Cross-Border Payments: The Convergence Of eCommerce And Consumer Finance

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Sid Singh, president, U.S. information solutions for Equifax, discusses how the pandemic has created the ideal environment for a digital payments migration – and why he believes the convergence of eCommerce and consumer finance has only just begun. Ready more in The Connected Economy’s Power Source – CEO Edition.

The last 12 months made “unprecedented” one of the most overused — and accurate — words in the English language. In an environment unlike anything experienced in our lifetimes, digital interactions and online opportunities are on new — and unprecedented — trajectories. When everything changes, many needs stay the same. A global pandemic forced shoppers to find new ways to obtain everyday products — with a paper shortage top of mind.

The result? U.S. Department of Commerce data indicated the highest eCommerce growth in America in at least two decades in 2020.1 In addition, the McKinsey studies indicated that the response to COVID-19 accelerated the adoption of digital technologies by three or more years.

The resulting changes in consumer behavior are what we expect to continue even post-pandemic, a “new normal.”

Whether you’re a bank, an eCommerce provider or a car dealer, today’s environment now demands that consumers have the same — if not better — experience on their digital platform as they do on a major eCommerce retailer’s site.

Our prediction? While it may seem like an “unprecedented” shift, the convergence of eCommerce and consumer finance has only just begun.

As the digital migration accelerates, managing authentication and online fraud while optimizing the consumer’s experience has become one of the industry’s top challenges.

Identity trust – or the ability to determine the level of trust for each identity behind every payment, account creation and login event – has never been more important. Identity trust bridges the gap between consumers and businesses. It enables businesses to determine the level of trust and risk they are comfortable accepting in order to block fraud. Also, it enables consumers to move through online interactions with ease.

With a firm understanding of identity trust, businesses can redirect resources normally dedicated to reviews, false positives and fraud recovery toward the creation of more rewarding and personalized customer experiences that promote consumer loyalty — ultimately helping to positively impact the business’ bottom line.

The importance of identity trust is at the forefront in the increasingly popular buy now, pay later (BNPL) industry, providing consumers with choices in financing their purchases big and small. BNPL essentially allows individuals to buy on trust with various terms over an agreedupon time period.

And the consumer response to this payment choice? By some estimates, the global BNPL industry is expected to top $1 trillion in annual gross merchandise volume by 2025. For businesses hoping to further monetize digital transactions, BNPL means another potential avenue for customer loyalty and increased conversions. It will also require continuous attention to the digital user experience.

This is where the convergence of eCommerce and consumer finance — and the role of identity trust in that convergence — comes into focus. It’s also why Equifax acquired Kount in early 2021. More than ever, establishing consumer identities is key to delivering trusted, relevant interactions that provide dual protection for both consumers and businesses in our increasingly digital world.



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