Embedded CX: Getting the Customer Experience Right with Every Payment

Convenience, security, and efficiency are the driving forces behind consumer choices today. Consumers are conditioned to expect nothing less than top-tier experiences in all their interactions, and their financial transactions are no exception. Giants from adjacent industries – Amazon, Google, Apple — are deploying their unending resources to simplify consumer payments. Under the user-friendly interfaces lie an entire ecosystem of players— technology, regulatory bodies, businesses, banks, and fintechs, all working tirelessly to maintain the seamless ease in consumer experience.

The payments industry is actively responding to customer demands

• Digital wallets and contactless payments, projected to grow to USD 11.55 billion in 2024, are cutting through traditional banking delays. Consumers can tap their way through purchases, while merchants enjoy the ripple effects of quicker transactions and leaner cash management.
• From personalizing services to enhancing fraud detection and augmenting customer support teams, AI has had a big impact on finance. And now, with Generative AI, financial institutions are raising the bar in customer experience again.
• Open banking APIs are dismantling traditional data barriers, granting third-party apps the power to innovate directly with bank data. Customers can expect improved financial management tools while merchants gain access to new revenue streams and better customer insights.

Risk management as a catalyst for growth?

As we walk deeper into the "decoupled era" of the payments industry, payment service providers (PSPs) must step up in several areas. Regulatory compliance must be tighter than ever as global scrutiny intensifies. The stakes are high—fail here, and the financial penalties could be crippling, not to mention the damage to customer trust and company reputation.

Meanwhile, fraud tactics are growing in sophistication – after all, fraudsters have access to the same advanced technology and no constraints. PSPs are countering this threat with biometric identification, synthetic data generation, and real-time AI monitoring. This has even given rise to a new business model, RaaS (Risk-as-a-service), with a market value of $10 billion. Any of these external or internal disruptions is estimated to wipe out at least a million dollars half the time. Clearly, it’s time the PSPs look closer at their operations – processes, and dependencies – to ensure resilience.

Open banking opens up new revenue streams

The Consumer Financial Protection Bureau (CFPB) is pushing for regulations that would allow third-party access to financial data stored by banks. This initiative could enhance financial services, offering deeper insights for banks and potentially lower costs for consumers. Merchants are on board too, as these transactions are cost-effective, irreversible, and more secure. Despite the clear benefits, the resistance remains high — McKinsey predicts that even in 2027, 90% of the US transactions are likely to be card-based. Why? Consumer awareness remains low, entering bank credentials creates friction at checkout, and moving away from card networks means losing certain fraud protections highly valued by consumers. Merchants and banks are reworking their value proposition, like passing on cost efficiencies to the consumers, to make the switch attractive.

With all the changes sweeping through fintech, there's one constant that remains the best bet for stellar CX: the contact center. It is where the rubber meets the road for customer experience (CX). Especially in the payments industry, this might be the only human interaction your customers have.?

Cashing in great customer experiences

For fintech leaders, long-term success is tightly linked to how well they surpass customer expectations in service, support, and personalization. While self-service options and conversational chatbots are a good starting point, a truly effective CX strategy must anticipate when customers might need more personalized human interaction. Contact center technology must identify when a conversation is turning critical, allowing a timely handoff to a human representative. This switch can make all the difference, turning a complex situation into a customer success story.

While many understand how important customer experience (CX) is, executing it effectively, especially as the business scales, is an entirely new challenge. A smart strategy for fintechs is to collaborate with a CX specialist earlier than they think necessary.

Credit: *Sources

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