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Digital Receipts Seen As FI, Consumer Commerce Game Changer

Digital commerce may be happening at the speed of light — but too often, the receipts we get for all those things we buy leave much to be desired. When it comes to figuring out what we bought — as well as when, where and from whom — myriad challenges still exist.

In an interview with PYMNTS, Lee Kennedy, vice president, product management at Ethoca, said that trust can be elevated by joint efforts between merchants, issuers and other payments stakeholders to improve the consumer experience. How? By leveraging digital banking applications to deliver clear and transparent transaction information to consumers that removes confusion caused by unclear purchase and merchant details.

Kennedy said that nearly 80 percent of surveyed consumers have difficulty recognizing transactions on their online banking statements, per Mastercard research. And with at least 18 percent of online consumers reported to be first-time customers, the lack of transactional clarity combined with eCommerce novices can make for a less than satisfying online journey — and sour sentiment toward a particular merchant’s brand.

Kennedy noted, too, that transaction confusion can lead to unnecessary disputes and chargebacks, which can be time-consuming and costly for merchants and issuers. In-depth merchant and purchase information presented on statements can help resolve those pain points, he said.

At a high level, Kennedy explained, there is “inherent friction involved in digital commerce that doesn’t exist when shopping face to face.” It is more complicated to go through the checkout process online compared to paying at the cash register. The statement itself can be murky, the merchant’s name is not clearly shown and there may be payment processors or other middlemen. It’s easy for consumers to mistake what they don’t recognize for fraudulent activity.

As Kennedy pointed out, the dispute process is not easy to navigate and doesn’t enable a great consumer experience, even if it’s resolved successfully. The process, he said, “erodes the trust of the consumer in both ad engagement and online transactions.”

For businesses, it’s important to realize that digital transformation is an ongoing process — it’s not a point in time. Improving transaction clarity means investing in technologies that can scale quickly to help businesses remain current and deliver intuitive experiences for consumers in a fast-moving market, said Kennedy.

The Importance Of Trust

Merchants have the information consumers need to understand what happened in a transaction. This includes data such as location details, tax and shipping charge info, and more. By collaborating with issuers, they can resolve purchase confusion quickly and easily, eliminating many of the negative downstream consequences. Why issuers? Because they have the advantages of trust and a “centralized” position within commerce. And many consumers, he noted, are concerned about the potential threats that digital channels pose.

“Banks have the consumers’ trust. It’s not possible for every individual merchant to build up the same ‘trust relationship’ with consumers when it comes to privacy and protection,” said Kennedy. “But they are already trusting the FI with their money and information.”

Against that backdrop, banks have a unique opportunity to prevent customers’ transaction confusion in a collaborative way, helping merchants while also crafting a stronger relationship with the individual.

Kennedy told PYMNTS that preventing disputes can take the pain out of the eCommerce ecosystem, and that presenting more granular detail on the statements — in effect, evolving beyond “the traditional bank statement” — represents a customer service opportunity. “The digital experience, in particular, is one that consumers are citing as one of the main factors in selecting one issuer over another,” he noted.

There are many positive ripple effects that come from cooperating to provide an easily digestible data flow through the ecosystem, said Kennedy. “Merchants are recognizing that they can collaborate with the issuers,” he explained. “And by leveraging the issuer channel with the merchant data, the merchant provides a better experience for their customer. It’s augmenting the value of their merchant properties.”

Placing clear merchant and purchase details — as well as digital receipts — in a secure, centralized location enables businesses to realize “great opportunities” to improve customer experience and engagement. Digital receipts are more than just taking the paper readouts and putting them into an electronic format — they aren’t just email attachments that get lost forever in a recipient’s email inbox. What does the future of digital receipts look like? It could include instruction manuals, promotions or loyalty programs embedded within them to increase engagement with consumers.

“The digital receipt becomes a gateway into the interaction with that merchant, and about everything related to that purchase and potentially future interactions,” said Kennedy. “There are all kinds of new engagement opportunities that add value as a merchant and as an issuer, which adds value in terms of your customer retention.”

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