’s check out the common types of fraud shadowing real-time payment systems:

• Account takeover fraud - Hackers use tactics like exploiting weak passwords, phishing attacks, malware infections, and more to gain unauthorized access to user accounts and carry out fraudulent transactions.
• Social engineering attacks - Techniques like phishing and vishing are used to trick users into making security mistakes and reveal sensitive data which are then used by fraudsters to their fraudulent advantage.
• Synthetic identity fraud - A combination of stolen information of real users and fabricated data is used to create profiles and override security barriers to trick payment systems and carry out fraudulent activities.
• Transaction tampering - Fraudsters intercept transactions in process to manipulate the information and try to alter the details of the transactions or redirect the transfer of funds between accounts.
• Money laundering - Multiple transactions and transmissions are made to conceal the original sources of some funds or make it difficult to track some transfers depicting traces of illegally obtained funds.

‍

Best practices for preventing fraud in real-time payments

If you want to develop a shield against fraud, follow the below-mentioned fraud detection best practices:

1. Implementing AI-driven fraud detection

AI and machine learning fraud detection systems have the capability of picking up even minute traces of unusual activities that signify fraud. They read through patterns and behaviors to differentiate any deviation from the usual ones and flag them efficiently.

They are equipped with features like predictive analytics that proactively detect threats before they develop into fraud.

Business owners must check if their payment systems are integrated with tools like fraud scoring systems and behavioral analytics.

2. Leveraging tokenization and encryption

Merchants must leverage tokenization in payments that replace sensitive payment or user-related data with unique tokens. This ensures privacy and safety in cases of breaches where data access would still not reveal sensitive data.

Encryption also plays a critical role in safeguarding data during transmission and storage, protecting it from unauthorized access.

For example, retailers leverage tokenization to store a customer’s card information or a payment gateway encrypts the data being transferred from a merchant's website to the payment processor.

3. Two-factor authentication (2FA) and biometrics

2FA methods are using 2 forms of identification such as a combination of SMS codes and app-based verification. The additional method is an extra layer of security that safeguards transactions from fraudsters, where one method when compromised will still not lead to fraud.

Biometrics on the other hand includes verifying payments with biometric methods like fingerprint and facial recognition that are unique to every individual. Biometrics enhance security because they cannot be replicated by fraudsters.

As a merchant, you can use a combination of these 2 methods to secure your business and customers.

4. Real-Time transaction monitoring

Real-time transaction monitoring is another great strategy to prevent fraud. Constantly monitoring these transactions helps identify irregularities in user activity and flag them for possible fraud.

Use sophisticated fraud monitoring systems available in the market to analyze transaction patterns, identify anomalies, and flag suspicious activity.

These systems offer real-time alerts and notifications sent to both businesses and consumers. The promptness in alerts helps both parties to act quickly and take action against attempted fraud.

‍

Benefits of proactive fraud prevention for businesses and consumers

Staying ahead of the fraudsters and taking proactive measures to prevent fraud is better than managing it. Here’s why you must adopt fraud preventive measures:

For businesses

• Minimized financial losses: Proactive fraud prevention measures help businesses avoid financial losses borne out of fraud.
• Enhanced brand reputation and trust: Customers are more likely to trust businesses with stringent security measures because they report fewer breaches.
• Compliance with regulatory standards: Proactive fraud prevention measures help ensure compliance with regulations like PCI DSS (Payment Card Industry Data Security Standard), which are crucial for businesses handling payment card data.

For consumers

• Confidence in real-time payment systems: Real-time payments are a boon to financial transactions and successfully preventing fraud helps increase customer confidence and user adoption.
• Reduced risk of identity theft and financial fraud: Implementing fraud prevention measures keeps customers away from being victims of fraud attacks that result in financial losses.
• Improved user experience: Secure payment systems are seamless and stress-free thereby increasing overall user experience and satisfaction.

‍

Challenges in implementing fraud prevention measures

Here are possible hiccups that business owners looking to implement fraud prevention measures may come across:

• Balancing security and convenience: Strict security measures cause friction and lead to bad user experience and churn. It is critical to find a middle ground with robust security measures and seamless user experience.
• High costs: Advanced technologies designed to prevent sophisticated fraud like AI-powered systems are priced higher.
• Evolving threats: Fraud attempts are constantly evolving in accordance with the latest invention which requires businesses to stay ahead by continuous monitoring, adaptation, and innovation in fraud prevention strategies.

‍

Future trends in fraud prevention for real-time payments

Here’s what the future has in store for fraud prevention in real-time payment:

• AI and big data: Advanced analytics will improve accuracy in detection and play a pivotal role in fraud detection.
• Blockchain adoption: Transparent and tamper-proof transaction records will grow in popularity offering enhanced security.
• Regulatory evolution: New frameworks will come in motion to address emerging fraud risks in real-time systems.
• Biometric and behavioral analysis: Adoption and use cases of these technologies will increase which will redefine authentication and fraud prevention.

‍

Conclusion

Modern finance is designed to make our lives easy and seamless of which, real-time payments are a critical contributor. Fraudsters try to use the same features for their exploitative wants is why your business and customers need a shield.

Best practices like AI-driven detection, tokenization, and robust authentication, act as the shield against fraud which secure payment gateways like Payby can help you with.

We handle the complex part of security leaving you and your customers with the benefits of quicker payments.

Get started with Payby today.

There’s no shortage of payment apps available in the market.

Users have tons of options to choose from, starting right from low-cost options to apps laden with fancy features and functionality. It has become extremely easy for users to drop an app and the reasons are as tiny as an excessive number of permissions.

With the sea of options, user engagement and retention take a dip. That’s where gamification comes in.

In this post, we’re sharing how payment apps can use gamification to keep users engaged.

‍

Challenges in user engagement for payment apps

Here are the major reasons why payment applications are having a tough time with user engagement:

User disinterest

You do not want your users to use your app passively for a limited set of intervals and needs. Passive usage can result in slipping from the user’s mind and leading to them exploring other options in the future.

