Fintech trends are beginning to catch on in New Zealand. New platforms are changing consumer buying habits and it’s time for businesses to prepare, says John O’Sullivan.
When we look at the history of economics, the development of tangible currency and product values is the cornerstone of modern society. Prior to this, all transactions were made through bartering and compromise.
A shift to domestication and a boom in agricultural societies required a more universal standard of value to measure commodities and the labour value of an individual’s work. And thus, the emergence of money and currencies into common use.
We’re well on our way to another huge shift in commerce as physical currency becomes obsolete and fintech solutions become more important to consumers. Businesses who adapt to this will prosper, while those that fail to evolve will be left behind.
Fintech is an umbrella term that covers any technological innovation in the financial sector – including innovations in peer to peer finance, investment algorithms and even crypto-currencies like bitcoin.
An important part of this for New Zealand businesses is the emergence of alternative payment methods that give consumers more control over their financial footprint – some of these are even starting to make a challenge to one of the early and most popular fintech inventions, the credit card.
New Zealand’s about to get Amazon’d
In a recent article in NZ Listener (October 7 – 13), journalist Mark Broatch looked at the expansion of Amazon Prime into Australia and what this would mean for the future of retail in New Zealand. It’s no surprise that the digital giant is on a crash course to expand into our country, and when it does the already exponential growth of online transactions occurring every day is set to increase tenfold.
New Zealanders have embraced card and mobile payment options significantly over the last decade, with society slowly but surely moving towards an entirely cashless society. According to Statistics New Zealand, in August 2017 alone there were 139 million electronic card transactions across all industries and the total amount spent across all transactions was $6.7 billion.
New Zealand is ripe for the retail revolution. As a country, we’ve always been a testing ground for financial technology – in 1985 we were one of countries to embrace Eftpos technology widely. And now we’re seeing new fintech technology platforms that empower consumers and will transform the shopping experience.
The question is, will local businesses be able to keep up with the changing tide?
Convenience is king
In this day and age, convenience is one of the strongest divers of consumer decision making, especially among millennials. This generation has been raised with a healthy suspicion of credit products after living through the 2008 global financial crisis. They are technologically savvy and embrace fintech solutions readily.
Payment instalment platforms like PartPay give consumers who make their payments on time a no fee and interest free option to credit cards and other personal loans. Being able to use your debit card and split payments into manageable instalments while receiving your product or service immediately provides the freedom to spend flexibly in the modern era.
Benefits are clear for consumers, but what do businesses get for embracing fintech solutions? After all, it’s the retailers and service providers who are covering the cost for many new payment options. The most obvious answer is ensuring customers are happy. If you’re not embracing industry trends you can guarantee one of your competitors are. Secondly, PartPay research shows businesses that incorporate payment instalment technology into point-of-sale options have increased average spend and basket size.
Another example of business benefits is from 2016 when Business Insider reported the introduction of a “Pay with Amazon” button to their online stores saw 200 per cent year-over-year growth in merchants adopting this system to their online platforms – tapping into a database of 23 million users actively using the service.
Giving consumers options to suit their lifestyle is key for businesses going forward. These fintech trends are beginning to catch on in New Zealand, so it’s important for businesses to sit up and take note of the way these platforms are changing consumer buying habits.
John O’Sullivan is director and founder of PartPay.