The Butterfly Effect of Payments: How Payment Technology Influences Customer Experience

Modulr By Modulr on 11 May 2021   •   6 mins read
<span id="hs_cos_wrapper_name" class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_text" style="" data-hs-cos-general-type="meta_field" data-hs-cos-type="text" >The Butterfly Effect of Payments: How Payment Technology Influences Customer Experience</span>

Did you know that, according to PwC, 77% of global CEOs say their primary focus to drive revenue growth is to create operational efficiencies?

The growth of new technology and automation means organisations, including those providing financial services, can now run more efficiently than ever before. In the coming year (and beyond), innovation and customer journeys will be at the forefront of payments transformation. 

We recently discussed how payment inefficiencies cost laggards millions in hidden expenses. This blog explores what we call ‘the butterfly effect of payments’. 

There is a direct correlation between backend inefficiencies and poor customer experiences at the front. Businesses that recognise the metamorphic potential of payments and optimise them for maximum effect will have the ultimate advantage in today’s demanding business climate. 


Providing a High-class Customer Experience in the Instant Economy

The rise of fintech has transformed the way companies provide financial services for good. We live in an Instant Economy where customers expect high technology standards and real-time results from their providers. 

Customer experience is the new battlefield, where traditional financial institutions and market challengers like ‘neobanks’ compete for the audience’s attention. With new innovations constantly entering the market, customers also have more options than ever. So it’s not entirely surprising that 76% claim it’s easier than ever to take their business elsewhere.

Companies who don’t invest in a valuable service offering run the risk of lowering their customer retention –– especially when it comes to payments.

In the Instant Economy, customers expect flexible and fast payment solutions. The competition is fierce. Integrated payments should be at the forefront of your customer experience strategy if you aim to stand out from other brands. 

Want to read the full report?  Leaders vs Laggards: Fast-tracking financial technology innovation in a legacy  ecosystem  Featuring interviews and surveys with 280+ Chief Executives and industry  leaders.  View here →

The Link Between Payment Technology and Customer Experience

Payment processing has gone from a dull, back-office business operation to the epicentre of the digital revolution in just a few years. Small internal changes can have an exponential impact on the external part of your business. 

The butterfly effect of payments applies to both positive and negative changes. For example, poor payment processes incur hard and hidden costs, impacting a company’s ability to provide a positive customer experience. On the flip side, implementing technology that streamlines payment processes empowers companies to serve their clients’ needs better.

Digitally demanding customers expect transformative principles to permeate entire business functions. So delaying payments transformation is an increasingly dangerous strategy that risks unsatisfactory customer experiences and compromised brand credibility.

Thanks to advancing technology, companies can now automate many of their back end processes. By eliminating internal inefficiencies that waste time and money, you have the power to transform your services into something customers want. 

A good example of a butterfly effect of payments at work is batch-processing Faster Payments. A payments professional from an alternative banking provider told us of the switch they'd made from batch processing Faster Payments every four hours with their previous payments partner. The uncertainty customers faced when they were not immediately notified the payment had been received caused them to chase customer support, harming their brand but also costing their customer support team time and resource. By moving to single immediate Faster Payments, they were able to serve up webhook notifications instantly which solved the problem outright.

To identify further butterfly effects at your organisation, you can use our Payments Map to analyse the current state of your operations.


How Integrated Payment Solutions Benefit Your Customers

Upgrading your payment processes has several benefits for your whole business cycle as well. We’ve listed the main advantages below.


Streamlines operations

Automating your payment flows, including receivables, payables, disbursement and collections, maximises efficiency for your teams and clients. One significant benefit of an integrated payment solution is its ability to streamline basic processes like transferring funds or managing accounts. Implementing this technology allows you to bypass the time-consuming process of manually entering and reconciling transaction data. 


Increases security

Integrated payment systems use tokenisation and end-to-end encryption to protect your and your customers’ data. Value-added features like Confirmation of Payee contribute to a higher standard of payment assurance and better visibility into your business operations.

Modulr is FCA-regulated as an Electronic Money Institution and is empowered to provide a regulated service on an agency basis, saving you from dealing with your own licensing and compliance complexity.


Reduces human error

Where there are humans, there will be errors. Automating your payment systems will eliminate the risk of human error incidents like duplicated or incorrect data entries. Integrated payment solutions eradicate error-prone batch files and process transactions without manual intervention. 

Human error also accounts for 95% of cybersecurity breaches. So automation software gives you a higher chance of keeping hackers and viruses out of your database.


Lowers operational costs

Integrating your payment processing into your business operations helps you reduce some of the hard costs surrounding manual systems. Using a straightforward payment system reduces costs and time spent training your staff how to use it. 

Leaders in the CX race know that their customer-facing experience says a lot about their internal-facing operations. Only by shoring up internal efficiency is it possible to wield the butterfly effect of payments and reap the transformative customer experience benefits.


5 Ways Companies Can Streamline Their Payment Services

Our last blog explored the actions organisations, including those providing financial services, can take to enhance operational efficiency and provide a more enjoyable experience for their customers. Below is a quick summary:

    1. Identify hidden inefficiencies: outdated payment processes come with hidden costs that damage your customer experience. Eliminating them will improve your service value.
    2. Consider every stakeholder experience: the genuinely effective payment innovations will benefit your customers, employees, and supply chain partners alike.
    3. Integrate systems that support payment innovation: create a foundation that maximises the opportunities of different financial models.
    4. Bring senior leaders together: combining different perspectives helps you uncover the most effective payment solution for your business.
    5. Add payments innovation to vertical services: embed cutting-edge payment technology into vertical services like lending or property to create a unique customer experience. 

To maximise your return on investment, start by examining your internal operations to see which systems are ripe for improvement. You should also assess your current customer journey to determine where you can improve the experience. 

We recommend speaking with your employees, clients and other stakeholders to get the inside scope on how well the whole business cycle runs. Then use that information to create a transformation strategy.


Improve Customer Experience with Cutting-Edge Payment Technology

Digital transformation has swept across all industries, and 86% of customers will pay more for a more high-quality experience. So your organisation must stay on top of your consumer-facing processes to increase brand loyalty. 

Harnessing the metamorphic potential of payments power doesn’t just mean speeding up the payments process. Companies also need to build a suite of innovative products on top of a real-time, responsive digital payments structure.

A flexible and scalable platform like Modulr can integrate into any business to eliminate process inefficiencies, ensuring your payments are secure and reliable. Create and administer e-money accounts, make payments, and automate the flow of money in your company, via a single integration.

Payments arrive in seconds to satisfy even the most impatient individual or company. Get real-time updates on your transactions simultaneously. 

Now is the time to automate your payment flows, maximise efficiency and reduce operational costs by putting payments at the heart of your platform, workflows and service.

From there, you can design a more thorough customer journey to deliver dynamic experiences that excite your clients and increase brand loyalty. 

Discover where you are in the leaders and laggards race in our next blog.


Streamline your Payment Services with Modulr

Take your payments to the next level with Modulr’s revolutionary API platform.

We empower our clients to create enticing customer experiences through real-time transactions and integrated payments systems that keep their money secure and flowing. 

Use our Payments Map to analyse the current state of your operations or contact us to transform your business today.