Make your app interesting, enhance its usability, and add more elements like tools, exclusive features, community support, deals and discounts, animations, and more to keep users coming back more frequently.

No unique value

While your payment app is making transactions easy, you need to do more to stand out. Instead of just tackling traditional payments, consider offering features like setting up recurring payments for utility bills, offering rewards per transaction, incentives for spending and gamified challenges to win more cashback.

Robotic not personalized

When interaction with an app feels robotic, customers are more likely to drop off. This includes  sending out irrelevant suggestions, messaging, notifications, and other in-app communication that is templated and generic.

A better and more liked approach to it is personalization. Receiving promotions and service offers that are according to their individual spending habits is a delight to customers and helps with user engagement.

Difficult user experience

A complicated application is a nightmare, and no amount of user instructions can fix it. There is no substitute for UX problems.

If it takes users 10 steps and a bunch of extra verifications to make a simple payment with an app, users will abandon it in a heartbeat. Apps should be easy to navigate, fast, secure, and seamless for users to make the most of every single feature.

Ensure your app’s UX is clean, simple, and needs fewer steps, eliminating any possible friction along the way.

‍

What is gamification in payment apps and why is it important

Gamification is using game-like elements outside of traditional gaming apps. These elements range from rewards such as point systems for payments to challenges such as leaderboards and milestones for financial betterment.

The end goal is to make a user’s experience more engaging. Here are some benefits of gamifying payment features:

• Transaction frequency - Adding incentives and challenges to financial transactions motivates users to make frequent transactions, for needs as well as wants.
• User engagement - When routine transactions become fun, user engagement improves drastically. It also encourages users to explore your app features and their use cases.
• Retention - Gamification in payments makes users return for rewards and achievements and continue to transact using your application.
• Competitive edge - Apps with gamified experiences, interesting challenges, and rewards often stand out from the crowd.
• Loyalty - Personalized offers and rewarding experience creates a personal connection with users, transforming users into brand advocates.

‍

Key gamification strategies that work for payment apps

Here are some gaming-inspired strategies that you can plug into your payments app:

Points and badge concepts

Here, users are incentivized with points for making transactions or referring friends. You can also choose to offer badges for completing financial tasks or using features like financial tools and checking out educational resources.

These badges entail cash back or points that users can then redeem for future purchases, extended access to premium features, gift coupons, or more.

Make your own concept stand out, but ensure it is easy, engaging, rewarding, and frictionless.

Milestones concept

You can adopt the level-based concept from gaming apps. The tier-based concept goes directly with the number of transactions made while the leaderboard concept goes with rewards earned. You can also add milestones for specific tasks and challenges like achieving savings goals.

Plan the leaderboard board strategically, such as designating top users' badges according to the number of transactions done. You can creatively gamify the number of referrals made, savings done, financial goals achieved, and other unique activities of the app.

Plan the entire process according to your app features and business goals.

Quizzes and tutorials

As a FinTech brand, you can introduce a fun twist to financial education with gamification and foster financial wellness among your users. You can also introduce tutorials to educate your customers about your app features and its benefits.

They can be used as a marketing tactic to help users navigate the process of availing discounts, and functionalities like auto payments for recurring expenses, and more which in turn increases application usage.

If you can keep your users excited and eager to explore your application, you will have secured repeat customers.

Offers and discounts

User engagement in FinTech apps is directly proportionate to the availability of offers and discounts. Cashbacks and discounts are a hit among users and the more offers they get, the more they will transact using your app.

Take a step ahead and offer tailored discounts and offers that are in line with user preferences and behaviors. Personalized offers that users can avail of will foster brand loyalty over some random coupons.

Social sharing rewards

Humans live in communities so coming up with community-themed engagement initiatives works wonders. For example, tasks users can do with their family and friends, earn badges, and share them on social platforms.

You can come up with initiatives like group savings goals that are designed to play among families or groups of friends. Such initiatives are bound to bring in users and drive engagement among existing ones.

‍

Behavioral psychology behind gamification in FinTech

Studies show gamification can lead to a 48% surge in customer engagement.

The first reason for this remains the same, gamification in FinTech apps makes financial chores exciting. Secondly, there’s a dopamine boost in users when payments are gamified like a game that stimulates users to keep playing.

When users reach a milestone, they experience a dopamine rush, a feeling of pleasure and satisfaction. This keeps them hooked till the next milestone, keeping them hungry for more.

Gamification also encourages a healthy sense of competition and the satisfaction of winning. Completion and collaboration are the motivating factors for engagement.

Achievements and the sense of winning calm our nerves and feed our need for validation and accomplishments, human traits we all experience.

‍

Conclusion

Gamification is no longer optional for payment apps looking to grab an early move advantage over their competitors. Gamification is the way ahead of the path of driving repeat sessions and building up a pipeline of loyal user base.

Platforms like Payby have implemented these strategies effectively, achieving the highest number of active users in the industry.

To learn more about keeping users engaged with innovative strategies, subscribe to our blog today!

The subscription-based business model has outgrown its traditional realm.

What was previously limited to the media and entertainment industry is now a multi-faceted business model having walked into the healthcare, eCommerce, automotive, and many other industries owing to how it facilitates a consistent revenue stream. 

In this post, we share the role of digital payments in subscriptions.

‍

The role of digital payments in recurring billing

With the rise in demand for seamless recurring billing, digital payments have come to our rescue. Here’s how digital payments support the subscription model:

Seamless transactions for subscriptions

The recurring billing process is in demand among customers and merchants for ease of expense management and as a consistent source of revenue generation.

However, the manual process is a chore and prone to errors. Digital payments can automate these transactions ensuring speed, accuracy, and ease of payments.

Subscription businesses and platforms can now easily integrate with payment gateways offering advanced functionalities like handling billing cycles. This integration is a win for businesses because it improves efficiency and provides a frictionless customer experience.

