Unless you’ve been living on another planet, you must have heard about on-demand businesses or the sharing economy. We are now living in the era of accessibility brought on by increasing internet penetration and mobile usage. Simply put, sharing economy business model is where technology is used to create digital marketplaces and platforms that connect us to whatever we need. People expect simplicity, ease and convenience in every single life-transaction, be it home-delivered groceries, finding a plumber or something as simple as hailing a cab. The sharing economy has changed the world we live in.
Over the last decade thousands of sharing economy businesses have popped up, but only a few have been staggeringly successful. Some of the most disruptive and successful on-demand businesses have a few things in common – A unique idea, innovative use of technology and in many cases a different approach to payments!
Payments: Could it be the ingredient X?
Payments as a business strategy: Why is it that a certain business model is accepted while the others fail to make a dent in consumer conscience? The answer lies in providing what the consumer wants and as we see from some of the well-known examples, how people pay, could be an important factor.
Uber and mobile payments
In 2009, mobile payments were still in the nascent stage, but mobile usage was increasing. Uber grabbed attention of their tech-savvy customers by creating an unbeatable mobile user experience combining car tracking with maps and in-built payment functionality. No more waving hands to catch the attention of a cabbie, no more worrying about exact change. The ride and the payment happened at a click of a button making Uber the biggest success story for the sharing economy business model. There are a lot of factors that helped Uber become what it is now, but the ease of payments played a crucial role.
Flipkart and local payment behaviour
India’s online marketplace Flipkart recently bought over by Walmart, managed to get a nation of over a billion users hooked on online shopping. In 2007, online shopping was unheard of in India as a major part of the population did not trust credit cards and online payments. Flipkart entered the market with a local approach to payments with Cash on Delivery and completely upturned the market. Flipkart has been instrumental in changing the behaviour of a nation and pushing an entire generation to eventually start using online payments. Today digital payments in India amount to US$64,775m in 2019 with a 26% YOY growth, and it is safe to say that Flipkart started this trend.
Wagamama: Walk out and Pay
Pan-Asian restaurant chain Wagamama recently launched an app called Wagamamago. The whole marketing strategy for the app is ‘Walk out and Pay’. Taking convenience to the next level, this app allows customers to order from the phone, enjoy a meal and walk out. The payment is invisible to the user and it happens behind the scene in the app. Payments are seamlessly integrated within the product be it the small charge to hold the table, settling bills for meals and take-outs or even splitting the fare with friends. The product design revolves around the payment experience.
We may be biased as payments is our domain, but there is no denying the fact that the way your customers pay has a crucial role in not only your business strategy but in your business success. The experience you provide on the checkout page, the payment methods you display and the payment method mix you offer are already pre-requisite for your payment strategy.
Will the future bring a payment-first business model?
Mobile-first commerce is no longer a buzz word and we are aware that nowadays more and more business models are designed to be mobile-first. But think about it, the payment step is where business happens. It is far-fetched to image a payment-first business model?
Businesses are realizing the importance of payments in the business strategy. Where a few years ago payments were handled by either the accounting or operations teams, businesses now have dedicated payment departments to manage this crucial aspect of the business. Our whitepaper “7 Key Habits of Successful New Payment Managers” shares insights from payment managers of leading organisations and throws light on the changing role of payment in business decisions.
Payment-first model is not a reality today, but the examples we see around give us enough indication that it could be a real possibility in the future.
But until then, you can get in touch for all thing’s payments.