by Sebastian Krahe
May 24, 2018

Consumers wish for added value during the payment process. A new generation of successful loyalty apps with a payment function are the best example: They offer a seamless payment experience combined with intelligent features providing added value.

Let’s be honest: Everyone loves shopping, but nobody really likes to pay.

But have you ever tried user-friendly and innovative payment solutions that offer added value? These really can make a difference.

A new generation of successful loyalty apps with a payment function are best example: They offer a seamless payment experience combined with intelligent features providing added value, making payment more fun.

Encouraging consumers to commit to a company is a key challenge in securing company’s success. But how do you get your customers to stay with you – or come back to you?

Added value: What consumers really want

Let’s start with the logical but also most important instrument of customer loyalty: service. Good service should be a matter of course, but what transforms it into excellent customer service and what do customers currently want the most?

As a current survey by Statista shows, today’s consumers wish for added value during the payment process.

These are exceptionally or somewhat appealing features of retailers, respondents answered (Source: Statista infographic made for Wirecard)

These are exceptionally or somewhat appealing features of retailers, respondents answered (Source: Statista infographic, made for Wirecard)

As shown above, 81 percent of respondents desire rewards for their purchases. Regardless of the payment process, almost two thirds would like to get personalized recommendations.

In addition, the figures allow the following interpretation: A large proportion of those surveyed would like to be able to benefit from this added value directly while shopping. For example, 67 percent stated they wanted mobile payment systems and half of them wished for integration with 3rd party loyalty apps.

When customers can look forward to benefits from added value, payment itself becomes something for which they get rewarded – which may even be a little surprising. This makes the payment part of the exciting shopping experience, which extends the pleasure.

How payment can establish a direct line to the customer

But let’s also take the retailer’s point of view: For them, modern payment solutions can be a great opportunity to get in touch with their customers on a regular basis and understand their needs.

A current example, giving practical evidence to Statista’s findings, is Alipay. This “super app” not only is a very user-friendly payment method, but much more than that: It is a way to receive vouchers and discounts, to see your friends’ recommendations and to recommend shops to others. And last but not least, it is a very sophisticated marketing channel to reach customers: Retailers can precisely get in touch with potential customers, for example contact via the app all males between 20-35 years who are within five miles of a store to offer them a personal discount for a new video game.

Giving Chinese tourists the opportunity to take advantage of their favorite payment app outside China is a huge sales opportunity for retailers: Alipay’s market share in China is around 60 percent, being regularly used by 520 million customers – which is more than the total of citizens in the European Union, just to give you an idea. And with 175 million transactions per day, Alipay is the world’s largest mobile payment network.

The first step to win new customers is to understand them – and this is how Chinese travelers like to shop

The first step to win new customers is to understand them – and this is how Chinese travelers like to shop (Source: Wirecard)

Alipay’s mother company Alibaba originally was focused on B2B retail only – but by inventing an innovative payment method full of added value features, the Alibaba group has created and captured a new market.

Paying by smartphone is gaining ground in Europe

But other companies have also already discovered the value and power of digital payment solutions – even if, as mentioned above, their core business originally used to be far from payment solutions.

Let’s for example take a look at the success story Orange Cash: Together with Wirecard, the huge French telecommunications provider Orange developed a virtual wallet using an NFC SIM card to securely store a digital Visa card, also enabling Apple Pay.

As paying becomes part of the exciting shopping experience and consumers can look forward to added value benefits, they are more likely to build long-term relationships with companies and brands.

By the end of 2017, more than 500,000 Orange Cash users had conducted over three million transactions at over 250,000 different stores, and these numbers are continuously growing. That suggests that although shoppers in Europe are only just starting to feel passionate about mobile payments, the trend of paying by smartphone is expected to soon take off.

And by this means, a telecommunications company managed to become a very successful provider of integrated and mobile services.

Whenever paying with Orange Cash, users receive 1 Euro discount, up to a sum of 25 Euros – this definitely makes payment fun!

