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Moving to Frictionless Payments

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedJan 20222 min read

Frictionless payments are fast becoming the default way for consumers to pay for goods and services. From mobile wallets and mobile apps to one-tap contactless card payments, customers now expect a fully frictionless payment experience. To stay competitive, you need to develop a robust frictionless payment strategy. If you aren’t offering customers a variety of frictionless payment options, you run the risk of losing them to a competitor who does. In this post, we’ll take a look at what’s involved in a frictionless payment experience and how to go about creating one for your customers.

Frictionless payment definition

Our frictionless payment definition may help to outline the general nature of frictionless payments:

“Frictionless payments are data-driven payment methods that integrate data from devices, apps, and websites in order to simplify the purchasing process.”

Frictionless payments are replacing the traditional checkout experience. They intend to minimise the barriers of buying and selling, both in-store and online. Customers benefit from a slick and stress-free checkout experience, while businesses experience increased levels of customer satisfaction and lower cart abandonment rates.

Examples of frictionless payments

Frictionless mobile payments are, unsurprisingly, popular with consumers. Customers can leave their handbag or physical wallet at home and use their smartphone to pay for goods and services via a mobile application or mobile digital wallet.

Contactless cards and NFC (near field communications) are other much-used forms of frictionless payments. Contactless cards enable customers to simply wave their credit or debit card near a payment terminal without having to swipe or use a card reader. NFC is a contactless payment method that allows smartphones to communicate with card readers when close to one another, e.g., Apple Pay.

Frictionless payments can also help businesses and consumers with payments behind the scenes. Businesses have the option of collecting recurring or variable payments as well as one-off amounts from customers. Frictionless payments can also help to automatically reconcile invoice payments.

Benefits of implementing a frictionless payment strategy

There are a host of reasons to move towards a frictionless payment strategy from both a buyer’s and a seller’s point of view.

Benefits to the buyer include:

Eliminating lengthy checkout waiting times.
Reducing the number of steps to complete checkout.
Reducing stress at checkout (no credit card details or PINs required).
Offering flexibility of payment options.
Delivering enhanced security both online and on-premises. Mobile payments often require biometric authentication measures making them even more secure than chip and PIN transactions.

Benefits to the seller include:

Lower cart abandonment rates. The easier it is to pay, the more likely customers will stay at checkout.
Increased efficiency at checkout.
Greater customer satisfaction rates and increased customer loyalty.
A reduction in failed payments, easing cash flow concerns.

How to deliver a frictionless payment experience

Offering customers multiple frictionless payment options will not only speed up sales but streamline business processes. There are various ways to implement frictionless payments so let’s take a look at some of them:

Offer mobile frictionless payments. People take their phones everywhere and mobile wallets often come with a range of additional security controls, making this an attractive payment option for customers.
Offer Instant Bank Pay with bank-to-bank payments confirmed at point of purchase to create a smoother customer payment experience.
Remove complex, manual processes and decrease failed payment rates by offering a subscription plan or auto-renewal program. Then, you’ll be able to accept direct debit payments on your website or send secure payment links to customers.
Streamline processes and save time and money with an invoice-free payment system. This reduces the hassle for customers and sellers alike, with the option to turn receipts into automatically generated tax invoices.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.