Fintech Retail Trends and Shifting Consumer Expectations

Fintech trends in retail are changing how consumers think about their relationships with retailers as they look for ways to save money and time while demanding more personalisation and convenience.

According to Liron Damri, President of Forter, "In 2020 alone, eCommerce exceeded $4.3 trillion, a volume originally forecasted for 2025."

This article examines how financial services related to retail are evolving by adopting more innovative technology to adapt to the times and meet the demands of modern consumers.

Providing easier digital payments for customers

One of the most apparent fintech trends in retail is the move to make payments more convenient. This shift in the way of doing things ranges from using mobile wallets and contactless payments to apps that allow people to scan items as they shop and pay for them later.

According to Maxim Kochnev, CEO at myPOS Technologies, "Consumers demand payments that make buying easier for them. This includes innovative options such as tap-to-phone and pin-on-glass technology or a fast checkout, which feels like a natural part of the customer experience."

Improving access to finance for the underserved

Another trend is the steady rise in fintechs providing accessibility to finance during the purchase process, which is being made available through a number of different channels. These include apps to provide an instant credit score, loans for purchases in-store or online, and financial management tools to give consumers the ability to track their expenses.

"For most small and medium businesses around the world, access to financing for their operations is lacking," said Tayo Oviosu, Founder and CEO at Paga, the leading payments platform in Nigeria. "Fintech is enabling a world of embedded finance with innovative ways for SMEs to fund their business and scale by giving fintech companies visibility to their transactions. We've seen the growth of working capital products, or Buy Now, Pay Later. Consumers also benefit from these developments as they now have more options at the checkout."

Supporting underserved communities through payment technology

In addition to making it easier for consumers to make payments, there is also a trend of using technology to help local sellers in underserved markets. This trend includes providing sellers with access to financial services and tools to allow them to sell online and reach a broader customer base.

Tim Nixon, CEO and Founder at Trolley.com, thinks, "Fintech solutions open the playing field for increased seller participation: expanding access to sellers in more countries, allowing payouts in local currency and removing excessive FX fees, helping marketplaces settle with their sellers in a timely manner, and removing barriers to entry—which can be as simple as supporting alternative ways to payout a seller."

Identifying bad actors in the digital payment space

The retail world is also seeing the use of new technology to identify people who break the law. This category includes using better identity authentication, credit scoring tools, and improved fraud detection solutions to help businesses improve their bottom line by reducing financial losses associated with electronic payments and transactions.

Real-time decisioning, according to Liron Damri, may help reduce return abuse. He said, "If you can identify bad actors or repeat abusers, you can adjust policies in the moment. For example, a person who has frequently used an 'item not received' excuse must sign for the delivery. A repeat returner can buy merchandise, but it is all sales final. By bringing more consumer intelligence to eCommerce, businesses can reduce loss to return abuse while maintaining differentiated policies for their best customers."

Enhancing transaction approval rates for retailers

The need for increased security is pushing retailers to adopt new authentication tools and processes, such as reducing reliance on passwords. This change allows them to enhance their transaction approval rates while also reducing fraud levels in real-time. Fintechs can help retailers achieve it by using smart devices such as wearable gadgets or mobile phones that store biometric data to help authenticate individuals.

"A key additional challenge rooted in the increasingly cross-border nature of transactions is approval rates - something extremely important to any retailer on the planet. Approval rates tend to decline dramatically when payments are not processed locally, and that leads to cart abandonment, lower sales and ultimately lower customer satisfaction," explained Mario Shiliashki, CEO of PayU. "Merchants, therefore, need to adopt methods to tackle these challenges, including payment methods that cater to local and global customer bases, single API connection and approval rate optimisation features."

Seeing the bigger picture in transaction data

Retailers can use the insights from transaction data to see how their businesses are growing and provide a more personalised shopping experience. A company might utilise customer purchase history to offer tailored discounts on their next visit and boost sales. As the fintech world moves towards real-time insights and analytics, this type of data-driven personalisation could become even more common.

"Fintechs and banks have the tools and data sources to analyse small business owners' activity and help them manage their business more effectively, starting from the basics of day-to-day to recovering from issues," said Dorel Blitz, VP of Strategy and Business Development at Personetics. "Business owners have a lot on their mind and tend to think about their business operations in terms of workflows: order-to-cash, procure-to-pay, record, and report. If fintechs and banks can think on behalf of businesses in this way, it will benefit both parties."

The bottom line and innovative fintech solutions

The retail space is undergoing significant changes driven by shifting consumer expectations and demand for improved ease of use. The advent of fintech has provided retailers with innovative solutions that have helped them to improve their bottom line while also making the shopping experience better for consumers.

"Processes that used to take days, weeks, or even months, such as seeking a credit report or conducting an international money transfer, are now completed in minutes or seconds thanks to financial technology," noted Deepasha Kakkar, the founder and CEO of Crackitt. "Financial technology has the potential to streamline historically clumsy operations because it is focused on numbers rather than on human skills and judgments."

"While a few years ago one-off new and exciting offerings were enough to win customers, if retail banks want to maintain loyalty, it's no longer about simply offering a pretty debit card or making the sign-up process quicker, but about delivering lifetime value to customers," added Andrew Warren, Head of BFS UK&I at Cognizant.

In conclusion, the world of retail is changing, and fintech is helping to push it forward. As financial technology continues to evolve, more impressive innovations are likely to emerge to serve the retail sector.