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The payment experience must be as seamless as possible: “Those who crack the code and make it simple for the consumer win”

Although payment is only a small part of the buying experience, it needs to be quick and smooth if the company doesn’t want to lose customers. That’s the problem more and more fintech companies are trying to solve – and it’s only making companies sharper and the customer experience better.

Today, there is a wealth of Danish fintech companies that deal with payments in one way or another. What they have in common is that they are on a mission to make the payments experience as fast, easy and seamless as possible. Because if payments go wrong, the company risks losing customers.

“We find that how a company chooses to bill its customers has a huge impact on sales, and therefore financial performance. Those who crack the code and make it simple for the consumer win,” says Tomas Lykke, senior partner at consultancy Hildebrandt & Brandi, which among other things deals with commercial success in companies.

In 2020, Hildebrandt & Brandi conducted a study on payments at subscription companies. Among other things, it concluded that payment was the point in the customer journey where there was absolutely the most contact with the company.

“When a company has a contact point with a customer around payment, you really have to be on your toes, because this is also where there is a high risk of the customer leaving the company, for example if the customer does not understand the bill, is charged an unexpected fee or receives a reminder,” says Tomas Lykke.

Hildebrandt & Brandi’s study also looks at which payment methods best retain customers. Here, bills signed up for payment services perform best, while MobilePay, card payments and giro cards take second, third and fourth place respectively.

“Payment services keep customers for the longest time because customers have the payment linked to their bank and it’s not something you just change. For card payments, customer churn is 50% higher compared to Payment Service, and this is because there is more uncertainty around this form of payment, for example if the card expires,” says Tomas Lykke.

Competition creates innovation

In recent years, more and more payment companies have sprung up in the Danish fintech landscape. And the competition between companies can ultimately benefit both the companies themselves and consumers, says Jonas Hedman, a professor at Copenhagen Business School specialising in payments and digital transformation.

“Overall, the service for consumers will improve because the old, traditional payment providers and the new fintech companies will push each other to innovate and thus improve,” says Jonas Hedman.

He adds that from a consumer perspective, however, it would be nice if over time webshops switched to using the same solutions, so consumers only have to deal with one way of paying.

Nevertheless, the variety of payment solutions is positive for webshops, as they can choose from a wide range of different features, such as integration with accounting software. The most important thing, however, is that the webshop understands the customer’s payment needs.

“As a webshop, you need to understand your target audience’s preferred way of paying. Historically, Danes have been happy to pay by Dankort, while Swedes prefer to pay by invoice and Germans prefer to avoid digital payment methods. You risk losing customers if you expand into a new market without first understanding your customers’ needs,” says Jonas Hedman.

Greater order value at Swiipe

One of the fintech companies currently pushing the boundaries of what a payments company can and should do is Swiipe. In the summer of 2021, the company added the ‘Plus-sell’ feature to its product range, which lets customers add new items to the order on the receipt side.

Now, however, Swiipe has added another dimension to the feature through a partnership with recommendation engine Hello Retail.

“Relevant products must appear on the receipt page before the customer will add them to their order. And this is where Hello Retail’s core competence lies. They know which products are relevant to present to the customer. So if the customer has bought a bike, they might be presented with bike lights or brake pads,” says Anders Riis, CEO and founder of Swiipe.

Since the cooperation with Hello Retail was signed in autumn 2021, 15 webshops have tested the new feature. According to Anders Riis, the order value increases by nine percent to over 200 percent on orders where the customer adds items on the receipt page.

“We are getting continuous feedback from the webshops, so we are not done at all with fine-tuning the feature and making it even better. At the same time, it’s also a new feature for consumers, so they also need to get used to the fact that it’s now an option,” says Anders Riis.

Fact box: How Danes pay online

  • The small plastic card is the Danes’ favourite when it comes to paying online. In 2021, 55% of all online transactions were made with a payment card
  • However, mobile payments, such as MobilePay, are gaining ground. Last year, almost a third of all online payments were made via mobile. In 2017, that figure was just 6%
  • PayPal and online banking payments will each account for 4% of online payments in 2021
  • Among global players, merchants prefer to use Stripe and Exactly to accept payments.

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