If 2020 has taught us anything, it’s the need to be agile and prepare for the unexpected. Though I doubt anybody will be sad to see the back of this challenging and turbulent year, there are some positives we can take from it.
For instance, 2020 has been a driver for change throughout the fintech and payments industries, as commerce has moved predominantly into the online space and cash has finally taken a back seat to make way for more digital payment methods.
With that being said, as a marketer in the ever-changing and progressive sector that is LendTech, I’m excited to embrace 2021 and explore what lies ahead. So, here are my top predictions for this year:
LendTech technology will continue to evolve
By its very nature technology, and particularly LendTech, is a fast paced and evolving industry. We saw as much in 2020, as enhancements were made to support living under lockdown, such as Starling Bank’s ‘Connected Card’, which allows trusted shoppers to make purchases on behalf of customers who are shielding.
According to the UK government, online retail shopping made up a total of 32.8% of all sales in May of this year, the highest it has ever been. While that number decreased slightly over summer as restrictions eased, they are back up again, reaching 28.1% in October 2020, and in 2021 they will continue to rise.
As more retailers open ecommerce stores, merchants will focus on introducing new quality of life features to enhance the customer experience. Additions to the checkout experience will be introduced over the new year, as well as new online visualisation tools that will improve the shopping experience.
Keeping up with Customers
As mentioned, we saw a huge consumer swing towards online shopping in 2020, and to keep up with this demand, retailers had to innovate to meet customer expectations for products and services. This trend will only continue to increase in 2021, as services that require face-to-face interactions – such as trying out makeup and exercising at the gym – are already transforming with online beauty consultations and workout classes.
In addition, with lockdown encouraging more customers to spend money on projects they might otherwise have put off – for example, home improvements – 2020 saw an increase in the use of POS finance, and I suspect customers won’t simply go back to their old way of shopping in the future.
While consumers are looking forward to lockdown measures easing in the future and going back to a state of normality, the use of these new digital solutions will far outlive the Covid-19 pandemic.
A growing presence for LendTech
Providing consumers with more payment options when online shopping will form a huge part of 2021. As more customers make use of POS finance, it will become vital that retailers include a LendTech option in their checkout amongst other contactless payment methods to avoid the risk of losing sales.
This is a particularly pertinent issue as, when using eCommerce shopping methods, it is easier than ever before for a customer to jump from one shop to another. That means that if a payment option they prefer is not available at one retailer they can quickly and seamlessly move to another.
On the other hand, retailers who work with credit partners to enhance their payment options are likely to see an increase in sales – and our data tells us that this includes an increase in average order values too.
The more options the better
When it comes to the variety of credit and payment providers available in the UK, retailers really are spoilt for choice. That’s why, as we see LendTech become more mainstream in 2021, we will also begin to see retailers offering a greater range of options on their eCommerce platforms.
The LendTech solutions on offer can range from shorter-term – which tend to run up to three or four months before charging interest – to more long-term options, which sees the customer spread the cost over up to 12 months. As well as this, there are interest free and interest-bearing solutions.
By giving the consumer the ultimate choice in how they pay, control of their finances is being given back to them, making it easier for them to manage their monthly outgoings.
The great news for retailers is that several payment options can sit alongside each other at the checkout, and as more customers get used to using LendTech as a payment method, they will almost certainly have preferred lenders.
All in all, 2021 looks set to provide another huge step forward in the evolution of LendTech as a payment option. More consumers are using the payment method than ever before and, as such, the demand to see it installed in their favourite retailers’ checkout pages is increasing.
The future looks bright, so let’s embrace it!
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