The evolution of eCommerce is being supplemented by fintech innovations that are making online purchases more streamlined and adaptable than ever before. This is helping to put more industry startups in touch with a larger target audience.
According to McKinsey research, revenues in the fintech industry are set to grow nearly three times faster than the traditional banking sector between 2023 and 2028, and this will pave the way for more innovations for eCommerce startups to achieve their conversion targets.
Cutting-edge fintech solutions are increasingly shaping the eCommerce landscape. The arrival of artificial intelligence and blockchain is set to accelerate this aspect of digital transformation exponentially. With this in mind, let’s take a deeper look at seven fintech innovations that are driving eCommerce growth for startups:
Payment Flexibility
Digital transformation has empowered eCommerce startups to take their payment flexibility options to new levels, and this has been characterized by the availability of 0% interest online loans that can be directly introduced at checkout.
This has empowered consumers to make larger purchases and increased their options for large, one-off purchases.
Fintech has also helped to expand the ways to pay for online shoppers, opening the door to mobile wallets and even cryptocurrency purchases, paving the way for less friction throughout the checkout process.
Next-Generation Consumer Insights
Fintech tools can also aid businesses in analyzing significant volumes of data produced by customers, empowering startups to deliver more personalized experiences.
By combining customer analytics, eCommerce stores can work alongside fintech solutions to tailor marketing strategies and product offers at the point-of-sale (POS) to help encourage upselling and multiple purchases online.
Cross-Border Purchases
The world is becoming smaller thanks to the universality of social media and natural language processing (NLP), and this is helping eCommerce stores sell their products to international customers at scale.
Cross-border transactions have been streamlined with the help of fintech, with tools making complex processes like currency conversions, translations, and extensive regulations more manageable for consumers and retailers alike.
By supporting multiple currencies, real-time exchange rates, and localized payment options, fintech is helping businesses to expand their reach on a significant scale to sell virtually anywhere in the world.
Intelligent Invoicing
Fintech transformation in eCommerce isn’t just customer-facing. The technology is helping to drive innovation throughout every step of the supply chain, including accounts payable.
AP automation processes can help to speed up supply chain processes and ensure that there’s no danger of stockouts facing eCommerce startups. The best AP automation software also comes equipped with tools like intelligent invoice capture, which extracts essential data from a range of invoice formats to prevent instances of human error when paying vendors - many of which accept crypto payouts as well.
Enhanced Security
Fintech is also rapidly improving the security landscape surrounding eCommerce thanks to advances in its payment systems. The growth of biometric payments, which can encompass fingerprint, voice, facial, and retinal authentication, has helped to ensure that payment fraud is mitigated to the best of the technology’s capabilities.
For eCommerce retailers, these biometric authentication tools can be utilized alongside other email or mobile verification tools to offer two-factor authentication (2FA) or multivariate authentication for more expensive purchases.
Crucially, 48% of consumers state that they feel more secure when using 2FA to make purchases, and this means that eCommerce startups can build higher degrees of trust among their customers by embracing fintech-based security measures.
One-Time Use Virtual Cards
Another strategy to mitigate security risks for eCommerce businesses focuses on one-time use virtual cards, which are created on-demand for approved purchases within the business.
Because having a company credit card can open businesses up to the risk of fraudulent purchases, one-time use virtual cards can streamline B2B payments for retailers without the risk of essential company data falling into the wrong hands.
These virtual cards operate in a similar way to one-time passwords, and they actively reduce the risk of damaging data leaks that could see businesses end up paying for purchases they haven’t made.
For eCommerce startups, generating on-demand virtual cards can increase checkout efficiency, with less lag between procurement departments approving purchases and employees being able to complete transactions on the company’s behalf.
The Arrival of Blockchain
We’re also seeing blockchain technology herald a new era of decentralization within the world of eCommerce.
This innovation is set to transform supply chain finance and improve the transparency of transactions and product tracking through every step of the chain. This can provide a more holistic overview regarding the authenticity of materials and their ethical sourcing.
For many customers, ethical supply chain practices can be a significant draw for eCommerce firms, and having the ability to record and track every step of your supply chain using a blockchain means that you can offer greater authenticity to customers.
Driving the Future of eCommerce
The unity between the worlds of fintech and eCommerce is helping to drive an innovative future that’s more secure and flexible than ever before for customers online. This helps to improve the online shopping experience while upholding a stronger degree of transparency and trust between businesses and their consumers.
Startups can benefit significantly from these fintech innovations within the industry and maximize their growth potential in an increasingly financially interconnected landscape. This can help to break down age-old barriers in lead generation and form the foundation for sustainable online retail.
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