Reduced payment failures and churn

Advanced payment systems are needed to handle the nature of recurring payments which are otherwise subject to failed transactions in general.

Frequently failed transactions are a big blow to customer retention and revenue because they impact customer experience and confidence resulting in increased churn.

Advanced payment systems, with features like automatic card updaters and intelligent retry logic, reduce the risk of payment failures ensuring customers continue to enjoy uninterrupted services while businesses maintain consistent revenue streams.

‍

Advantages of automated billing

Subscription payment systems are not only a win for businesses but also a great option for customers. Here are some of the most common benefits to both parties:

For businesses:

• Improved cash flow: Because automated billing is not made on will and interest, it ensures payments are done on time. The auto debit feature helps reduce any possible delays and improves cash flow for an organization.
• Operational efficiency: When businesses do not have to intervene in the recurring payments process, they are left with a lot of time to focus on actual growth initiatives rather than administrative tasks.
• Forecasting: Digital payments for subscriptions streamlines income for the near future deciphering what revenue a business can expect over a period of time. These insights help make accurate financial forecasts and strategic decisions.

For Customers:

• Convenience: Recurring billing solutions spare customers the hassle of remembering due dates or manually processing payments. The payments are scheduled to be deducted automatically at fixed intervals. 
• Flexibility: Automated systems come with extreme levels of flexibility where customers are free to choose the payment schedules, payment obligations, and intervals that best fit their financial status.
• Uninterrupted service: Because the payments are made on time, there is no disruption to services offered. Customers can enjoy the benefits of reliable billing that ensures they don’t miss payments and lose services.

‍

Emerging trends in subscription payments

We have witnessed a fair share of disruption in subscription payments already, but there’s a lot more in store for the future. Let’s check them out:

1. AI-Driven insights and optimization

Artificial intelligence only makes the subscription payments model better. It provides advanced fraud detection and payment optimization capabilities that ensure no hiccups, breaches, or errors in the process.

AI-powered systems can analyze vast datasets in real time and identify fraudulent activities to enhance transaction security. Furthermore, businesses can use this intel to come up with personalized billing plans and tailor service offerings according to customer preferences and behaviors.

A report by McKinsey states companies that use AI-driven customer insights improve customer satisfaction by 10 to 20 percent and reduce early-life churn by as much as 30 percent.

2. Blockchain integration

Blockchain technology is popular for added security and transparency. Its integration with subscription payment systems ensures protected transactions that cannot be tampered with or overwritten and builds trust among customers.

This technology is an aid even for global subscription-based businesses because it facilitates seamless payments and secure cross-border transactions without the need for intermediaries, thereby reducing transaction costs.

According to a recent report, 90 percent of finance leaders believe that the currencies underpinned by blockchain will greatly impact business in the next few years.

3. Flexible payment options

Alternative payment options like digital wallets, Buy Now Pay Later (BNPL) services, and cryptocurrencies are now finding their way into subscriptions.

Digital wallets like PayPal and Apple Pay offer quick, convenient transactions, while BNPL solutions come with flexibility in managing payments. Cryptocurrencies are also gaining traction, particularly among tech-savvy consumers and in global markets where traditional banking systems may be less accessible.

Recent data shows that Alternative payment methods have proven to drive more revenue (5.0% renewal invoice decline rate) and help prevent fraud (0.9% of failed fraud transactions).

‍

Best practices for leveraging digital payments in subscriptions

Businesses looking to make the most of the subscription model and build subscription revenue growth must incorporate these best practices:

Choose the right payment gateway

The payment gateway you will select determines your capability of offering advanced digital and subscription payment options.

So, you must look for gateways that integrate seamlessly with your platform, support multiple currencies, offer multiple payment methods, have the latest features or functionality, and provide robust security features.

Choosing a reliable payment infrastructure like Payby can simplify this process, offering comprehensive solutions tailored to subscription needs, and resulting in a smooth customer experience.

Ensure compliance

To offer subscription-related payment options, businesses need to stay compliant with regulations like GDPR and PCI DSS that are set in place to safeguard customer data and maintain trust.

Non-compliance on the other hand will attract hefty fines and cause reputational damage.

Your choice of a payment service provider like Payby can help you stay compliant by meeting all regulatory requirements, reducing risks, and protecting customer information.

Offer diverse payment options

Make sure you offer a diverse range of payment options that include credit cards, digital wallets, and BNPL besides the traditional debit cards option.

This diversity makes it possible for you to cater to the varying preferences of a global customer base, without losing revenue in the process.

Plus, the level of flexibility enhances customer experience, reducing friction and improving retention. Payby can help businesses effortlessly integrate multiple payment methods that are built for convenience and satisfaction.

‍

Conclusion

The subscription-based business model with its unique capability coupled with automated billing benefits is here to stay.

Customers demand a seamless payment experience that places subscription payment systems at the top. Businesses must address and oblige to the shift in customer preferences to stay on top of the game and be competitive.

That’s where you need to choose a reliable payment partner like Payby. With tailored solutions designed to meet the unique challenges of subscription-based businesses, Payby can help you streamline processes, ensure compliance, and provide the best possible experience for your customers.

Get started with Payby today.

Frictionless payments are a win-win for both businesses and customers.

Now, we’re entering a new era of invisible payments—a frictionless experience taken to its peak. This evolution shifts from simply reducing steps in a transaction to payments happening without direct initiation.

While invisible payments are rapidly gaining traction and winning over customers for speed and convenience, they also raise questions about privacy, security, and trust.

In this blog, we’ll dive into everything you need to know about invisible payments—what they are, real-world examples, how they work, and the common challenges in adoption.

‍

What are invisible payments?

Invisible payments are transactions that aren’t initiated by the customer. There isn’t any trace of manual interaction between the customer and the payment interface which generally requires customers to click or tap, enter the payment details, and later validate them.

The process happens automatically at the end of a transaction and in the background without the active role of a consumer, with the assistance of payment methods like mobile wallets, biometric authentication, and connected devices.

