Q&A with Mark Balich: Head of Product Management, Cards at Latitude

Payment method innovation is changing retail across both digital and in-store experiences, and providers are witnessing the shift first hand. As part of our whitepaper developed in collaboration with Latitude, Demystifying Interest Free  for Merchants and Consumers: How Affordable Payment Plans Drive Sales Growth, Power Retail sat down with Mark Balich, Head of Product Management, Cards at Latitude, to discuss purchasing trends and the role Interest Free plays in a tightening economy.

Over the past decade, we have seen an explosion of payment options for consumers. What are the pros and cons of this for retailers?

I like to think there are significantly more positives than negatives for retailers. From a positive point of view, consumers are more in control than ever before, and they are telling retailers and payment providers exactly what they want. It’s up to us to
then try and meet their needs!

We’ve seen significant improvements in the check-out experience, both online and in- store, which has removed friction and driven increased sales and lowered costs. Some of the newer payment options that consumers can access have taken the
stigma away from buying items using credit. Some products aren’t even seen as credit in the customers’ eyes, removing any potential guilt from making those more extravagant purchases.

Data has become even more powerful. A lot of the new credit providers have focused heavily on leveraging customer data, allowing retailers to expand their marketing reach to unbelievable levels. The more traditional payment providers have had to quickly adapt and look at improving their products and customers’ experiences, especially in the onboarding journey which was revolutionised overnight.

On the not so positive side, arguably, there has become too much choice, with limited differentiation between all the different options and providers. This has led to both the online and in-store Point of Sale becoming cluttered. Each new technology has required some form of integration which will have taken time and resources. This impacts businesses of all sizes, but especially the smaller businesses who don’t have access to development teams as readily. Then there is all the ongoing admin and reconciliation of all the different payment providers which will have added cost into the running of businesses.

With a tightening economy, high inflation and lower consumer confidence, what do you expect to see evolve within the payments space?

Over the past few years consumers have become very resilient. We’ll probably see demand continue, but consumers will think twice before making their purchase. They’ll be asking themselves is this a ‘want’ or a ‘need’ and then they’ll make their decision.

Rather than not make a purchase, consumers might start tightening their belts in other ways. For example, they may choose a mid-range model rather than the top model, or they may look to buy a different brand if they see a potential saving. Finding a bargain or negotiating a discount will help consumers to justify making their purchase, or where Latitude can help consumers is by facilitating the purchase on Interest Free.

Whilst it can be a tough period across the country it can also be an exciting period for innovation. Driving loyalty through customer experience and service will be as crucial as ever in these tough periods.

What are the key benefits of Latitude’s Interest Free payment plans for  retailers?

Latitude believes that the power of Interest Free can be leveraged across most retail categories. Partnering with Latitude gives retailers access to 1.4 million Australians that have a Latitude credit card with Interest Free capability.

Used effectively, Interest Free can be offered to help attract new customers who have said that access to Interest Free is a driver of choice when choosing where to shop.

What retail categories are best suited to leverage Interest Free financing and why?

We like to think that Interest Free is a great solution for purchasing items across many different retail categories and many different price points.

This is why Latitude has Interest Free payment plans from 6 to 60 months. It allows customers to buy those important traditional white and brown goods such as the new washing machine, TV, sofa or laptop. Or even replace the carpets in their homes or their investment property, do their bit for the environment by investing in solar panels. But also splash out on an overseas holiday, a weekend away or treat themselves or their loved one to an item of jewellery or a spa to unwind in.

There are so many examples of where Interest Free is the perfect solution for people at all stages of life. Whether they are purchasing their first home and need furniture, buying an engagement ring, getting married and then going on honeymoon, or starting an apprenticeship and need to buy their tools or studying and need a new computer or simply need to spread the cost of their fees.

On the less glamorous side, but just as important, Interest Free can also be used for urgent dental work or fixing car problems quickly, so the owner can still get to work.

What trends are you seeing with respect to various customer segments and how they pay? For example, the consensus generally seems to be that Millennials are becoming Buy Now, Pay Later purists, while more mature shoppers still prefer credit cards. What do you know about how different customer segments like to pay for products?

Latitude has always found that Buy Now, Pay Later and credit card products are utilised by a broad segment of customers. We’ve seen customers transition between products at different stages of their lives or have utilised different products for different needs – at the heart is a customer looking for value and an easy way to make a purchase!

We don’t expect this to change, as long as we continue to ensure that our products stay relevant and continue to meet the needs of our customers by enabling them to live the lives they want to live.

It is important to continue to innovate and add value to customers. Looking for points of differentiation that aren’t easily replicated by our competition. Fundamentally we need to focus on ensuring we deliver value and a great customer experience, and we want to help enable our partners to grow by being able to talk to Latitude customers.