Payment Pulse – Ep. 6

Payment Pulse: The Power of Social Proof: Learn how influencer endorsements, online reviews, and peer behavior shape our buying habits.

Status Spending and Luxury Psychology: Understand why consumers use high-end payment methods to signal prestige and how brands capitalize on the “Keeping up with the Joneses” mentality.

FOMO and Impulse Purchases: Explore the role of limited-time offers and BNPL services in reducing purchase friction and triggering rapid spending.

Digital Trends on Social Media: See how platforms like Instagram, TikTok, and YouTube are revolutionizing product discovery and checkout experiences.

Cultural Influences on Spending: Discover how global payment preferences vary and why adapting to local norms is key for businesses expanding into new markets.

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Episode Transcript

Steve: Payment Pulse, a podcast by Clearent by Xplor, a leading full-service payments provider. Welcome to Payment Pulse, a podcast by Clearent by Xplor where our goal is to humanize and simplify the complex world of payments. I’m Steve and as always, I’m here with my co-host Max. I don’t know what’s going on today, but you have a new background. 

I’m not wearing a hat. Why is that important? Well, it’s not important, but it’s just a shameless plug for you to go and listen to our previous episodes for you to understand the inside stories that we have going on here. But how are we doing today Max?  

Max: Yeah, not bad. I’m in a new spot, still in beautiful San Francisco, but yeah. Doing well, man. How’s Philly treating you? 

Steve: It’s good, it’s good. A lot of background noise going on here today, so hopefully it doesn’t interrupt us too much. But with that said, let’s jump right into it. So today, episode six, we’re turning our attention to a topic at the heart of commerce, the dynamic relationship between merchants and consumers, and how payments and payment technology serve as a critical bridge between them. 

Today we’re gonna explore these innovations, not only how they streamline transactions, but also build trust, drive loyalty, and enhance customer engagement. Max, can you start out by just kinda giving the listeners some data points that highlight the important role that payments play in consumer and merchant relationships? 

Max: Yeah, absolutely, Steve. So recent data shows that there’s a really pivotal role that payments play in the relationship between merchants and consumers. According to Discover’s 2024 Payment State of the Union Report, 85% of consumers say a negative payment experience makes them less likely to interact with a business in the future. 

It’s pretty staggering, just think that 85% of customers will go in and make a decision and it’s very much weighted by the payment technology. On the merchant side, 59% believe that payments are a critical aspect to the overall customer experience. So, these numbers don’t lie, and it highlights that a seamless payment process isn’t just a convenience, it’s a competitive differentiator. A consumer preference for sure and confidence builder for sure.  

Steve: Alright, well thanks for listening to Payment Pulse. That’s today’s episode. Just kidding. But you know, those data points really do speak volume and so, keep in mind, we’re referring to more than just the exchanging of money for goods and services. 

It’s about creating a smooth, reliable experience that builds long-term trust. Think about your personal experiences as a consumer or a business owner. For me, I think about e-commerce transactions and there’s really nothing more frustrating than a wonky e-commerce checkout. Among other things, but that’s just what comes to mind for me. I might just be conditioned now with one click commerce checkouts, where it’s really fast, really seamless. I don’t have to enter in all my information. But that’s why it’s really important for businesses to prioritize the payments flow and consistently be thinking of what they can enhance within the experience to keep up with the competition or better yet exceed them. 

Max: You know, Steve, It’s a great example and the reason it’s a great example is that there’s so much research that backs up, why this is a competitive advantage. Research shows that 53% of merchants say offering a variety of digital payment options is their top strategy for driving conversions and consumers agree. I think over 60% say that being able to pay using their preferred payment method is really a significant factor in completing a purchase. So, using e-commerce checkout and being able to pay for something online rather than having to go into store is a massive differentiator when you’re paying for something. 

Similarly, if you’re in a store and you’re like, hey, I wanna pay with my phone, rather than just being able to pay with cash or with your credit card in hand. It’s huge. So it really doubles down on this fact that tailoring payment solutions to customer preferences isn’t just like a nice to have, it’s a must have, so huge for customer relationships.  

Steve: Yeah, and I mean it doesn’t stop there, right? Let’s think about mobile technology for a second. Over 90% of merchants see tap to pay on mobile devices as a key value driver over the next three years. With 61% valuing the ability to accept payments nearly anywhere, and 56% emphasizing the importance of a personalized sales experience, mobile payment solutions are clearly becoming a cornerstone for the modern consumer experience. 

Max: And the thing is that at the end of the day, you’re not just a merchant out there, you’re listening to this podcast, think of it this way. What we’re trying to tell you is that your neighbor, the merchants that are coming up or down the street from you or a competitor of yours down the road, they might kind of first laugh or scoff at them taking on these new technologies because you’re like, oh, they’re trying to be disruptive or they’re thinking they’re super tech enabled, but, no, they’re just trying to get ahead, they’re trying to differentiate themselves even if it’s at the margins. 

It’s not just a convenience factor. Payment technology really does help merchants gather the critical insights they need around their consumers. Whether it’s analyzing transaction data which allows a merchant to or a business to refine what they offer in store or how they target promotions more effectively. 