Current use cases of invisible payments range from e-commerce, brick-and-mortar stores, and subscription services, done via mobile payments, contactless payments, and even voice-commanded payments.

‍

What are the benefits of invisible payments?

Here are some of the benefits of invisible payments:

Better convenience

The process is built to be frictionless and effortless. This means customers do not need any physical items like credit cards, debit cards, smartphones, etc to make a purchase. They can forget to carry their smartphones and payment details and still make a payment. Also, there are no manual entries of payment details or payments done by customers.

Speedy payments

Checkouts are faster for invisible payment transactions in retail, ride-sharing, and online shopping because they happen automatically in the background. The process is also devoid of manual confirmation of any kind.

Improved customer experience

Customers prefer no friction at the point of purchase. Merchants can create a smooth experience and incorporate automated tailored recommendations, discounts, or rewards to offer an unmatched experience. An effortless experience encourages customers to keep returning.

Accurate payments

Manual payments done by customers are more prone to errors, like entering in wrong payment details/amounts/dates, and so on. Automated payment systems on the other hand are designed to provide accuracy with little room for errors.

Enhanced security

This technology is safeguarded with security protocols like biometrics, encryption, and tokenization to protect transactions. They also come integrated with automatic fraud detection that detects and flags unusual activity and user behavior.

Future potential

This technology has the potential for disruptive innovations when coupled with mobile apps, IoT devices, and wearables. Such integrations will bring solutions that move beyond automated subscription services to make a consumer’s life better.

Operational efficiency

With quicker payout and no payment disputes, merchants can maintain a better relationship with their suppliers. Moreover, quicker payments and predictive transactions mean a better hand at inventory tracking and fewer cash-handling requirements.

‍

How do invisible payments in consumer transactions work?

The process of physically using a card at a point of sale or entering your card details on a payment terminal is swapped with a process that needs no customer action. This means a visible process is replaced with an invisible one, and here’s what it looks like:

1. User enrollment - Payment details such as credit card, debit card, or mobile wallet are securely stored within a platform or app using encryption or tokenization.
2. Payment authorization - The user authorizes the platform with the desired action like a prompt to a virtual assistant, tapping a contactless card, and so on, and provides consent to automated payments.
3. Payment initiation - Payments are triggered at the end of a transaction like when customers end a ride or walk out of a cashier-less store. Sensors, GPS, or other technologies detect that the service has been extended and initiate payment.
4. Payment processing - Payments are automatically processed with reference to any discounts or terms and conditions, via the opted payment method.
5. Notification - Customers are prompted at the end of the transaction via an SMS, email, or in-app. The status is updated and the receipt is sent to both parties.

‍

Examples of invisible payments

Subscription services are by far the most common and a prime reminder for us all. The auto-debit and auto-renewal nature of these payments are the best examples of invisible payments. However, there are many more advancements in this space that merchants must be aware of: 

Checkout-free stores

Amazon Go already offers a checkout-free experience without the need for a traditional checkout. Users can check into the app, simply walk into Amazon Go stores, collect the items they need, and leave.

The sensors and cameras track the items picked and bill them when the customers leave, triggering an invisible transaction as set up by customers. At the end of the transaction, a digital receipt is sent.

E-commerce and apps

Uber is the early adopter of invisible technology. The app automatically charges the customer at the end of a trip via the chosen method of payment.

Amazon has also launched an e-commerce pivot which is invisible payment’s close second. The one-click buy button allows the customers to purchase with a predefined address and payment method.

Biometric payments

This method uses a customer’s unique biometric features to initiate a transaction, which is a deviation from the traditional method of selecting a payment method after every transaction.

For example, customers can wave a hand and authenticate purchases via Amazon’s payment system - Amazon One. Some stores in China also have facial recognition-triggered automated payments at checkouts. Smile to Pay has been adopted by a lot of China’s convenience stores.

Connected cars

With this technology car owners and drivers can pay for fuel via a car’s touchscreen. Similarly, some airports have invisible parking where the number plates of vehicles are detected and automatically billed.

Here again, the car must be registered for invisible payments with a chosen mode of payment.

‍

Barriers to the adoption of invisible payments

Multiple industries have been quick to adopt invisible payments such as retail, transportation, and hospitality, but it hasn’t gotten stern traction.

Here are some reasons for slow adoption, and factors that merchants should be aware of if they wish to incorporate invisible payments in their ecosystem:

Multiple account creations

There are no universally accepted single sign-in options for invisible payments yet. So, merchants adopting this technology are building their processes in-house, each with their unique steps and processes.

For example - Amazon Go store users need the official app to shop at the store and then have to switch to another app if they wish to shop from another store.

The hassle of multiple account creations across multiple mediums is real. Customers using the traditional method to checkout from multiple stores using one card is a lot more convenient than downloading tons of apps and registering or authenticating each one.

Privacy issues

Just like contactless payments, customers are worried about the security of their sensitive payment data. Invisible payments store customer data to process automatic transactions and customers are worried about the misuse of their data or breaches.

Biometric data is another invisible payment security issue. Not all customers are comfortable sharing their personal data like biometrics and prefer to validate or initiate transactions via traditional methods like cards and pins or passwords.

Scaling-up

Bringing the invisible payments infrastructure is not ideal for all businesses, and many have resource limitations that hinder adoption. Plus, the technical infrastructure implementation is a huge challenge that businesses should be able to navigate.

For instance, a larger store with a diverse range of products needs more time, effort, and costs to adopt the invisible payment infrastructure compared to a smaller store with a limited set of products.

‍

Conclusion

The idea of an invisible payment infrastructure ultimately boils down to providing a frictionless experience to customers.

Merchants can come up with innovative ways to incorporate invisible payments ensuring no friction or offer better payment options and experience.

For business owners experiencing resistance to adoption, offering a similar frictionless process and a better choice of payment methods can work like a charm. Listen to your customers' preferences and oblige.

