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GUEST COMMENT From channel to customer: humanising payments

Image: Fotolia

Image: Fotolia

The payments landscape looks far different than it did five years ago, and it will likely undergo even more rapid changes in the next five. We are moving further into the digital age where a large portion of consumers include Gen Z, or those born after 1996. This group is predicted to make up 35 per cent of the global workforce by 2020. and shops far differently than previous demographics.

Born into the digital age and experiencing the rise of the gig economy and on-demand retail, Gen Z consumers seek instant and seamless online shopping experiences. They have grown up in the digital revolution and because of this, demands superior experiences through technology as it’s all they have ever known.

The payments industry needs to follow the lead of other sectors to innovate solutions that meets the needs of a changing consumer base. How Uber revolutionised ride services and the rise of direct to consumer brands cutting out third-party middleman is a great example. Payments must look to chart a similar path.

Gen Z consumers are looking for instant gratification in their purchases. If they see an interesting pair of shoes or handbag on the street, they can pull out their phone and order them in real-time. Our payments infrastructure must make this a viable process on every corner of the globe. A consumer in Belgium should be able to order goods in Australia instantly by the payment preference of their choice.

Innovations in payments must derive from the needs of the consumer

How can we best mirror our services to fit the changing needs of a growing, global consumer base? One way is to focus on the consumer throughout the entire payment process. Almost 50% of consumers will end a transaction if their preferred payment method is not available, so being able to meet the needs of the consumer is vital.

These needs vary from region to region, which means offering a cookie-cutter solution will not work when selling in separate countries. For example, in Asia, the preferred payment methods are mobile e-wallets making up 40% of online transactions. While in North America, credit cards are preferred at 57% of all online transactions.


Reaching Asian consumers means offering more mobile-focused payment methods. In China, there is a 56% smartphone penetration and 80% of the population is banked. In this case, cash and card payments are not effective ways to target these consumers. Ideal payment methods to reach consumers in this region are mobile wallets like Alipay and WeChat Pay. Offering these payment methods will lead to more success and usage. A young, growing middle class is largely developing in Asia, so it is imperative to take these needs into consideration. 

However, not every region pays the same. For this reason, it’s not opportune to take an approach in one region and duplicate it across others. For example, Mexico is heavily reliant on cash, making up 26% of its online transactions. The country also has a low banked population at 37%, compared to the global average of 68%. Online merchants looking to sell cross-border to Mexican consumers need to consider these needs when crafting solutions to avoid forcing different payment solutions in hopes those become adopted.


Steve Villegas is FinTech and Partnerships Leader at PPRO

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