The future reimagined

The Next Big Thing(s) in Payment Services

Future of Growth

Written by Raine Westerholm

Excellent customer experience is key but in ecommerce and other kinds of online transactions there are a few bigger bottlenecks related to shopping online, making payments and identifying people that need to get solved to ensure smooth operation for everyone in the digital dimension.

Posti is well-known for moving things – parcels, letters and everything in between – from A to B. Be it B2B, B2C, C2C or any combination or amalgam of these, we are really passionate at getting things where they need to be. But did you know that we are also very much involved in what enables things to move in the first place? Normally, the key enabler to start the process of moving is the payment for the things being moved. This is exactly what I am working on at Posti as our Head of Payment Services, and since lots of interesting changes are taking place in the payment space, I thought I would take a moment to share a few of them with our beloved readers.

You’ve Heard it Before, And You’ll Need to Hear It Again: Customer Experience is Everything

Ecommerce experienced rapid growth with the lockdown period, and even though some ecommerce companies may breathe a sigh of relief since their sales have gone up as customers have stayed home, what will happen after the pandemic is over? Will ecommerce companies keep up the new sales levels, or will they drop back to pre-pandemic levels? 

Well, in my opinion, the ones that can really tie together the end-to-end customer experience from finding the right product for checkout and delivery processes, are the ones that will win in the end and keep their newfound customers even after the coronavirus has hopefully been defeated. People will now buy things online from where they happen to find them, but they will keep shopping at the web stores that were the easiest to use.

One possible bottleneck in the payment phase of any ecommerce customer experience may be the eventual roll-out of the Payment Services Directive 2 (PSD2) that will add Strong Customer Authentication (SCA) when, for example, shopping online. This directive is actually already in effect at the time of this writing, but the European Central Bank revised the original deadline and moved it to the end of 2020. Either way, time is running short with implementing the new rules for online payments in the EU, and the best executions that follow the directive will make sure that customers are not getting frustrated at checkout.

I think that the ecommerce players who will keep their new customers after the coronavirus pandemic, and are ready for PSD2, are the ones that take offering a smooth customer experience seriously – and will turn out to be the winners in the end.

Everyone Deserves One-Click Payments

To make sure that customers get to experience smooth shopping online, we at Posti strongly advocate for making the checkout process as effortless as possible. According to a study from Baymard, 70% of purchases are stuck in the shopping cart and 23% out of those can be chalked up to the checkout process itself. After all, if the sale doesn’t go through because of the not-so-great checkout process, we won’t have anything to deliver to and from our customers! One way to make sure the checkout process is effortless is to boil down the process into the simplest form possible.

This is why we are really excited to work on a service that will enable quick and easy one-click payments for our ecommerce customers. We call it Pikaosto in Finnish (we call it Posti Checkout in English) and the way it works is that we will combine consumer data such as name, shipping address, preferred payment method and other relevant data from our consumer customer’s profile, and securely pass that information to our ecommerce customers who set up our one-click purchase button on their webstores.

It is a small button on an ecommerce storefront but potentially a giant leap in terms of creating a smoother payment experience, improving ecommerce conversion and of course, getting more sales for Finnish ecommerce! By the way, we are looking for pilot clients for our pilot program’s round 2, so please sign up here if you are interested.

Digital Identities Allow Faster Movement Online

One really significant improvement in our horizon has a lot to do with the ease of shopping and making use of services online regardless of the shop or vendor. For example, in the physical world we can effortlessly go to any shop or use any service and are able to pay securely and by proving who we are with our ID cards, driver’s licences and passports. Next, we would need to find a way to do the same in the digital world.

Instead of trying to remember dozens of login credentials to many different shops, websites and services, we would need to improve the whole process of going about one’s business online. That improvement we are looking forward to is called a digital identity. Just like your ID card already proves that you are you in the physical world, a digital identity app or solution will enable you to use services, sign-in to accounts and buy things online with one hold-all way to prove your existence. Think ‘one-click buy’ but by one order of magnitude: wherever you go online, whatever you do that requires any kind of login, all in one secure solution.

There are, in fact, many approaches to this from commercial banks and their ID-apps as well as governments with their digital identity initiatives, but it is yet unclear which approach will emerge as the winner. I for one am hopeful that whichever will be the winning solution, that we will find the winner quickly, because the world needs an easier way to identify users online to enable smooth and secure payments, i.e. enabling things to move effortlessly.

In any case, once we start seeing promising approaches for passport-level online identity management, I am sure that this will help ease lots of the questions in the minds of online service providers and ecommerce players, because a secure and standard online identity would immensely help businesses and consumers alike. Businesses could focus on improving and growing what they know, instead of focusing on fixing technical – or legislative – bottlenecks and consumers could go on about their needs instead of trying to remember which login and password did I use for this webstore again?

So, here are a few larger phenomena that we at Posti’s Payments team are looking forward to in the future – hope to see you there very soon!

Are you as passionate about solving large scale problems as we are? If yes, you could fit in at Posti quite nicely! Check out our open positions here and get in touch with us.

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