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Why we want to make ‘payment’ less complicated

People tend to make things complicated. But sometimes the simplest solution is the best and that's why we want to uncomplicate payment.

by Maik Klotz, 2022-04-07
3 min

When I was a child, there was a small corner shop in our village. Everyone knew everyone else, which led to purchases often being put on the slate. The shopkeeper wrote the customer’s name and the value of the goods in a little book and the bill was settled at the end of the month. It was essentially the BNPL (buy now, pay later) scheme of the pre-Internet era. BNPL is now among the important concepts driving payment transactions. Who would ever have thought that putting goods ‘on the slate’ would one day be celebrated as an innovation?

Payment – a luxury problem

While 25 years ago people had to think about drawing out enough cash from the local bank or the ATM around the corner, today’s consumers have a luxury problem: there is not just one way to pay in-store or online, but a number of different ways. Besides payment in cash, consumers can pay using girocard, Mastercard, Visa, Amex, Apple Pay, Google Pay, Samsung Pay, PAYBACK PAY and sometimes even the merchant’s own app. To put it briefly, there is the girocard and credit (or debit) card, app-based payment methods such as PAYBACK PAY or payment via dedicated merchant apps and mobile payment via Google, Apple and Samsung Pay. In other words, there’s no lack of options! However, the maxim ‘more is always better’ is actually a fallacy and a well-intentioned concept is unfortunately not always well implemented. The problem that all of these methods more or less have in common is the human factor. People want to shop, but they don’t want to pay. This doesn’t mean that people don’t want to spend money, but rather they prefer not to think about how to pay for the goods. In the best-case scenario the actual payment process is a completely neutral process, in the worst case people get annoyed because it takes so long or there are technical hurdles.

Can’t get any more complicated than that? You bet it can!

While the girocard and credit card work for contactless transactions, both cards can also be inserted into the terminal using the chip and PIN system. Depending on the setting, the PIN is then required to make contactless payments for amounts over 50 euros, while with chip and PIN it is needed immediately. A signature is sometimes also required. App-based payment methods work differently. A QR code or barcode is generated, which is then scanned by the checkout or vice versa. Either way, the user has to open the app, log in and manually start the payment process. Mobile payment using Google and Apple Pay works differently again. Here it is sufficient to hold the smartphone to the terminal and unlock it. The payment process is then essentially biometric and PIN entry at the terminal is not necessary because authentication has been performed on the smartphone. It is therefore hardly surprising when the odd consumer is somewhat overwhelmed by it all.

Paymenttools: eliminating complexity

Admittedly, we are not seeing desperate consumers curling up in a foetal position by the cash desk out of fear of not knowing how to pay. And the payment complexity described here does not require a degree in rocket science. We know from qualitative user research that it is nonetheless annoying and that is motivation enough for us to do something about it.

At Paymenttools, we are convinced that the actual payment process, whether in-store or online, is a hygiene factor and should be as invisible as possible. Our mission is to simplify payment transactions and ultimately eliminate complexity – for consumers and our merchants. We achieve this by working with our merchants to offer the ideal mix of payment methods for consumers and ensure all transactions are processed smoothly. Even though it may still be a long way off, we want to make payment even smoother, even more invisible and even more inconspicuous in order to give our merchants’ consumers and customers an optimal shopping experience. Just like in the corner shop all those years ago. As if that weren’t enough, we are focusing on ways of offering merchants services that can help their businesses to flourish. Incidentally, ‘we’ refers to the team at Paymenttools. #wesolvepayn

Maik Klotz is a consultant, speaker and author specializing in banking, payment, digital identity, e-commerce and retail. He was profiled by the Süddeutsche Zeitung in the industry's "Influencer" series and moderates and speaks at many industry events. Maik is co-founder of Payment & Banking.

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