But it shouldn’t have to be your responsibility. Partnering with payment solutions like Payby helps you focus on your core business, while we handle your payment needs and keep you ahead of the curve.

Payby offers secure omnichannel digital payment solutions. Our advanced fraud detection and prevention mechanism is built to keep you secure. We leverage AI-based fraud monitoring, 3D secure authentication, and transaction risk analysis and offer robust integrations with the best CMS platforms.

‍Get in touch with Payby today.

E-commerce businesses strategizing for long-term success and financial stature focus on Customer Lifetime Value (CLV) as one of the prime metrics.

CLV is the total revenue or business a company can expect from a customer for the entire time they remain a paying or loyal customer.

It isn’t just about how much money a company can make from a customer but also acts as the foundation that can shape the success or failure of a business.

Businesses aware of their CLV get the chance to understand customer behavior, optimize marketing strategies, and foster loyalty.

The higher the CLV of a business, the higher its revenue and customer loyalty, and it sheds a positive light on product-market fit.

While there are several strategies to boost customer engagement and retention, this post discusses how digital payments help improve CLV in the long run.

‍

How do digital payments enhance CLV?

There’s so much digital payments can do beyond processing transactions. They can be a powerful tool for businesses that know how to use it. They are equipped with the capability to impact customer experience, loyalty, and ultimately customer lifetime value. Let's see how:

1. Enhanced Convenience for Customers

With all the options available in the market, convenience is the top priority of customers. One friction point can make or break the customer-business relationship and digital payments often elevate convenience.

Customers can seamlessly pay for a product in their preferred method - credit cards, mobile wallets, or even one-click payment options. Each of these methods is quick, easy, and effortless, elevating customer experience.

As a business owner, you must take all necessary steps to offer your customers an unmatched digital payment experience with fewer steps. By ensuring there are no unnecessary steps involved in the payment process, you will reduce friction, and encourage your customer to keep purchasing from you.

2. Accelerated Checkout Processes

Imagine having to manually enter every detail or dealing with a lagging payment interface. Both of them are a big ‘no’ in the books of user experience.

Fewer steps to complete a transaction alone wouldn’t satisfy a customer. An amazing payment process does not just end with reducing the checkout steps, every step in the process has to be efficient.

This means, less manual work, reduced wait time, a cleaner and simpler interface, and speedy checkouts. Merchants must improve the efficiency of the checkout process for successful transactions and encourage repeat purchases that directly contribute to CLV.

3. Boosting Customer Retention Rates

Businesses have to stand out of the crowd to be able to retain customers, so an unmatched digital experience is non-negotiable.

Quick, secure, and hassle-free experience from the beginning to the end of the checkout experience creates an unmatched overall experience and binds customers to the brands. Such a relationship is rooted in trust and fosters loyalty, keeping your brand at the top of customer’s minds, and encouraging them to return for future needs.

Business owners can come up with unique e-commerce payment strategies to increase customer retention rates.

4. Leveraging Data for Personalized Offers

Digital payments rely on data transfers and capture valuable insights and findings about customers. Business owners can use these unique findings to strategize their product offerings and customize products according to the choices and preferences of their customers.

Customized products that are in line with customers’ unique needs and interests can never disappoint customers but rather lead to unplanned purchases. The result is increased spending and retention.

Merchants can take a step ahead and craft personalized offers, promotions, and loyalty rewards and increase CLV with digital payments.

5. Building Loyalty Through Rewards and Incentives

If you want to create a stand-out experience, you may integrate payments with loyalty programs. When you reward your customers with points, discounts, or other benefits for making a purchase, you give them another reason to make more purchases in the future.

Loyalty programs in payments incentivize repeat purchases, keep your customers engaged, and turn them into brand advocates for life.

6. Driving Recurring Revenue with Subscriptions

Another way of creating personalized payment experiences is to use digital payment solutions to implement seamless subscription models.

Subscription models are designed for recurring billing which ensures predictable revenue streams for your business. It also strengthens your brand’s relationship with customers by constantly being at the forefront of their routine.

7. Reducing Transaction Costs and Fees

Traditional payment methods like wire transfers and other legal credit card systems have a higher price tag for transaction costs and fees.

Digital payments in comparison to the traditional methods bear lower transaction costs and are super cheap. Your business can use the saved costs to come up with strategies to enhance customer experience like better loyalty programs or exclusive discounts, which result in higher CLV.

8. Simplifying Return and Refund Processes

Another component of trust is an easy return and refund process. Digital payments play a huge role in the return and refund process by automating refunds to ramp up the process.

You have to offer your customers the simplest refund process they have ever come across and you can leverage digital payments to make the refund process a breeze for your customers. Such a positive experience increases the likelihood of future purchases.

9. Expanding Sales Through Cross-Selling and Upselling

Digital payments-backed data insights are a superpower for your business, not just to create a personalized experience but because they offer the means to enable upselling.

If you have visibility on your customer’s purchasing habits and patterns, you can use them to make further recommendations and create demand. Recommending complementary products or premium upgrades during the checkout process is a great strategy to increase the average order value and encourage customers to check out more products.

‍

Conclusion

CLV or customer lifetime value has a direct impact on a business’s revenue and profitability.

Research by Harvard Business Review shows that increasing customer retention rates by 5% increases profits by 25% to 95%. It is always better to find ways that retain customers than try to acquire new ones. CLV validates that customers are making repeat purchases, upselling, and are our brand advocates.

Digital payments experience is one of the proven ways, tools, and strategies that businesses can use to increase their CLV score. If you can make the most of the digital payment options available in the market and bring them to your ecosystem, you will create a seamless, personalized, and rewarding shopping experience that drives customer loyalty and long-term growth.

We also recommend choosing a payment solution provider that integrates well with both online and offline commerce tools your business makes use of. This will help you run integrated functions that can help fuel other strategies to boost CLV.

At Payby, we are equipped with the means to execute your CLV boosting strategies right from streamlined checkout experience to unique subscription models and loyalty programs.

