How to Create a Frictionless Payment Experience

With the payments market on pace to exceed $3 trillion in revenue by 2027, understanding how to provide your customers with a convenient and error-free payment experience is paramount. 

Achieving a frictionless payment process requires advanced technologies designed to eliminate inefficiencies, such as network tokenization and advanced vaulting.

However, integrating such technologies can take an enormous degree of time and resources without the proper support. A comprehensive open payments platform can be essential for accessing the many different tools needed to create truly frictionless payments. 

Removing friction points from the payment process requires you to first understand the source of these pain points. Taking a close look at where your customers encounter challenges can be critically important for tailoring payment experiences to your target audience. 

As payment orchestration and open payment capabilities become more widespread, frictionless payments are helping to shape the digital economy and modern payment preferences. 

What Causes Friction in Payments?

Payment friction can arise from many factors, often leading to frustration over failed transactions. 

Cumbersome checkout processes are a common cause, requiring customers to input excessive personal information that weighs down the checkout experience. Customers know entering details like billing addresses and card numbers every time they make a purchase is inefficient, with many preferring to share their payment data with companies to save for future purchases. 

The rise in popularity of digital wallets, like Apple Pay and Google Pay, have set new standards when it comes to customers’ payment expectations. Digital wallets offer one-touch payment capabilities and highly intuitive user interfaces — a far cry from the outdated payment products still used across online marketplaces and digital storefronts today. 

To address these issues requires you to first assess your existing approach to payments. Understanding what technologies you currently employ is the basis for building a more modern payment infrastructure, 

Simplifying the checkout process by minimizing the number of steps and fields required can significantly reduce friction. However, achieving a simplified checkout likely requires the capabilities to connect with and embed various third-party payment service providers (PSPs). 

As such, adopting innovative technologies plays a significant role in your ability to provide customers with smooth, friction-free payment experiences. 

Key Technologies Enabling Frictionless Payment Experiences

Today’s advanced technologies can enable a frictionless payment experience by enhancing overall convenience, security, and efficiency. 

Open payments and payment orchestration refer not to one specific technology but to a modern tech-based approach to facilitating payments. Embracing the open payments approach can be a vital first step if you want to improve your payment experiences across the board. 

Before you can integrate products like digital wallets into your platform, you need the right set of foundational technologies to sculpt your payment stack: 

• Network Tokens: Network tokenization offers many advantages for creating frictionless payments. From one-time payments to recurring bills or subscriptions, network tokens enable you to reduce your decline rate and keep your stored payment data fresh. Network tokens also reduce your PCI compliance scope, helping you to meet key security and privacy requirements. 
• Advanced Vaulting: Modern vaulting capabilities are imperative when enabling frictionless payments. An advanced vaulting solution can provide you with the ability to optimize your payment lifecycles while simultaneously simplifying your payment system management. Leveraging an advanced vaulting solution can streamline payment experiences for your customers, increase acceptance rates, and lower overall costs.
• Intelligent Payment Routing: Intelligent payment routing technologies ensure the efficiency and success of your transactions. With smart routing tools, you can optimize each payment for cost-effectiveness automatically while also increasing your transaction success rates. Technologies like machine learning help identify the best routing options for each individual payment. 
• Event-Based Payments: Specific events like concerts or sporting events can cause businesses to experience large, short-term spikes in transactions. Event-based payments require payment technologies with sufficient scalability to handle major fluctuations in transaction volume. When effectively employed, event-based payments can be the key to an excellent customer experience during times of high demand. 

Building Better Payments with an Open Payments Platform 

Frictionless payments offer numerous benefits for both you and your customers. Open payment platforms like Spreedly lend you the power of payment orchestration to revolutionize how you process and manage payments across your business’ financial ecosystem.  

Open payment platforms can support frictionless payments in four key ways: 

1. Heightened Operational Efficiency: Payment orchestration solutions can improve your overall operational efficiency and ensure timely payment processing. Through an open payment platform powered by payment orchestration, you can automate many essential payment processes and integrate new payment service providers with ease. Plus, open payment technologies enable you to allocate more of your talent and resources toward core business activities rather than IT maintenance.  
2. Increased Conversions: One of the primary advantages of frictionless payments is increased conversion rates. A streamlined payment process reduces pain points across the payment experience. Open payment technologies ensure each friction in the payment process is addressed to minimize cart abandonment rates and simplify the checkout process overall. With such improvements, you can enhance the checkout process with one-click payments and digital wallet integrations to make buying from you all the easier for customers. 
3. Enhanced Customer Service: A frictionless payment experience powered by payment orchestration enhances customer satisfaction and loyalty. When transactions are smooth and hassle-free, customers have a more positive opinion of your brand. Such positivity can lead to additional purchases in the future and, hopefully, the start of a long-lasting relationship between you and your customers.  
4. Trustworthy Security: From the customer’s perspective, a frictionless payment experience offers peace of mind. Open payment platform features like network tokenization allow customers to store their payment information securely and make purchases with just a few clicks or taps, saving significant time and developmental effort from a security standpoint.  

Reduce Payment Frictions with Spreedly’s Open Payments Platform

Facilitating frictionless payments starts with an open payments platform and payment orchestration.

Spreedly’s payment orchestration platform offers you the tools and developmental resources you need to build a seamless payment environment. Through the Spreedly ecosystem, you can connect to hundreds of PSPs, payment gateways, and more.

Download the Payments Orchestration eBook Below