E-CRM in Digital Payment Services: Its Role and Proposed Framework for Adoption

Introduction

In the recent past, multiple factors have led to the adoption of online processes by organizations. One compelling factor was the emergence of the pandemic Covid-19 that forced a massive disruption in various ways, affecting human lives in totality. But even before the pandemic, other factors were resulting in the rapid adoption of electronic transactions. These factors are, “consumer behavior, emerging technologies, competition, as well as regulatory push” (Nair & Prabhu, 2018). Payment method is an extremely significant process for any business, that traditionally relied on cash but has seen a paradigm shift to digital methods. Apart from various other benefits such as speed, convenience, cost-effectiveness, and development of safe technology, digital payments proved to be a panacea during the pandemic. It allowed customers to operate without contact, minimizing the need for physical interactions. Several contactless payment methods such as e-Wallets, peer-to-peer transfers, customer-to-business payments, mobile payments, etc. gained wide acceptance when the exchange of cash was discouraged. As a result, the digital payment industry has seen a sharp rise with a projected CAGR of 15.4% from USD 88.1 billion in 2021 to USD 180.2 billion by 2026 (Markets and Markets, 2021).

The growth of digital payment services is a disruptive phenomenon as it has impacted every type of industry in varying degrees. It has been seen that the use of digital payment as an innovative strategy boosted the growth of many companies across the world. Many studies have highlighted the role of digital payments at various levels and strata of the economy and society. Such an upscaling of digital technology means more demand for improved solutions and more space for competition within the digital payments industry. The payment services have now taken the form of a “commodity” with consumers demanding higher value. FinTech companies have been mainly responsible for this dramatic upheaval in payment technology. This change was a boon to the Generation Z individuals who are more accustomed to modern technologies. It was also adopted by business firms because it brings strategic benefits in the form of, “better inventory management; improving customer satisfaction; improved cash flow; minimizing theft of cash; accuracy in recording” (Emergen Research, 2022). Further, government policies have also been favorable to the switch to cashless transactions.

Customer relationship management is, “a business approach that integrates People, Processes, and Technology to maximize the relations of organizations with all types of customers” (Hoda, 2010). The core function of CRM is to integrate data from various channels to, “sustain and enhance customer relationships” (Rostami et al., 2016). The various benefits of an effective CRM accrue in the form of revenues, profitability, and overall business growth. Industries that are characterized by “high value per client and greater availability of customer data” are said to benefit more from CRM. The banking and financial services industry has long been using CRM. It plays a significant role in the overall value creation by providing a better insight into the customer buying preferences and factors of satisfaction.

As a result of the advances in database technology and the availability of various communication media, electronic customer relationship management (e-CRM) has been adopted in different industries. Electronic customer relationship management (e-CRM) is, “a management strategy that combines marketing with information technology to gain customers’ satisfaction” (Rao, 2013). While the traditional CRM used phones, distribution outlets, or fax, the e-CRM is characterized by the usage of the latest communication technologies such as e-mails, social media, etc. (Al-dmour et al., 2017). Traditional CRM is more human and based on a personal approach, whereas e-CRM is completely technical and adopts advanced ICT tools to achieve customer satisfaction and increase loyalty (Bhatnagar & Saxena, 2013). Electronic customer relationship management improves and increases the relationship between the company and its clients by creating and enhancing customer relationships through new technology.