We incorporate and upgrade our products and solutions to the latest innovations and advancements to be able to provide a payment experience that is second to none.

Boost your CLV and achieve sustainable e-commerce success with Payby. Get in touch with Payby today.

Wearable devices have changed how we monitor our health and are now set to transform payments.

What started as calculator watches back in the 1970s, ushered in the digital era of fitness trackers in the early 2000s and ultimately smartwatches in the 2010s.

Consumer demand for convenience, personalized experience, and security has increased the popularity and adoption of wearable technology and is slowly advancing toward digital payments.

In this post, we’ll explore the impact wearable technology will have on our digital payment habits and what’s in store for the future.

‍

What is wearable payment technology?

Wearable payment technology allows customers to make contactless payments with devices such as smartwatches, fitness trackers, rings, wristbands, keychains, and so on, that can be worn.

Like contactless debit and credit cards, wearable devices are enabled with near-field technology (NFC) or radio frequency identification (RFID) that facilitates contactless one-tap payment with a flick of your wrist.

Customers can use these wearable devices to purchase products and services without the need to carry physical items like debit/credit cards and smartphones. Because the technology is built to work with one single contactless tap, it is speedier and more efficient compared to a card-initiated payment.

‍

How does wearable payment technology work? 

Customers need to link their wearable devices to their digital wallets, such as Apple Pay and Google Pay, which store their bank account or debit/credit card information. It can be done via a smartphone or an app.

Wearable technology relies on secure tokenization that allows for the safe transmission of sensitive payment data into the wearable device, which can then be used to make payments.

The first step is to activate the payment facility on the device via phone or an app. Customers can then turn their devices on to the payments interface and process payments by bringing their wrists near the payment terminal.

‍

What are the benefits of wearable payments?

While convenience is the top benefit of making contactless payments with wearable devices, there are a lot more benefits in store for customers and businesses offering them. Here are some of them:

1. Ease of use

Customers do not need to carry extra items like a card or a mobile phone to make payments. This eliminates the hassle of extra steps like pulling a card out of a wallet or phone out of pocket. Users can make payments just with the device they have worn. Plus, The process in itself is rather quick and seamless, with no friction.

2. Contactless payments

NFC technology is built to process payments from the range of a few centimeters without having to touch any interface of a Point Of Sale (CPOS) terminal. This is desirable for customers who prefer hygiene and safety which has been a priority since the onset of COVID.

Also, digital wallets are a popular method of payment and their integration with easy-to-use wearable technology will drive the adoption of contactless payments. Businesses that facilitate wearable payments will benefit from it.

3. Personalized experience

A lot of data goes into the process of integrating wearable technology into digital payments. Wearable devices collect data from users to process the transactions, data like user behavior.

Businesses can obtain unique findings about users and come up with customized offers and products for their users and benefit from them.

4. Enhanced security

Smartwatch payments do not just work by bringing them close to the payment terminal. There is an extra biometric security for wearables like facial recognition or fingerprint required to confirm a payment.

Also, wearable devices encrypt the payment data transferred from the phone/app to ensure the data is secure and cannot be read by other parties. Such enhanced security minimizes the risk of identity theft and other payment-related frauds.

5. Valuable benefits and rewards

Merchants have a chance to attract more users with new benefits linked with wearable payments.

For example, you can incentivize people to make wearable payments with early access to new products or services and attract more engagement. You can also reward people for meeting their activity goals and come up with gamified programs for higher user engagement.

6. Early-mover advantage

Customers are always on the lookout for new and emerging trends, technologies, features, and devices. Businesses that adopt the latest technologies and trends, like wearable payments, can gain a competitive early-mover advantage by appealing to customers eager to try innovations.

‍

Examples of wearable payments

Wearable payments are not just limited to smartwatches, which is why the technology is set to change the face of digital payments in the future. Here are other examples of wearable devices integrated with payment capability:

Devices with user interface

Smartwatches and fitness trackers fall in this category as they come with a touchscreen and audio-visual output, offering an amazing user interface. There are tons of smart features in such devices with multiple use cases. Integrating payments into those devices brings out the essence of convenience.

Devices without a user interface

The next frontier of wearable technology has no user interface such as rings, bracelets, jackets, keychains, etc. They are smart devices capable of processing payments and do not work like a typical device, i.e. they are non-interactive but can process NFC-enabled payments.

‍

Impact of wearable payments on consumer habits

The increased adoption of wearable devices and wearable payments will lead to a shift in consumer habits that can ultimately be a boon for your business. Here are the expected changes to help your business benefit from it:

Increased Frequency of Small Transactions

Wearable payments are designed for quick transactions which will ramp up low-cost purchases like everyday essentials, recharges, memberships, and more. You can come up with low-cost offerings or subscriptions that can be purchased via wearable devices feasibly and increase sales.

Increased Impulse Purchases

Because wearable payments are easy, accessible, and quick, customers are likely to make unplanned purchases. Your business can benefit from offering such non-friction payment methods to encourage more sales.

‍

What are the risks of adopting wearable payments?

You must be wary of the risks wearable payments may come with to safeguard your business.

• Technical - Just like any other technical device, a wearable device is prone to glitches and errors. This can lead to failed payments or chargebacks.
• Security - Without stringent security measures and protocols in place, you and your customer’s sensitive data can be at risk. Ensure adherence to all security protocols for maximum safety.
• Theft - Loss or theft of wearable devices activated for payments can trigger unauthorized transactions that your business and payment gateways should be able to detect and prevent.
• Early stage - The IoT and wearable payments infrastructure is still in its early stage and requires a lot of approvals to drive adoption globally.

