The Case for More Visible Payments

Can a payment be too invisible?

Invisible payments are admired throughout the fintech world for the more pleasant customer experience they supposedly deliver. The major theme at the payments-focused Money20/20 in Las Vegas this week was faster money movement, with the secondary point of effortless, invisible money movement.

Real-time payments are coming, attendees were told, and just in time, because those millennials won’t wait! More to the point, payments should be invisible because customers want it. (The word “frictionless” is now frowned upon and used sparingly.) Uber’s name came up in, well, just about every discussion that took place on stage.

Invisible payments were the explicit topic of a discussion about integrated commerce featuring, among others, speakers from rideshare company Lyft, payments API vendor WePay, and house share service Airbnb, all proponents of payments getting out of the way of the “experience,” invisible payments by another name. But Jason Gardner, founder & CEO of payments platform Marqeta, disagreed that pushing payments to the background is always the best thing to do.

Invisible payments, Gardner said, must have “events” to mark when value is exchanged. With a traditional point-of-sale interaction, Gardner told Bank Innovation after the panel, it’s clear: You hand over your payment, you get your purchase and a receipt, and you’re on your way. With Uber, famously, and the recently acquired restaurant reservation-and-payment app Cover, you just leave — that’s the value proposition of those services, that the payments process in a yellow cab or restaurant is slow, even painful.

“Lack of an event can lead to uncertainty, and loss of trust,” Gardner said.

He recounted a recent low-friction transaction at the Apple Store, where he received his item, skipped the bag, then suddenly realized he wanted a paper receipt, rather than the lower-friction email receipt. “No one wants to be embarrassed, to have that experience of being challenged at the door,” he said. “The receipt is your credential saying, ‘I bought this.'”

In many cases, such as food delivery to one’s home or office via Seamless, Postmates, Caviar and the like, paper receipts are clearly unnecessary, but “events” can take many forms. Email notifications also work, and text messaging is an increasingly popular one — “Your food is coming.” “Your food was delivered.” “How was your food?” These provide reassurance to the customer, Gardner said. This happened, and you paid for it.

Why would a customer need this reassurance? Some customers, particularly those that may slide into overdraft and incur fees, need to pay closer attention to the amounts they’re spending. Friction in the reminder before and after purchases, and pausing to consider the ramifications of a purchase isn’t always a bad thing, Gardner said.

“The event has to take place on both sides,” he told Bank Innovation.

Others in the so-called invisible economy agreed.

“You may take a ride and it doesn’t matter what it cost, but when you’re making a living driving people, you need data on how you’re doing, what you’ve earned, if you want to keep working a few more hours or stop,” said Lyft’s engineering manager for payments, Femi Olutade.

Further, highly visible payments can often be the merchant’s friend at the point of sale. It may seem great to some customers to walk out of a store and have the purchase rung up out of sight, behind the scenes. “People forget the point of sale is a marketing vehicle,” Gardner said. “The actual purchase may be an important marketing event for a merchant.”

Just think of all those goodies by the cash register at your local grocery store.

So while technophiles may be enamored with the Uber experience and want to see it replicated everywhere, Gardner doubts that will happen, particularly across the massive brick-and-mortar retail world, where more than 90% of all commerce still takes place. “Sure, some people want invisible payments everywhere. But the perfect use case isn’t for everyone.”

Learn more about payments at Bank Innovation Israel, Nov. 10-11 in Tel Aviv. Request your invitation here.

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4 thoughts on “The Case for More Visible Payments

  1. […] Can a payment be too invisible?Invisible payments are admired throughout the fintech world for the more pleasant customer experience they supposedly deliver. The major theme at the payments-focused Money20/20 in Las Vegas this week was faster money movement, with the secondary point of effortless, invisible money movement.  […]

  2. […]   The Case for More Visible Payments […]

  3. […] other day I was re-reading a post from last October in Bank Innovation called The Case for More Visible Payments by Philip Ryan which highlighted an important point in the looming transformation of payments […]

  4. […] other day I was re-reading a post from last October in Bank Innovation called The Case for More Visible Payments by Philip Ryan which highlighted an important point in the looming transformation of payments […]