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E-commerce, Omnichannel, and Real-Time Payments

At Bambora, there is a running joke that we started our business in the year 2000 at the dawn of e-commerce – which is not necessarily the real truth. Did you know that the history of e-commerce dates back to the early 1990s when the first retail online transaction was complete?

Think about all that we have been through to get where we are in the year 2020. Dial-up modems, the .com boom, even the rise of Amazon! Businesses were navigating the waters of setting up shop online, and not yet worried about what channels their users were on. 

Now, e-commerce companies have a different focus. Online shopping has created an experience known as omnichannel. The benefit now lies in making sure businesses are set up to capture consumers by shopping online and buying in-store, or vice versa. 

So what can be done to make omnichannel even more seamless? 

Most would probably argue real-time payments. This two-way immediate verification method provides an answer for one of the most long-standing payment questions – where is my money?

The Adaptability of E-commerce

Although the payments landscape is always changing, e-commerce is still more reliable than ever and isn’t slowing down anytime soon. In 2019, online spending made up 16% of total sales in the US – and that number is only expected to increase in 2020. But things didn’t catch on right away. 

Take mobile, for example. It wasn’t until recently that mobile payments really took flight. When mobile payments were first introduced in the early 2000s, they were slow to adopt. Now, mobile sales account for over ⅓ of all e-commerce transactions.

To get to this stage in e-commerce, where people are comfortable enough to allow their data across devices, very stringent security measures needed to be put in place. 

The late 1990s and early 2000s for e-commerce were kind of like the wild west for payments – there were no real standards to ensure businesses were meeting various compliance and security standards. It wasn’t until 2004 when the Payment Card Industry Security Standards Council was formed that provided companies with specific operating rules. 

It is all about adaptation when it comes to e-commerce. As a need arises, a solution follows. When the lines began to blur between in-store and online shopping, a new experience emerged – omnichannel.

Payments for Everyday Life

The goal of payments is to make a purchase simple. As the everyday business has become more sophisticated, so too has the way we make payments. 

Omnichannel has been able to bridge that gap. From online, in-store, mobile, and in-app, there are multiple touch points where we can purchase and pay right on the spot. New technologies like Alexa and Google Home have emerged that have allowed us to order goods and services right from the comfort of our own homes, using nothing but our voice.

But when it comes to transactions between businesses, the purchase process isn’t so simple. For example, if a company receives a partial payment for a service like catering, keeping track of the remaining amount can often be a challenge. 

Lack of transparency about the arrival of funds or lag times in between payment and settlement can have the company spending unnecessary time tracking down that payment.

Adoption of Real-time Payments

Connecting business to business, in real-time, with two-way communication and instant payment verification, is now becoming a way of life. With real-time payments, payers are notified the moment money reaches the payee’s bank account, eliminating the information gap where payees awaiting funds may be unaware of the payment status.

Think about the gig economy, which practically runs on real-time payments. All those ride-sharing drivers and online food orders need to get paid on the spot – there is no time to wait around for a payment. Once one job gets done it’s on to the next one! 

Requesting payment is also a benefit of real-time payments. In a situation where a company may be awaiting a remaining payment amount, that company can request payment through the real-time payment system, prompting users with a “pay now” response.

While real-time payments are more efficient, the money isn’t necessarily settled in real-time. The payment can be authorized within seconds, but the actual settlement may still take a few days. Settlement times are becoming less, but instant settlement isn’t quite there yet. The real differentiator here is knowing when and where the payment is.

Reduced settlement time, payment confirmation and the immediate availability of funds can give businesses more financial control and better management over assets. Without having to worry about payments, they can allocate resources elsewhere, further stimulating business growth. 

So how can you enable this type of growth for your customers? Just ask our experts. We create development plans catered to specific vertical markets, making sure you are ready for the future of payments.

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