‍

Security measures required to enable wearable payments

Here’s a list of the security measures your business needs to safeguard against payment fraud:

• Tokenization - Tokenization can help replace sensitive card data with encrypted tokens that cannot be read or used by fraudsters.
• Biometric Authentication - Biometric methods like fingerprints, facial recognition, or voice identification are unique to each individual and act like an extra layer of protection that cannot be replicated.
• Near Field Communication (NFC) Security - NFC technology works only when the wearable devices are in permissible proximity to the payment terminal.
• Two-Factor Authentication (2FA) - Wearable devices clubbed with an extra layer of verification like a pin or a prompt can maximize security.
• Remote Lock and Disable Features - Remote control via a phone can disable a wearable device in case of theft or glitches.
• Secure Element (SE) - Secure elements like tamper-proof hardware components can store and process payment data securely.
• Encryption of Payment Data - Encrypting payment data is a must for secure communication between devices and payment terminals.
• One-Time Use Codes (Dynamic CVVs) - Single-use authentication codes are an extra security layer for wearable payments.
• Transaction Limits - Adding a cap for wearable payments helps mitigate risks and unauthorized transactions.

‍

Where is the wearable payments industry headed?

Let’s discover some emerging trends in the future of digital payments:

1. Surge in health apps/services - Wearables are linked with health and fitness use cases, which will increase integration and demand in services such as gym memberships, medical treatments, or wellness subscriptions. Automation is the next step.
2. Increased use cases - Wearable payments will become a major part of our lives integrating with everyday transactions like retail, toll payments, public transport, and so on.
3. Environment consciousness - With heavy demand and availability of a variety of wearable devices customers will have a preference for devices made of sustainable materials.
4. Digital assets adoption - Wearable devices will in the future also support cross-border payments as well as the purchase of cryptocurrency and digital assets.
5. Gamification - While merchants will try to maximize loyalty program offerings, technology companies will come up with interactive features like gesture payments, augmented reality, and more.

Better and expanded integration of wearable devices with technologies like the Internet of Things (IoT) and Artificial Intelligence (AI) will connect and facilitate interaction with smart appliances, and vehicles alongside retail.

‍

Conclusion

Wearable technology is growing in popularity and the convenience and efficiency it offers will bring rapid adoption. Businesses willing to stay ahead should adopt a payment solution compatible with wearable technology.

Payby can help you keep up with customer demand with its smart, secure, and adaptable payment solutions.

Get started with Payby today.

Users across the world are now recognizing the potential of crypto payments more than ever before.

Security, slashed transaction costs, borderless nature, heightened security, and innovation, are some of the benefits that have driven over 560 million people to own crypto worldwide.

In this blog, we explore why crypto-enabled payment gateways are becoming popular amongst businesses too.

‍

What are crypto payment gateways?

Crypto payment gateways allow purchasing goods and services using crypto as a method of payment. They authorize the transfer of these digital assets by acting as the intermediary and facilitating their conversion to fiat money or safekeeping (as desired by the business).

There are multiple benefits associated with businesses partnering with crypto payment gateways. Businesses get access to a completely new set of audiences who prefer using their digital currencies to transact. This opens up a new avenue for profit and creates a unique business reputation in technological innovation.

‍

Advantages of crypto-enabled payment gateways for customers

Here are the benefits of crypto-payments for customers:

1. Heightened security and protection

Blockchain technology of crypto is decentralized and encrypted. These properties offer transactions that no one can override or get control of, making them highly secure with lower chances of frauds.

2. Better financial control

Crypto offers owners with undisturbed access to their funds. Traditionally, multiple factors like account bans cut users' access to funds, while in crypto-enabled payments, users have complete ownership and autonomy over their assets.

3. Seamless global reach

Payment gateways have made it possible for users to transact or buy goods and services with no geographical boundaries. It includes sending remittances across countries with absolutely no interference from any financial institutions.

4. Instant payments and settlements

Payment processing and settlement of a transaction may take some time, especially if it is a cross-border transaction. Crypto payments on the other hand are processed instantly, giving customers the benefit of faster settlements and a better shopping experience.

5. Access to financial inclusion

Crypto demands no bank account to be able to transact. Just with access to the internet, it offers low-cost transactions and equips the underbanked and the unbanked population with financial tools.

6. Added rewards and incentive opportunities

Crypto payment gateways have found ways to reward users for transactions with digital assets. They offer tokens, yield farming opportunities, and reward programs that add to the value of their digital assets ownership and financial well-being.

7. Enhanced privacy

The decentralized nature of crypto offers supreme privacy and anonymity. Customers can make purchases without providing their personal data which can be misused when breached.

‍

Advantages of crypto payments gateways for businesses

Now here are the benefits of crypto for businesses:

1. Slashed costs

Merchants do not have to pay a sum of money as huge as a normal transaction fee while dealing with crypto payments. It helps merchants retain more sales per transaction, ultimately resulting in greater revenue.

2. Global reach

Cross-border transactions attract regulatory restrictions across currency conversions and terms that are not a concern with crypto. This gives businesses the chance to sell anywhere and to anyone without geographical restrictions.

3. Chargeback management

Crypto payments come with security, so there’s little room for disputes to arise, which ultimately leads to chargebacks. Plus, transactions in crypto are irreversible, further reducing the chances of chargebacks to occur. Not having to deal with chargebacks helps merchants save on management costs, time, effort, and resources.

4. Marketing edge

There aren’t a lot of merchants accepting crypto payments for their products or services. Choosing to walk this path gives merchants a unique market value and tech-first selling proposition that can help build their brand’s affinity and ramp up sales.

5. Customer retention

Crypto payment gateways have also incorporated tokenized loyalty programs for their partner’s customers. Such branded tokens offer discounts, merchandise, or other offers as set by businesses, who can use this feature to attract and retain more customers.

6. Automation prowess

Cryptocurrency development requires the deployment of smart contracts which offer automation capabilities. Smart contracts help automate business areas like contract execution, payment settlements, and supply chain management. And, automation helps with efficiency, errors, disputes, and mundane work.

7. Instant settlements

Crypto payments are processed faster which not only is a benefit for customers but helps merchants with better cash flow management. Merchants can use better access to cash for reinvestment, bill payments, or innovation capabilities.

