The ‘Payments as Experience’ Era Will Boost Global Commerce

Once almost an afterthought, payments are now an experiential component, requiring nuanced and data-driven care.

So said Neil Erlick, chief corporate development officer at payments platform Nuvei, as he lent his viewpoints to PYMNTS’ “Executive Insight Series: Top of Mind.”

“We’re kind of seeing this shift, if you will, from our clients, from our merchants around the world, where they’re starting to appreciate the payment experience and the checkout experience and what that means to give them a competitive edge,” the Montreal-based executive said.

When you think about it, the change is understandable. Payment methods like buy now, pay later (BNPL) or digital wallets, after all, have captured the imagination — and the spending power — of the next generation of shoppers, namely Generation Z.

This is clear in data from “New Payments Options: Why Consumers Are Trying Digital Wallets,” a PYMNTS and Nuvei collaboration, data from which finds that 66% of Gen Z consumers and 67% of millennials gave digital wallets a go in the past year for the first time.

That’s one part of the shift Erlick means. The other part is a retail awakening from the pandemic era that payments are moving from cost center to something different on the P&L.

“Payments, I’ve always said, [are] like the lifeblood of the entire commerce industry, whether we like it or not,” he said. “I think people are starting to come around to that thought of making the payment experience itself as good of a process as what the customer’s actually buying, or what service they’re getting. They’re coming around and understanding the importance now.”

Get the study: New Payments Options: Why Consumers Are Trying Digital Wallets

From Cost Center to Revenue Accelerator

To his point about the cost of payments versus the value of the experience they now provide, Erlick is decisively in the camp of those who see paying as experiential and profitable.

“The biggest difference is that for so many years payments were looked at as this cost center,” he said. “We needed to have it, we needed to be able to accept payments. Now, through the relationships that we’ve developed, through all the information and the analytics that we provide, we’ve seen this shift from a cost center to revenue accelerator.”

That means it’s top of mind “with all of our partners, regardless of the region, regardless of the vertical, regardless of their demographics,” he said, as is “helping educate them, and showing them how they can make the user experience better.”

Taking this tack, merchants are achieving higher approvals, increasing authorization rates, and ensuring that a customer who enters a physical store or pops onto an eCommerce site “has the absolute best experience possible,” with the bonus to consumers and merchants that they “can not only pay and get paid very quickly, in most cases instantly” but do so safely and securely.

“Don’t forget,” he noted, “anytime we’re able to add even a 1% increase for these clients in terms of authorization rates or approvals, it goes right to their bottom line. That’s what we’re seeing. So, it’s kind of a cost center to revenue accelerator.”

Numbers Talk

This newfound appreciation for payments beyond the numbers derives from basic math and an admiration for what the platforming of payments is helping merchants and brands achieve.

“The numbers drive it,” he said. “When you show with actual data that through offering various alternative payment methods, by offering real-time payments, by offering all of this, including your card transactions, including the back end and back-office reconciliation through a single platform, it’s very, very powerful.”

Good sales numbers tend to speak for themselves, and he said another convincer is “the data that we’re able to provide and take from the billions and billions of dollars that are processed through our system. And we’re always aligned with our merchants. If they’re not selling, it does us no good. We’re always trying to find ways to help increase their business as well.”

Even for problems like cart abandonment, platform payments are taking top-of-mind status because processing them — or not — reveals fixable issues faster.

Erlick said it surfaces conversations like “Why are people abandoning? What’s wrong? Is it the checkout experience? Are their payment pages optimized? Are they offering all the relevant — and the keyword there is relevant — payment options for their customers in that region?”

Nuvei is expanding into new geographies and in so doing, customizing payment preferences by region and culture, which was almost unheard of before the connected economy boom.

“If you’re not accepting PIX in Brazil, for example, and you’re just going in with regular credit cards, you’re going to have a pretty high decline rate or abandonment rate,” he said. “But being able to offer the relevant local payment methods all over the world through a single integration, that’s where I think we can provide some value and help them.”