King's Day set a new record: 650,000 person-to-person payments through Tikkie. That record isn't an isolated case. Joint research from the Dutch Payments Association (Betaalvereniging Nederland) and De Nederlandsche Bank shows that payments made via digital payment requests tripled between 2016 and 2017, to 96 million payments a year. Digital payment requests now account for 21% of all person-to-person transactions.
Summary
Conversational commerce means customers increasingly pay, sign authorizations, or settle outstanding invoices through messaging channels like WhatsApp and Facebook Messenger, instead of separate payment apps or email. Digital payment requests have grown fast, and companies that offer payment directly inside the conversation make it easier and quicker for customers to pay.
TL;DR
- Conversational commerce combines messaging with buying and paying online, through channels like WhatsApp and Facebook Messenger.
- Digital payment requests grew fast: they tripled between 2016 and 2017, to 96 million payments a year.
- Through messaging, companies can do more than sell products, they can also collect signed authorizations and settle outstanding invoices.
- Customers benefit from convenience: no typing out IBAN numbers, no switching between apps, and using channels they already use every day.
These results show that consumers are now used to, and willing to, pay this way. This trend is part of a bigger shift: conversational commerce. The term was coined in 2015 by Chris Messina, former Developer Experience Lead at Uber. Conversational commerce refers to the increasingly blurred line between messaging apps and online shopping, driven in large part by the global rise of WhatsApp, Facebook Messenger, and WeChat.
A variation on this is called conversational transactions. Here the focus is less on buying products through messaging services, and more on settling a payment obligation, such as an outstanding invoice.
It's all about making purchases easy
Let's start with an example of conversational commerce. An airline is reachable via WhatsApp and Facebook Messenger. Questions like "How much hand luggage am I allowed again?" or "Can I upgrade my seat?" come up regularly. The answers are easy enough to find on the website, but travelers choose to ask through messaging channels because they want convenience and speed.
During a WhatsApp conversation, it becomes clear that a traveler has packed slightly more hand luggage than allowed. The agent handling the conversation and the traveler agree that an extra bag needs to be added to the booking. To collect payment, the agent creates a digital payment request and sends it straight through WhatsApp to the traveler, who transfers the amount immediately. It's sorted in five minutes, which matters, since the traveler is flying in just a few hours.
Thanks to this low-effort way of handling payment, the airline scores well on KPIs like Customer Effort Score (CES). It's also a great example of how customer support can directly drive extra revenue.
More than just buying
'Buying' something is of course a common scenario. But as a company, you can arrange a lot more around payments through messaging. This is known as conversational transactions.
Authorizing
Someone decides to become a customer, or an existing customer wants to switch to direct debit or use a new account number. A link in a messaging conversation takes the customer to a unique webpage where a digital authorization is ready and waiting. All the customer has to do is check the details and set a payment term, then sign it via iDEAL.
Paying
A customer still owes a payment. An outstanding invoice, a reminder, or a failed direct debit. You're already talking to the customer through a messaging channel. How great is it if, as a company, you can offer payment right there in the conversation, so the outstanding invoice gets paid immediately? This way, you know for certain the amount has been paid, and the customer can mark the invoice as settled. In this situation, it's also possible to arrange payment plans through messaging.
Benefits for customers and users
- Typing out long IBAN numbers is a thing of the past;
- No more switching between email and a banking app on your phone;
- It's faster and a lot simpler;
- You use channels (messaging) you already use every day.