Whenever paying with Orange Cash, users receive 1 Euro of cashback, up to a sum of 25 Euros – this definitely makes payment fun! (Source: Orange Cash)

And now, the German insurance group Allianz has launched a fully digital payment solution named Allianz Prime, starting in Italy. The new app is available for Apple Pay and Android and based on a virtual Visa credit card, widely accepted at NFC-enabled POS terminals.

An insurance company? Offering a mobile payment solution?

Absolutely – it actually makes great sense: Allianz Prime not only enables users to pay mobile, online and in store, but also insure you when you pay! Alltransactions are covered by Allianz’s insurance protection, which protects consumers from any costs in the event of fraudulent misuse of their credit card or if any goods ordered on the internet are not shipped or already damaged upon arrival at home.

In addition, the app provides a global platform for Allianz’s operating units to interact with customers on a daily basis, complementing traditional insurance products with advanced technology and additional services. So for the insurance giant and their customers, the new offer is more than great way to pay.

These are the main added value features of Allianz Prime app in a nutshell:

  • No more need for cash thanks to the virtual Visa card in users’ smartphone or wearable
  • The purchases are secure – Allianz protects users from banking fraud (mobile payment protection)- Users are covered by the Allianz Online Shopping protection if they receive a damaged product or a product other than the one they ordered from an online retailer
  • A reward every time users pay with the app: the more often they use Allianz Prime, the more points they earn

Allianz Prime focuses on a secure digital customer experience. Shortly after downloading the free app and registering, consumers can pay with their smartphones at the POS or when shopping online

Using this innovative way to pay, the user’s data associated with the virtual card will be encrypted and will therefore be totally inaccessible without an identification code or without the right fingerprint.

Users of the Allianz Prime app upload an amount of money and can exactly retrace which purchases they made

Users of the Allianz Prime app upload an amount of money and can exactly retrace which purchases they made (Source: Allianz Prime)

Reduced design and a clear display of payment processes

Allianz Prime automatically adapts to the consumer, provides an overview and shows what matters: accounts, costs and expenditure developments. Thanks to a clear user interface, consumers see how much money they spent within a month and for what – so and how much of the total prepaid amount they have already used. Furthermore, the app displays theirs transactions and kinds of expenditures. This is a practical way not to spend more than a self-chosen monthly amount and to look into previous months to see whether the expenditure is in balance.

Apart from all other benefits, Allianz Prime is also a great way to keep your expenses under control – so you can set yourself a limit per month

Apart from all other benefits, Allianz Prime is also a great way to keep your expenses under control – so you can set yourself a limit per month (Source: Allianz Prime)

Buy and insure with just one touch

Customers can easily and conveniently use the app by downloading Allianz Prime and registering for the service. Wirecard Bank then immediately creates a virtual account with Visa. Deposits to it can be made by a bank transfer from the user’s account or through the user’s own credit card.

To allow contactless mobile payments, users add the Visa card to their digital wallet – the so-called mobile wallet – with just one click. Allianz Prime users benefit from the following advantages in particular: contactless mobile payments at all corresponding terminals worldwide and collecting points as well as loyalty bonuses for every purchase they make.

Allianz Prime can be used for payment with any smartphone, but also with wearables

Allianz Prime can be used for payment with any smartphone, but also with wearables

Conclusion: Where are we heading?

This makes Allianz Prime, Orange Cash and Alipay good examples of how companies are already using payment as new way to access the customer: As paying becomes part of the exciting shopping experience and consumers can look forward to added value, they are more likely to build long-term relationships with companies and brands extending shopping fun in this way.

However, by offering user-friendly and innovative payment methods, retailers will not only receive loyal customers but loyal customers they understand. And this is what matters most if you want to score with your customers today: knowing exactly what their needs are and meeting them accurately. But this is also what becomes increasingly challenging. Modern payment solutions may be like a dedicated line to the customer here, creating mutual understanding.

So what still may seem like a payment trend today will be a natural part of everyday life tomorrow. And companies who understand how to use payment as user-friendly tool with many smart features, will obtain a strong customer loyalty.