8. More revenue

Micropayments and microtransactions are possible with crypto as payment. Being able to accept such payments with low fees attached to them opens up new revenue streams for merchants.

‍

How do crypto payment gateways work?

Here’s how payment gateways enable crypto payments:

Step 1 - Customers come across and select the payment method of crypto and their desired currency on the checkout page.

Step 2 -  If the merchant wants, the gateway facilitates the conversion of cryptocurrency to fiat money according to the ongoing exchange rate.

Step 3 - The gateway now confirms and generates a payment address to link it to the transaction. The cryptocurrency amount must be transferred from the customer’s wallet to this business’s address.

Step 4 - Upon receiving the payment address details, customers now transfer the amount, which is then broadcast to the appropriate blockchain network.

Step 5 - Now comes the consensus process where the transaction is verified throughout the blockchain network.

Step 6 - After the confirmation of the transaction from the blockchain network, the merchants are notified.

Step 7 - If the merchant wants to retain ownership of the cryptocurrency received, it is transferred to their crypto wallet. Otherwise, it is exchanged for fiat money according to the ongoing currency exchange rate.

Step 8 - Finally, the customer is notified about the confirmation and transfer via an email or on-screen notification.

‍

Top crypto payment gateways

While payment gateways like Payby offer most payment modes, here are some other options:

1. Coinbase Commerce

A Coinbase product, this crypto payment gateway allows merchants to accept Bitcoin, Ethereum, and Litecoin as payment methods. It supports many crypto-enabled benefits like instant settlements, customizable checkout options, and detailed analytics.

Speculations are that this gateway is a great option only for merchants getting started. Its 1% transaction cost is a major loss of revenue for a large transaction volume. There’s also a compliance issue with Office of Foreign Assets Control (OFAC) regulations which limits its global network. Other demerits include manual refund request management for merchants.

2. BitPay

BitPay is a popular gateway option for merchants because it supports accepting Bitcoin and Bitcoin Cash payments through online and in-person channels. Features that make BitPay one of the top choices include, quicker settlements, automatic fiat conversion, multiple currencies support, a user-friendly interface, robust security measures, and more.

Regarding the demerits to be wary of, BitPay has no free plans which might be heavy on your business’s wallet, and it has a waitlist for businesses looking to get a new business account which can delay their crypto-enabled payments adoption.

3. PayPal

PayPal has established itself in online payments and has moved to crypto-enabled payments now. It offers the best of both the worlds of fiat and digital currencies-enabled transactions, in one place. Some of its attractive features include crypto price alerts and a streamlined crypto transaction process.

Among the drawbacks include better compatibility for personal accounts as opposed to business requirements, geographical restrictions, a limited number of cryptocurrencies, and a lack of e-commerce integrations.

‍

Popular cryptocurrencies used for payments

Here’s a detailed look at popular cryptocurrencies widely used for payments:

• Ethereum - It facilitates decentralized applications (dApps) and smart contract-driven payments that process transactions faster. Ethereum is known for its contribution to enabling DeFi and NFTs.
• Litecoin - If you are looking for a faster, more affordable digital currency as compared to Bitcoin, Litecoin will appeal to you. Litecoin crypto transactions are faster because their block time is 2.5 minutes. Additionally, it has low fees.
• Bitcoin cash - As an initiative to complement Bitcoin, BCH has a bigger block size, is faster, cheaper, and is a great option for daily transactions.
• Ripple (XRP) - XRP’s best use case is for low-cost cross-border payments. Its RippleNet network offers settlements in real-time and hence is the choice for brands looking for better international payment systems.
• Binance coin (BNB) - Built initially as a utility token, BNB has grown to incorporate multiple features. It facilitates transaction fee discounts and merchant payments and is popular across the Binance ecosystem and other platforms​.

‍

How can businesses adapt to crypto-enabled gateways?

Incorporating a crypto payment gateway into your ecosystem and being able to accept crypto payments might get tricky. Here’s how to make the transitions smooth:

1. Assess Demand and Compatibility

Study your customer base closely to evaluate if they are ready for and need crypto-enabled payment gateways. Study the market trends to assess if there’s demand and if your business ecosystem can integrate with the new payment method.

2. Choose a Crypto Payment Processor

Your choice of a crypto payment processor like Payby affects integration, adoption, and customer experience. Do your homework to assess which processor can facilitate this smooth transition yet add value to your business.

3. Set Up a Cryptocurrency Wallet

Your business needs a cryptocurrency wallet to receive and store digital currencies earned from transactions. There are multiple types of wallets like hot wallets for immediate access and cold storage for more secure long-term storage. Make the right call.

4. Integrate the Payment Gateway into Your Website or POS System

You need your crypto payment processor to integrate into your existing payment systems, be it website or point-of-sale (POS) systems. Processors like Payby assist well with both online and in-store purchases.

5. Set Up Automated Fiat Conversion (If Necessary)

To avoid volatility risks of conversions, some merchants prefer automated and instant conversion of digital assets to fiat money. This is a choice and depends on the merchant entirely.

6. Define Payment Policies and Update Terms

Ensure your business terms and conditions as well we payment policies reflect how you plan to deal with crypto-enabled payments and make the documents public. Include factors like refund procedures, transaction fees, and more.

7. Implement Security Measures

Deploy strong security measures such as two-factor authentication (2FA) and encryption, to protect both customer data and business assets. Keep monitoring wallet security and transactions always.

8. Train Staff on Crypto Payments

It is critical for your employees to know the nuances, do’s, and don’ts of crypto payments. Train them on how to process crypto payments and troubleshoot any issues.

9. Test and Monitor User Experience

Test the newly integrated system before launching it to the public. Make sure there are no issues that can affect user experience. Also, ensure to keep doing routine checks post-launch.

‍

Conclusion

The market is changing and so are the customer’s needs and demands.

You need to access and incorporate the latest payment methods into your ecosystem to not lose customers of any sort, and Payby can help you get there.

Get started with Payby today.