Snowballing Sales: How FinTech Partnerships with Retailers Make Holiday Shopping Smoother

It’s fair to say retail has transformed in the past two decades, and fintech partnerships with retailers are playing an increasingly big role in this. E-commerce has taken over because of the ease it offers shoppers. Instead of having to travel to a shop, and contend with crowds and queues, you can quickly buy goods from the comfort of your home. In recent years, Amazon’s ‘fulfilment’ centres and intuitive use of robots and AI have turbocharged logistics around delivery and people now expect their goods to be delivered the next day. Retailers around the world are copying this model as people’s expectations have been changed, and everyone is trying to offer a stress-free holiday shopping that attracts – and crucially, retains – customers.

Fintech and retail collaboration is crucial to this, and partnerships between fintech platforms and e-commerce stores are continuing to remove friction from this user experience. Processing an order and getting an item in a customer’s hand is only one side of retail operations, and the need to flawlessly execute payments through ecommerce fintech integration is equally important. Customers are truly spoilt for choice for these days, and the last thing a retailer will want is for someone to be put off by an inefficient, tricky or outright faulty payment system!

How fintech is meeting customer needs

Top online retailers know what their customers want in terms of goods, prices and customer service. But customer demands will extend to payments as well, which necessitates having the right fintech solutions for retailers.

Last year, the British Retail Consortium carried out a major study into what shoppers want – and need – in terms of real-time payment processing from their favourite brands:

1. Speed is crucial. The majority of shoppers, or 60%, said a slow and frustrating experience at checkout would prompt them to shop elsewhere. Reducing data entry is a key part of this and 79% said they’d favour retailers that use cookies that remember card details, removing further friction.
2. Refunds need to be fast too. It isn’t just important to retailers to be able to quickly take payment, but return it too with 64% of online shoppers expecting refunds to happen within an hour of request. However, 59% of online merchants said this takes over a day to execute…
3. Alternative methods required… Shoppers will have preferred payment methods, but these are subject to change, and retailers must respond accordingly. The survey found 82% of UK shoppers prefer using debit cards online but 7 in 10 said they’d also be willing to try other services like PayPal.
4. …but not too many! At the same time, it’s important that retailers don’t offer too much choice in terms of payments. Nearly four in 10 shoppers said they’d feel overwhelmed by more than five payment options, with a further 18% admitting they’d be confused about the difference between these.

These are lessons that should not be ignored by online retailers and show how important it is to get fintech payment systems right.

Fintech partnerships with online retailers

With this being one of the busiest times in the year for shopping, retail fintech partnerships are continuing to play an increasingly bigger role. Seamless holiday purchases can be the difference between a great quarter and a bad one, with no room for error in such economically testing times.

This can be an exciting time for innovation given how much more people spend during the festive period. Klarna, an AI-powered payments network, has launched a UK card product available from a range of merchants including Argos, Fortnite, Adidas and IKEA – designed to allow shoppers to use the fintech’s Buy Now Pay Later (BNPL) offering. This integration between fintech and retailer allows for even more seamless holiday purchases.

Flexible payment options are indeed a huge part of festive shopping behaviour. A recent MoneyHub report found that retail credit users spend an average of £1,012.55 over the holidays with nearly three quarters - £759.71 – financed through retail credit. Micro credit and BNPL solutions for holiday shopping are a major part of fintech payment propositions, enabling consumers to spend with greater flexibility than they could with traditional financial services products.

Fintech partnerships are also allowing more retailers to engage with mobile payment adoption. Mobile has been a huge part of e-commerce, and with the right integration a retailer can have an app that interfaces effortlessly with online payment providers and digital wallets. In addition to contactless payments methods being faster and more convenient, they are also more secure, using advanced encryption to protect financial information. 

Additionally, as we’ve already written about in another blog, money management apps can be very helpful at this time of the year. Some retailers are partnering with fintech solutions that offer responsible and pragmatic ways for people to keep on top of their spending, delivering them insights as they shop and ensuring they don’t overspend. This can help keep Christmas shopping as stress-free as possible!

Fintech partnerships are allowing online retailers to stay ahead of changing consumer behaviour, at a time when it has never been harder to be a retailer. The innovation has taken many retailers into bold new directions, for the benefit of consumers as well, and it’ll be very interesting to see where this goes next.

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