Saturday, May 18, 2024

    EDITORIAL Is direct-from-bank-account payments about to rethink the ecommerce market?

    Ecommerce has grown rapidly during lockdown, with shops shut and consumers reaching for their mobiles to buy everything from food to little treats for themselves it is no wonder that global e-commerce sales hit £1.8 trillion in 2020.

    And this is a market ripe for telemedia to tap into. As more people have started to shop online – for both physical and digital goods – new ways of engaging them and monetising that engagement have emerged. Conversational commerce has been born.

    And Juniper Research predicts that it is set to doing $290bn globally by 2025, as more merchants get the hang of linking messaging and engagement with payments.

    That is, if only they could facilitate payment for physical goods.

    The trouble with the ecommerce market for telemedia companies has always been that DCB is not able to be used in most places in Europe to buy anything ‘real’. Across the lockdown, carrier billing has become a staple of the many digital services and it is recognised increasingly as the on-boarding payment tool du jour for everything from gaming to dating to education to mobility services.

    But what if the sector could tap into the ecommerce market?

    Well, pioneering work by DIMOCO is aiming to do just that: to bring the quick and easy nature of using DCB to be able to buy things from ecomm sites.

    The answer lies not in DCB, but in facilitating direct bank payments from ecommerce sites.

    Practically everyone in the EU has a bank account, therefore, a bank transfer is one of the most common payment methods available and outscores credit card penetration by far. Working with PSD2 technology company SignD, DIMOCO has formed what it calls a joint Payments Initiation Service Provider (PISP). This Open Banking PISP initiates and executes an instant payment transaction on behalf of an online merchant at an unparallel convenience and safety level for both online retailers and customers alike.

    PSD2 allows regulated PISP to initiate payments straight from customers’ bank accounts, enabling customers to make instant payments directly through the website they are currently using.

    The UX is unparalleled, says the company, with shoppers not only able to pay instantly via their bank account without leaving the online shops’ websites, the online merchant can also individually brand the payment option.

    The service is quick, slick and really low fraud risk, offers almost no chargebacks and is instant – with the money leaving the consumer’s account and instantly appearing in that of the merchant. It also is much cheaper for the merchant, with fees much lower thanks to there being fewer parties in the chain.

    And as we all know, slick flows unlock more sales. This is perhaps exactly what the ecommerce industry needs from a payment solution and could well be what delivers many more sales to telemedia companies.

    That aside, it also ahs the potential to radically reshape ecommerce. The lockdown has driven many more people to shop online, and many of these have had their first – and perhaps only – experience of doing so through mobile.

    We have already seen how that changes how brands, merchants and retailers reach out to consumers – the whole concept of RCS now hinges on the ability to make the messages shoppable and it is what is increasingly looking to attract everyone from WhatsApp to Facebook to Instagram to TikTok to start to make engagement directly monetizable.

    For digital goods and services – even quasi-digital things such as ticketing and travel – DCB does the trick and offers that quick, two-click flow that is needed to make things simple. But that isn’t possible in most regions for physical goods. A branded, single click, bank transfer-based payment tool however makes that very possible.

    This brings together the ability to reach out to consumers through OTT messaging and social media channels to engagement them where they are and to offer them they things your AI knows they want. And now they can pay for them there and then, with virtually no friction and with great confidence.

    Should this take off, the sector is, I suspect, about to be revolutionised and ecommerce is going to start to go places hitherto unimagined.

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