Why enabling social media payments is essential for PSPs
Social media shopping is a growing international trend with a huge potential for commerce. This has only been exaggerated by the COVID-19 crisis, with one global study reporting an increase in social media engagement of 61% over normal usage rates. Thus, payment service providers (PSPs) and other financial institutions should support their clients with social media payments, as the Coronavirus shutdown forced the future of social shopping to arrive on a much, much faster timeline.
Firstly, PSPs need to offer a platform that can easily embed a payment method into social media posts. When customers see an item they like on a company’s feed they should be able to pay for it instantly, without having to navigate through the product pages of the merchant’s website, which inevitably results in far fewer dropouts. This also enables firms to capture larger numbers of casual, impulse buyers and a younger market, as the majority (58%) of 13-37-year-old consumers report being interested in purchasing items directly from social media feeds. Additionally, shoppers are able to share their purchases on their social media handles, which can boost companies’ future sales.
Payments must be smooth and quick
Retailers selling products with a strong visual appeal tend to be particularly successful on social media. But there is no reason why everyone, from artisan bakers to tool manufacturers, cannot succeed on social media channels as well. Regardless of the client's industry or background, PSPs must ensure that payments are smooth and quick, as tapping into social media audiences can be highly beneficial for everyone.
It is also essential to provide an option of alternative payment methods. For example, QR code payments and pay-by-link are convenient, engaging and popular with younger consumers. Additionally, ‘one-tap’ payments speed up the buying process for returning customers, as they do not have to fill out their details again, while simultaneously building customer loyalty. PSPs should expand their payment methods as they are relevant for ecommerce retailers, as well as being appealing to social media shoppers.
Mobile is a must
With so many people accessing social media on mobile devices, it is vital that payments platforms are compatible with these. Providing high-levels of security is also crucial, keeping in mind the evolution and rise in payments fraud. After all, one of the main reasons many shoppers are reluctant to pay via social media is the perceived ease with which hackers can access their personal details. Therefore, PSPs’ and banks’ checkout systems should make good use of security measures such as biometrics for authorisation and push notifications, warning banks when a payee’s name doesn’t match the account number. PSPs should also ensure that their platforms meet Level 1 PCI DSS and other data-security regulation requirements.
Overall, social media shopping provides many benefits to retailers, which is why PSPs need to provide a payments platform that provides the necessary features and supports social media sales.
Tink partners with Novalnet AG for open banking payments
The Munich-based fintech Novalnet AG, which was founded in 2007 and is one of Europe’s leadingfintech companies, has announced a new partnership with Tink, the Swedish open banking platform currently connected to more than 3,400 European banks.
Novalnet AG delivers payment solutions and fully automated services, from checkout to debt collection. Its solutions are also available worldwide.
According to reports, the fintech company plans to launch a real-time payments feature for merchants across Europe, to expand its current services and enhance the transaction experience it operates through its platform.
The new feature, says Novalnet, will revolutionise payments for ecommerce with transactions being credited to merchant’s accounts almost instantly.
Novalnet partnership with Tink
By partnering with Tink for payment initiation services (PIS) technology, Novalnet will take previous region-specific payment methods and offer a new unified digital payments service to its merchants across Europe.
The fintech’s real-time merchant payments feature, which will be launched initially in Germany and the United Kingdom, will then be integrated across other European markets during 2021.
Speaking about the new collaboration, Emmanuel Kirse, COO of Novalnet, explained, "We expect great things from our strategic partnership with Tink, which is a significant development for both parties.
“With Tink, Novalnet can offer a new set of open banking-related solutions in Europe. The new opportunities offered by this partnership will help both Tink and Novalnet grow together, along with our merchants."
Cyrosch Kalateh, Regional Director for the DACH region at Tink said, “Our partnership with Novalnet is a big step for Tink in the German market, and we are excited to work together to bring new, innovative payments services to merchants across Europe.”
He added, “At the end of 2020 Tink committed to expanding its payment initiation services from five to 10 markets, fuelled by an €85mn investment round. We are proud to add Germany to this list by announcing we have now fully launched Tink’s PIS services in this market.”
Image credit: Novalnet AG