Industry
Banking
Banking Services Transformation: Unlocking Exponential Value
Solution
Sustainability Services
Ecosystem-led Approach to Power Your Sustainability Strategy
Highlights
- Banks and financial institutions are always looking for new growth avenues and digital receipts is one such opportunity.
- By building a digital receipts platform and offering it as a value-added service, banks can enhance hyper-personalization, increase cross-sell and upsell, and improve customer engagement.
- Banks must adopt blockchain and artificial intelligence technologies to operationalize a digital receipts platform.
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Why digital receipts
A printed receipt or an invoice is usually issued by merchants and service providers to their customers, when they pay for products and services.
While printed receipts are primarily helpful as proof of purchase for getting refunds or resolving disputes, they are of little value beyond this. Additionally, issuing paper receipts for each and every transaction is a cost to merchants and service providers. Most important, they leave a carbon footprint on the planet, adding to the environmental burden. For customers, preserving paper receipts can pose difficulties as they tend to get misplaced or the print fades.
Switching to digital receipts will therefore be a win-win for both merchants and customers. A digital receipt is proof of payment issued through digital modes—either email or text message—to customers when they make a purchase or use a service. Digital receipts can also be uploaded to a customer’s mobile banking app. For merchants, digital receipts make business sense as they mitigate costs and enable them to capture the email IDs or mobile numbers of customers, making it easier to enroll them in loyalty programs and gain insights on purchase patterns. Additionally, digital receipts help merchants to go paperless and minimize environmental impact, taking them a step closer to achieving their sustainability goals. Customers also benefit from the easy storage and retrieval features of digital receipts as well as the ability to manage and track spends, either on their own or through tools and apps.
For banks, digital receipts offer unparalleled opportunities to increase customer engagement, enhance customer satisfaction and loyalty through hyper-personalization, and drive cross-sell and up-sell, in turn elevating their brand. Offering it as a value-added service will also create a new revenue stream for banks. The exponential proliferation of digital and online payments is driving the growth of the digital receipts market, which is expected to touch $293 billion by 2030, registering a CAGR of 7.5% during 2024-2030.1 Though the business case for the adoption of digital receipts is clear, the financial services industry is lagging behind in making the most of this opportunity.
A new hunting ground
Banks are yet to tap into the digital receipts opportunity.
To facilitate the shift to digital receipts, merchants and service providers must either build the digital platform in-house or partner with a vendor. However, to successfully implement digital receipts, merchants and service providers should have access to customers’ email IDs and/or phone numbers. This can pose challenges as customers are often unwilling to share contact details with merchants and service providers. And here’s where banks and payment service providers can step in. With access to customers’ email IDs and phone numbers and with payments standardization and digital technology implementations, banks are in an advantageous position—they can leverage this information to build a platform and become a digital receipts service provider to merchants.
Let us now examine how the digital receipts paradigm will function in the business-to-business (B2B) and business-to-consumer (B2C) contexts (see Figure 1). In a B2C context, the bank can leverage the data in the receipt to craft contextualized offers, issue coupons that can be auto-applied or redeemed during the next purchase, enhance cross-sell and up-sell, and expand customer base. A digital receipts platform can facilitate a shift to the ecosystem model where banks can orchestrate an ecosystem of cross-industry players, enabling customers to buy a variety of products and services. For merchants, the platform offers the opportunity to design personalized offers and bundle it along with the digital receipt.
Figure 1: Digital receipts in a B2C context
Banks can extend the digital receipts platform to the B2B segment also comprising small and medium enterprises (SMEs) and micro, small, and medium enterprises (MSMEs). In a B2B context, a digital invoice is generated when a business sells goods and services to another business enterprise (see Figure 2). Integrating digital invoices into the digital banking portal allows banks end-to-end visibility of purchase orders and invoices, and as a corollary the entire supply chain, which can also help drive customer acquisition. Banks can leverage this data to proactively offer financial assistance to pay for the purchase as well as extend working capital loans. Using invoice data, banks can estimate the accounts receivables of their customers, enabling invoice factoring to improve cash flow, which is especially important for the micro, small, and medium enterprise (MSME) customer segment given the challenges they face in raising capital.
Figure 2: Digital receipts in a B2B context
Once a bank operationalizes the digital receipts platform, we envisage four scenarios that will play out, allowing it to gain visibility into abundant purchase and sales data which can be leveraged in a variety of ways to create new value.
- Scenario 1: When both merchant and buyer are customers of the bank: Existing merchant and corporate customers can leverage the digital receipts platform to generate the receipt or invoice and subsequently share it with their customers (buyers) on the mobile banking app.
- Scenario 2: When only buyer is a customer of the bank: Buyers or customers can upload the digital receipt issued by any merchant or corporate entity on the mobile banking app.
- Scenario 3: When only merchant or corporate entity is a customer of the bank: The bank can leverage the platform to access purchase and sales data in the digital receipt or invoice.
- