A new trend already happening in the East, is quietly emerging in the West. WeChat a text messaging app in China, enable merchants, businesses, entrepreneurs, vendors, service providers and others to accept payments from customers right inside the messaging window for different types of products and services. What are the benefits? Buyer no longer have to leave the messaging app and waist time to perform a traditional payment somewhere else and seller can take the payment the second the customer makes the purchase decision. Solving this problem speeds-up the payment acceptance process in moves money faster to the merchant’s bank account and makes paying way more convenient for savvy smartphone customers.
In the first-quarter of 2018, at TrakGo (www.trakgo.com) we are planning to launch our proprietary free app – iPhone-only for now “commerce messaging” app for businesses and customers.
An example of what happens when chat and payments are not combined together. During the Rio 2016 Summer Olympic Games, tens of thousands of foreign visitors relied on WhatsApp as their primary communication service on the ground . Some foreigners held back on ordering some Game tickets, events and other services until they touched down in Rio. Simply because of the trust factor of sending a lot of money in advance to an unknown company or individual. Of course, the basics like accommodations, transportation and Olympic tickets were secured before arrival, but there was a surge in demand for more tickets, events and other services as the trust factor reduced.
The big problem came when trying to pay for new services or adding additional Game tickets, making it ten times more problematic to execute a simple purchase transaction from your smartphone. Customers were running around to ATMs, not able to get enough cash from one machine, they had to wait until the next day to send a bank wire to a tour company or concierge service, disrupt their schedule to go back to the hotel or apartment to make a PayPal payment.
In other countries, buyers and sellers rely on messaging apps to connect, negotiate, take orders, respond to customer inquiries, share photos of new products or services and close deals in real-time. The same pain-point comes when its time for the buyer to make the payment. This is a common problem in many countries, developed and developing, whereby sellers are being forced to send the buyer outside of the messenger app to perform a traditional payment the old-fashion way (i.e., via another payment app, online payment, bank wire or in-person). This makes no sense, it requires the customer to take take more steps, its time-consuming and unproductive.
In today’s digital economy, we have instant text messaging between family and friends, so why not for buyers and sellers in a single messaging app, dedicated to commerce messaging? Why is the US still behind China in this regard?
WeChat of China, has closed the commerce messaging friction gap and is generating billions of dollars in per transactions fees on its very popular messaging platform . Conversely, it does not mean businesses in the West are not beginning to leverage the power of instant messaging. We are starting to hear more noise in the press, how mobile messaging strategies by US companies are going to get implemented. In 2018, I expect an uptake fueled by businesses wanting to drive a deeper engagement with customers to spark more demand. One reason, is because text messages open rates to recipients are seen three times faster than email and are free.
Furthermore, 85% of the 83 million millennial’s (the largest demographic group in the US) communications are done via text messaging apps. Merchants in different veticals, small businesses, enterprises, vendors and entrepreneurs will have no choice, but to meet young people at the intersection of how and where they prefer to communicate. Otherwise, they risk losing them to their competitors.
As text messaging moves towards center stage in the West and takes the spotlight, as an alternative go-to channel for faster communications for buyers and sellers, I project the commerce messaging gap to also close in North America.
Like Bitcoin, in its early days, not many people are paying much attention to the idea of commerce messaging as an up-and-coming communications channel to legacy systems, such as email and phone. But make no mistake, its coming and countries like the US and Brazil will help it grow. The beauty of the business model, it’s already proven, just look to the East at the phenomenal growth of WeChat in China.