Finance and technology. Innovation, futurism and adapting to change.
Do you have a bank app on your phone? Do you use fingerprint or face recognition technology to ensure security? Ever used a face swap with your friend, or perhaps turned yourself into an animal? Ever been in a self-driving vehicle?
20 years ago these would have looked like questions straight from a sci-fi movie, today we are not surprised. That is the beauty of innovation — over the years, it seems we are moving slowly, adding new technologies, getting used to them. Then we look back at the society 20 years ago and we see a shocking difference. Are you surprised with a flying taxi, curing any illness by taking a pill with micro robots which target impacted areas?
What if — mobile banking technology will be “ancient” after 20 years? And microchip payments will be “ancient” after 50? It is both exciting and terrifying to consider. Can we stop innovating, will it ever be enough? I don’t believe so — we, humans, are innovating since the beginning of times and innovation drives economic growth.
Above is the traditional, well-known transaction processing cycle. To sum up the standard process -
- Customer makes a purchase online, using his card details and personal information.
- Data passes through the merchant and goes to the merchant’s payment gateway / transaction processor. Merchant & payment gateway integration varies, however, I believe most common method nowadays is via API or iFrame.
- The transaction goes further to the card network (Visa / MasterCard) where the received data is verified.
- Then it is sent to the acquiring bank, confirming details again.
- All information is validated and goes back to the merchant as transaction successful / processed.
- The merchant’s system sends confirmation to the client — purchase is made. And then merchants can proceed with the requested product or service.
Important to note, transaction may be rejected or canceled at any stage — it may get rejected at the merchant level, if a customer entered a card number incorrectly; it may get rejected by a bank, due to customer data, balance errors etc.
What can be innovated? Any step of the process, literally. Or the whole process can get innovated and replaced. Shall we talk about crypto currencies or futuristic under-skin micro chip payments… Referencing Swedish innovators here.
While I cannot explain how genius people come up with these awe-inspiring technologies, I can outline how I worked on innovation in my own small business -
- The problem. When there’s a problem, we need a solution. A small example, when I was a merchant, one of the biggest problems was transactions getting dropped by a lot of customers at the very last step (not completing the purchase).
- Gathering data and analyzing. Is there a technical problem or is it something that customers do not like? So I went testing. No technical errors found. Then I asked more people to test. Do we need to change one step, one technological solution or the full process?
- Brainstorming and testing different solutions. It became clear we had to simplify / optimize the process. There were simply too many buttons — enter data → click next → enter data → click next. So we simplified it. Enter billing, shipping and card data on a “view your cart” page → and done. A similar, popular solution is a one step / one page checkout, which allows customers to view their cart, click “checkout” and complete their order on that page. We chose to do the checkout directly on the “cart” page. So really, simplicity is the best bet, in my opinion.
- Data has the answers. Sometimes your orders may increase just because you changed a color or a font. If we come up with few different solutions to a problem, why not to test them all and see which one works best.
- Implement.
As A. Einstein said, — “If you can’t explain it simply, you don’t understand it well enough.”
Innovation means efficiency, growth and profit.
