How fintech is shaping the future of e-commerce

As e-commerce has boomed, it has reinvented the consumer’s traditional path to purchase, forming new customer experiences, disrupting business models, and creating growth opportunities for retailers of all sizes in addition to giving way for a new generation of solely e-commerce players.

In the past 10 years, another rapidly growing sector is fintech. In the MENA region, the burgeoning fintech market is expanding swiftly at a CAGR of 30 per cent. What’s interesting is how fintech and e-commerce have become intrinsically intertwined. As e-commerce surged during the pandemic, the consumer demanded more, and they wanted it faster and better. We quickly realised that we possessed the know-how and experience to meet these growing needs and could leverage our expertise to provide a more efficient, convenient, and streamlined alternative to instore purchases.

In a post pandemic world, consumers are living a new way of life, focused on efficiency and convenience. Fintech solutions are facilitating payment processing, essentially optimising the checkout process and removing any points of friction. For example, most e-commerce websites offer the ability to save payment and shipping information, along with automatic checkout and one-click buying options, all of which decrease checkout times significantly and deliver a more efficient experience for the customer. The checkout process was improved even further through digital wallets and virtual credit and debit cards, which offer a more secure online alternative to traditional card payments.

Virtual cards are actually a significant driving factor of ecommerce growth in the region, giving the unbanked population an opportunity to participate in e-commerce. Within the UAE alone there are 1.7 million individuals without a bank account, making up 32 per cent of the working population. Virtual cards can be used for online or in-app purchases, wherever the international card brand is accepted. Finances are easily managed through the app, with no need to obtain a physical card or visit a bank. Virtual card issuance technology supports financial inclusion and presents a wider market for e-commerce players to tap into.

Fintech can improve customer experience through automated recurring payments – a technology that forms the basis of buy now pay later (BNPL) services. Through BNPL services, merchants are more likely to sell large purchases online since consumers do not have to pay the full amount in one go. They can also reach those who do not own a credit card and would not have previously been able to afford the purchase.

AI-based algorithms enable trend analysis and real-time data collection regarding user issues and consumer patterns. These valuable insights boost sales through e-commerce platforms by enabling merchants to make informed decisions regarding product stock, marketing tactics and expansion opportunities.

Meanwhile, customer experience lies at the heart of e-commerce growth. Since today’s consumers are demanding personalised and frictionless shopping journeys, speed, convenience, security and efficiency have become the ultimate indicators of a successful e-commerce business. For the fintech industry, it has become a priority to constantly develop new and innovative ways to improve the customer experience, creating a synergistic relationship between the two industries that supports economic growth as a whole.

Ghady Rayess is the co-founder and managing director at FOO

Read: How fintech solutions can support small exporters