Does ONDC have the potential to fuel India’s...Feb 16,2023
Open Network Digital Commerce, commonly called ONDC can be a harbinger of a retail revolution in India which is currently valued at around $1...
Vice President – SMB Channel Partnership, Worldline
In the present scenario, the Direct to Customer (D2C) model has gained prominence with businesses focusing more on customer journeys. Since India is one of the fastest-growing markets for eCommerce businesses, a large-scale adoption of D2C is being witnessed which has unravelled a plethora of opportunities. The number of online buyers in the country are more than 100 million with 800+ brands operating on the D2C model. The number is projected to rise to over 3000 brands by 2025, bringing the total funding raised by D2C start-ups during 2014-2021 to $2.04 Billion.
Consumer behavioural change has led to the increased adoption of this model but the success of D2C is also dependent on a crucial factor i.e. digital payments. The rise of FinTech companies in India have laid a foundation and strengthened trust in online shopping. However, there is still enough room to innovate and provide a seamless payment experience to online shoppers. Here are some of the key factors which can be strategically optimised to translate into a better customer experience.
Rapid changes in digital technology have immensely transformed the payments industry. With a vast business model to support the existing, highly competitive market, it is imperative for any D2C brand to look for innovation, convenience, and faster payment solutions.
The digital payment landscape is booming with opportunities and the market players in the ecosystem have a set of responsibilities. The payment ecosystem consists of the customer, the merchant, the issuer, the acquirer, and the network provider who have all got a crucial role to play. There has been a paradigm shift from the traditional bank model to payment solutions by non-banking technological companies.
A successful payment platform is built on thoughtful planning and technology continues to be its key driving factor. Some of the key trends to look for in digital payments are contactless payments, innovation-led technology adoption, and creation of secure and fraud-proof payment systems. AI and Open Banking are two promising technological developments in the realm of payments. AI can be extensively used for process automation in customer service, optimised payment flows, real-time payments, and performing fraud checks.
In order to ensure sustainable growth for any D2C brand, a safe and seamless payment experience is critical. An unsatisfactory payment experience can result in higher customer attrition and drop-offs from the native platform. Around 70% of online shoppers with the intention of buying, abandon their carts during the checkout process. This is often linked to a lack of availability of their preferred mode of payment. When customers are unable to pay on the native D2C channel, they move to eCommerce marketplaces to buy the same product which results in revenue leakage as the D2C brands share their revenue with marketplaces.
This is the reason why addressing the payment gap and going omnichannel is extremely important for brands who are willing to take the D2C route to expand their business in both the domestic and global markets.
Since merchants are aware of the ease of starting an online store these days, the trust factor or loyalty is highly dependent on how well the brand handles the complexity around payments. The biggest roadblock that digital payments face is in the form of cyber-attacks like cyber thefts and frauds.
The mandate for any payments company is to ensure seamless and secure transactions for customers. Therefore, payment providers and banks need to make a conscious effort to build security on their payment platforms. For instance, end-to-end encryption is vital and consumers might end their journey before checking out if this feature has not been enabled by the sellers. So, having the right payments tech partner with enough bandwidth to accommodate large scale and volume is essential in the long run.
Furthermore, there’s also a need to ensure risk assessment and controls for fraud prevention. Worldline runs risk mitigation models in the backend to monitor suspicious activities from both the selling and the buying side. We take preventive and proactive measures to block such transactions too. It is certainly necessary to have a robust redressal mechanism and dispute resolution support to build trust amongst online shoppers.
Speed is the essence of the game. The new generation of consumers prefer the fastest means for anything and everything. Making things happen with the click of a button is the new trend and the latest innovations in payment will be a game changer for D2C brands in India.