As a business owner, your whole goal is to optimize for the consumer relationship. And so, if it’s an omnichannel payments experience, if it’s a super targeted vertical specific payment experience, whatever it is that you need to do to get ahead of your competition, you should be doing that and that includes something as simple and maybe complex as payments. 

Steve: That’s a powerful point, Max and I wanna make kind of a side note to that as well. Like when the payment experience is really good, it’s almost invisible, right? And when it’s really bad, that’s when it’s noticeable, that’s when people complain and that’s when you start to lose out on that relationship. So very critical point there.  

But it’s important to note that, while digital channels are growing, in-store experiences still remain vital. In 2024, 43% of consumers expect to make most of their purchases in store, up from some 39% back in 2023. In regions like North America, this figure climbs even higher with 55% and 48% respectively, expecting to spend most of their discretionary income in brick-and-mortar settings. So, payment technology isn’t just about online convenience, it’s about enhancing every customer interaction. 

Max: It’s also interesting to think about all this progress that we’ve made and how it’s not just one channel or another. It’s everything. Everything has to improve to meet increasing customer demands and it’s funny because despite all these advancements that we’re seeing, merchants also acknowledge that their technology is a work in progress. I think 23% or so believe they’re currently offering a highly digital experience for customers. And so it’s understanding that if you’re a business owner or you’re an ISV, it’s understanding that businesses are gonna take some time to adjust to the new payments landscape and they might even be a bit behind where the ball where the rest of the industry is. And so, a good way of thinking about this is think of your iPhone. Chances are, you might have a version of the iPhone that’s a couple generations old, right? You might not have the iPhone, I think it’s 16 or 17 that’s out now. You might have the iPhone 14 or the iPhone 15. It’s not about getting the iPhone 17, but it is making sure that you have some of the updates internally on your iPhone 14 or 15, that allow you to continue to interact with the new interface and communicate with your friends and communicate with business partners and allow you to have all the same capabilities as the rest of the pack. 

So, it’s not about always being at the forefront and always updating your technology, but always ensuring that you’re doing your utmost to meet your customers where they are is really important. For ISVs, for ISOs, it’s adopting technology so that you can educate your business, your merchants along that same line of thinking. 

Steve: Yeah, and I think it’s, not just, ISOs, ISVs, but it’s the provider as well. So, it’s us and making sure that we’re ahead of those trends as well. We’re gonna dive into a lot more of these payment technologies more individually in later episodes as well. Like we could really go very in depth on this specific subject but I think for this episode, it’s really important for us to just kind of highlight the importance of the relationship that payments play with the consumer to the merchant relationship. But just kind of bring this home, payment technologies today are, are much more than just tools for completing transactions, right? They’re strategic enablers that drive trust, personalization and loyalty in that relationship from merchant to consumer. By embracing payment innovations over time, merchants not only meet the modern consumer demands, but also gain insight that drive business growth over time. Whether it’s through mobile wallets, omnichannel integration, or simply providing more payment options, the goal is to create a seamless experience that works for the consumers that you’re trying to target and keeping up with the demand and the trends of the consumer behaviors that we’ve talked about in the previous episodes as well. And so, again, whether it’s mobile wallets, omnichannel integrations or just having additional payment options, it’s really critical to focus on that payment experience. 

Kind of like I mentioned earlier, when it’s a good payment experience, it’s invisible. Like it’s not necessarily the forefront of your business, but consumers have so many things that they consider when they’re making these decisions. The last thing that they want to have struggle with is actually completing that transaction, and that’s gonna yield a better benefit for the business as well. 

Max, do you have any, additional comments on that as we start to wrap this up? It’s a little bit of a quicker episode today, but like I said, we’re gonna dive more in depth into the specific technologies on individual episodes moving forward. But I don’t know if you have any additional comments. 

Max: The specific technologies and specific solutions that the payments industry is releasing. But it ultimately comes back to the point that if you’re a processor, ISV, ISO, merchant, the goal should always be to continually look for growth and innovation and the North Star are these seamless, integrated, safe payment systems. That looks different for each stakeholder that I just mentioned. It’s not saying that you have to do every one of these things, the goal should be integrating those solutions that are appropriate for your domain. 

So, we’ll try to make that super clear. We’ll try to try to show the opportunity that’s both quantitative as well as qualitative for each of these stakeholders. And it’ll be a great dive into the industry. So, I’m really looking forward to it. And Steve, let’s close this one up.  

Steve: No, I appreciate that. Final comment there, again, wrapping up today’s discussion, a little bit of a quicker episode, but we do really wanna hear your thoughts on how have recent payment innovations improved your shopping experience or diminished it. What changes have you noticed in your interactions with merchants? 

Join the conversation with us on social media channels. If you’re watching this on YouTube, please leave a comment. We’re checking these out and who knows, we might start looping in some of these thoughts and questions into episodes as well. But we really want to be engaging with this. 

Please drop your feedback and comments, questions on those platforms. But again, thanks for tuning in today’s episode of Payment Pulse. We appreciate the time. We’re Clearent by Xplor and we will see you next week.