Customer Journey 2.0: Delivering dynamic customer experiences with digital payment processes

Customer Journey 2.0: Delivering dynamic customer experiences with digital payment processes

Payment processing has gone from a boring, back-office business operation to the epicentre of the digital revolution in just a few years. Digitally demanding customers now expect transformative principles to permeate entire business functions. 

According to the 2020 The Global State of Customer Experience report, 68% of global senior customer experience experts strongly believe that expectations from customers are rising.

Achieving the radical but necessary reform required doesn’t just depend on speeding up the payments process, but also building a suite of innovative products on top of a real-time, responsive digital payments structure.

In order to do that effectively, it’s essential to first understand how the demands of the Instant Economy are impacting the world of payments processing. 

From there, it’s possible to design a more thorough customer journey that can deliver dynamic experiences, anchored by a set of core principles we’ve called the ‘Customer Journey 2.0’.

How to Design Your Customer Journey: 2.0

Mapping a Customer Journey 2.0 involves the following five steps:

1. Identify the traditional customer journey

2. Detail the movement of customer data and money

3. Use digital tools to analyse the effectiveness of current strategies

4. Identify quick wins and act on them rapidly

5. Continually refine the process.

But how do digital tools help to drive impact and uncover inefficiencies?

Digitally demanding customers and the need for efficient payment processing

Before the arrival of the smartphone, payment processing was slow and inaccurate. It was accepted as an unfortunate fact that most funds took an indeterminable amount of time to clear. Estimates of when funds would be available were vague at best.

But over the past decade, challenger brands - in many industries - have become market leaders by providing immediate services with maximum convenience. The rapid increase in the number of services has trained consumers to expect higher standards and real-time results across all sectors, resulting in the creation of the ‘Instant Economy’.

Without essential innovation in payment systems, companies of all sizes will continue to lose their customers to competitors that prioritise customer experience above all else.

The challenges posed by the Instant Economy

To meet the evolving expectations of the Instant Economy, companies across sectors need to be equipped with the tools and knowledge to route out the hidden inefficiencies that hold them back.

However, crafting frictionless experiences in payments can be a daunting task. 

So, how much of a threat does payment friction really pose to companies, and what can be done to improve customer experiences in payments? 

How much does payment friction cost companies?

In a recent report, Modulr found that on average, smaller companies spent almost £1m annually on their back office processes. For larger companies (more than 250 employees) that figure rose to £2.1m. Worryingly, the most cited contributor to those costs were hours spent on manual processes.

Modern innovations in payment systems can rapidly minimise these costs. By focusing on the tenets of the Instant Economy (actively routing out inefficiencies and making incremental changes) payments can be structurally streamlined. Companies that take this approach can then create competitive experiences that are consistent with the expectations of digitally demanding customers.

The best companies are doing this successfully by implementing a systematic process we’re calling the: ‘Customer Journey 2.0’.

How digital tools like Modulr help

There are three main areas in which digital payment processing platforms can help to build better customer experiences:

1. Automating payments

This helps reduce the dependency on manual processes, which as we mentioned earlier is the most commonly cited culprit of back office costs.

2. Embedding payments

This feature enables payments technology and access to rails to be integrated within other software, without the need to mention the name of the payment provider and presenting an in-brand experience for the customer. For example, it’s now possible for accounting software to link up their wealth of payroll, accounting and tax services automatically with payments and accounts. Payment data (both inbound and outbound) can be updated directly from within the accounting software. It could see the likes of QuickBooks challenging established highstreet business banks for SMEs’ financial needs.

3. Building new financial service offerings

Companies can now build innovative brand new services within their own ecosystems, opening up a vast range of fresh possibilities and revenue streams. Businesses that would not have provided bespoke-to-sector financial services can do so with modern technology, if they partner with the right provider of an instant payment system.

There are other critical things to consider when designing a new customer experience for the digital age.

The butterfly effect of payments

In digital payment processing, slight changes to the backend of a website can have dramatic effects. We call this the ‘butterfly effect of payments’.

This effect applies to both positive and negative changes, building on company research to identify direct links between tech processes and the front end customer experience.

It’s also vital to design a straight-through customer experience if your company aims to consistently deliver competitive services in the Instant Economy.

What is a straight-through customer experience?

Broadly speaking, a straight-through customer experience refers to the creation of a unified payment process throughout a tech stack. 

It builds on the proven success of straight-through processing (STP), which automated processes and reduced human error so well in the 1970s that the practice became the golden standard for the payments industry.

By applying the same philosophy to customer experience, manual intervention can be minimised and costly human error reduced. 

It’s also crucial to develop an awareness of internal hurdles that might prevent you from delivering the best front end experience for customers.

Identifying your silos

To deliver on the promise of the Instant Economy, different departments should work collaboratively across functions to reach a common goal.

However, the level of collaboration across departments varies from company to company. It’s essential to be aware of the internal challenges your organisation faces. 

You can then explore which areas are quick wins, where new products with a fully functional payment system can be launched rapidly. 

A partner in instant payments will then be able to help you provide early impact in the most efficient way for your business.

Instant payments: The root of digital transformation

Companies that are committed to developing the best customer experience possible will need more than a well-designed website. Organisations that successfully integrate new payment capabilities, while striving to improve customer service, stand to benefit from the limitless opportunities of the digital economy.

It all starts with making the right changes, right now.

Design your Customer Experience 2.0 with Modulr

Transform your digital payments processing with Modulr.

We provide a robust, scalable infrastructure that allows you to process high volumes of transactions and rapidly deploy new products and services. 

Register for a free Payments Map Analysis today or speak to one of our experts to find out more.