How to profit by making payments disappear

When was the last time you enjoyed getting your wallet out? It is a truth universally acknowledged that we consumers do not like paying.

Let me put that another way – consumers don’t like being present in the moment of paying. Because, whilst the act of transferring our hard-earned cash – to a store or service provider – is a negative, a loss of essential resources, a new breed of company has found a way to overcome the pain.

Why is ordering an Uber car such a joy? Not only for the ride quality. Instead, it’s because at no point during the journey does the customer have to actually make an act of payment. No money changes hands, no credit card is swiped, no change is given.

The genius of such a model is not just in creating a pleasant consumer experience or a better way to pay. It is that Uber found a way to hide the conscious step of payment entirely. Merely linking a payment card to an account at sign up is the only time a customer will actively think about the means of payment. Every journey thereafter is rendered effortless because, with payment automatically deducted following a ride, the psychology of payment itself has been removed from the equation.

Of course, Uber is not the only outfit to get greater custom by taking payment itself out of the equation. Spotify’s subscription model incentivises greater music consumption by automating payment on a monthly basis. Adobe does the same for software. Gymnasia have operated the same set-and-forget approach for years.

But these aren’t the only businesses that can benefit from making payments disappear. Here’s how yours can too.


Design your business model accordingly

Subscription is not the only business model that supports set-and-forget benefits. How you take payment pain away from your customers depends on the model you pick.

A one-time software licence allows consumers to make an upfront commitment that will be their only ever outlay. Pay-as-you-go allows them to be in control of spending despite having already linked a payment, making them more likely to spend further.

How to decide? Recognising your cost base is key. If you can cover the cost of giving away unlimited service for a set monthly fee, subscription will work. If your outgoings are more closely tied to your income, pay as you go.


Ensure a frictionless experience

Making money by hiding payment is all about making the experience effortless, one that encourages more consumption.

Identify when in the user journey you will ask for payment details, and when to process them. In Uber’s case, adding the means of payment is amongst the first thing users will do after downloading the app. But actual billing doesn’t happen until many steps in to the user journey, the end of a ride. It all makes for a joyful experience the user wants to make more of.


Take payment by whatever means necessary

Hiding payment doesn’t mean ignoring it. Every business needs to get paid. Part and parcel of making consumers’ experience better is giving them as many mechanisms by which to provide you their payment details as possible. After all, if you support PayPal, Direct Debit and credit card, you are tripling your chance of securing custom.

Companies must be as open as possible. If a customer supplies details of an expired card, will you kiss them goodbye, or will you provide an alternative payment method to take her money?


Process chargebacks mercilessly

When a payment is made, it can come in two kinds – successful, or unsuccessful. Every day, customer payments get rejected for all kinds of reasons, including fraud. That means the boring task for a merchant of returning funds seemingly sent to them.

But don’t get in the way of what may be simple user mistakes. Instead, make this chargeback process fade away. A customer may have been temporarily short on bank balance, so notify her about a payment failure, giving her the option to set a future date for a new payment attempt. By understanding and empathising with reasons chargebacks arise, you can make it easier for your customers to turn a failed payment into a working one.


Jerome Traisnel is CEO and co-founder of SlimPay, an Authorised Payment Institution that enables businesses and organisations to set up subscription offers and collect recurring payments.

Jerome is the president of the French association of Payment Institutions (AFEPAME) that gathers all the non-bank payment firms licensed in France by the Autorité de Contrôle Prudentiel et de Résolution and member of the IPIF at the European level.

Jerome is also a serial entrepreneur with a combination of technical and business expertise. He founded Freever in 2000 that became one of the first European mobile social media. Jerome helps young start-up teams within the incubator of Telecom&Management SudParis Entrepreneur, and acts as non-executive board member in several innovative companies.

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