Education | June 10, 2024

How to Take a Customer-Centric Approach to Your Payment Solutions

For today’s consumers, the customer experience (CX) is king. More than half of customers say they’ll abandon a brand over a single bad experience and three-quarters will flee after multiple bad experiences, according to research conducted by Zendesk.

A customer-oriented payment solution is one key component of creating a seamless and convenient experience. And choosing the right solution offers benefits far beyond customer loyalty and retention. Here, we’ll discuss what it means to create a customer-centric payment experience, the many ways it can benefit your brand and strategies to innovate your payment solution to meet the expectations of customers today.

What do today’s customers expect from the payment experience?

Gone are the days when retailers offered a choice between debit, credit or cash. Today’s customers expect businesses to meet them where they are and allow them to pay how they want.

“Businesses need to offer more than cash and physical card payments,” says Christian Hansen,

Corporate Vice President, Director of Merchant Services at Northwest Bank. “You need to offer near field communication, which includes tap-to-pay, as well as accept payments via digital wallets and smart watches.”

These capabilities are especially important for businesses looking to attract younger shoppers. Gen Z, in particular, demands a seamless payment experience: Nearly four in 10 identify having to enter a PIN as a pain point during the payment experience, according to research from EY. Perhaps not surprisingly, they’re up to three times more likely than older generations to use alternative payment methods like contactless payments.

Customers also want choices for where to shop and where to pay, he explains. Mobile and e-commerce capabilities are a must for customers who prefer to shop online — or shop online but pick up in-store.

B2B payments have undergone their own digital transformation and the payment experience is increasingly important for B2B customers as well. Physical check volume continues to decline each year while digital payments are quickly growing.

“Within digital payments, B2B customers are looking to pay more invoices with cards today when possible,” says Hansen. “This allows clients to take advantage of term discounts for paying early and getting paid quickly will also strengthen your cash flow.”

Creating a customer-centric experience requires a modern payment solution

As customer demands continue to evolve, they raise the stakes for merchants to adopt a payment processing solution that can evolve along with them.

“While a legacy card terminal will still process a transaction like always, that’s all it is capable of doing,” says Hansen. “To promote a modern, convenient and robust payments experience, a business should consider a 'smart' credit card terminal which allows for all payment types, but also offers greater functionality.”

A 'smart' credit card terminal allows you to build customer loyalty with rewards programs, as well as seamlessly deploy promotions to attract shoppers. It can also prompt customers for tips, deliver receipts via text or email and capture contact information for future promotions and marketing.

The right payment processing solution can become a home base for your business

While a customer-centric payment solution has obvious benefits for enhancing the customer experience, it can also help you manage your business. “Today, it’s about more than receiving payments. A holistic solution offers several back-end functions and integrations to help you save time and run your business more smoothly,” says Hansen.

A holistic payment solution offers inventory management options, for example, so you can easily manage your stock across multiple channels, including e-commerce. It can also integrate with your payroll and accounting technologies, creating a “one-stop shop” to manage your talent as well as your finances. And ultimately, it can provide real-time insights and reporting into your company’s performance to help you set goals and create forecasts.

“We constantly hear about data-driven decisions in today’s markets,” says Hansen. “The data that holistic payments solutions offer today allow a business to make educated decisions to set them up for success.”

In addition, many systems offer solutions that address industry-specific pain points. For example, the right payment solution allows restaurants to quickly adjust floor plans, modify menu items and update pricing to accommodate seasonal changes, Hansen says. It can also help service and healthcare businesses collect payment at time-of-service, which is something they often struggle with.

Additionally, today’s solutions allow for electronic invoicing with secure, integrated payment links and keeping customers’ payment information on file to set up payment plans, he explains.

How to find the right payment solution for your business

Consider these important elements to assess your needs and find the right fit.

1. Identify your pain points

Assessing the range of payment solutions on the market can feel overwhelming, so start with an honest look at your most pressing pain points. Consider which problems are having the largest impact on your business and the functions you need to address them. From there, create a list of “must-have” features to guide your search.

2. Choose an approach

When it comes to selecting a payment solution, you have two general options: The “starter pack” approach, which is an end-to-end solution that offers all of the functionality you need, and a “mix and match” approach that lets you customize a solution using third-party integrations.

Both approaches have advantages: the “starter pack” supports a streamlined rollout to help you hit the ground running with some potential trade-offs on customizability, while the “mix and match” approach allows for maximum customization at the expense of technical complexity. Consider your goals, timeline and technical expertise when choosing the right approach for you.

3. Get support from your bank

Selecting a new payment processing solution is a big decision — and it’s not one you need to make alone. A bank that offers merchant services solutions can answer questions, help you make sense of the solutions available to you and help you fit a payment solution upgrade into your larger business strategy and financial plan.

“Many businesses today may still view banks from a traditional loan and deposit perspective, but we’re here to have a holistic conversation about your financial future — including how the right payment solution can help you reach your goals,” Hansen says.

If you’re considering an upgrade to your payment processing solution — or you’d like to have a conversation about your company’s goals — Northwest’s dedicated team of small business banking experts are here to help.

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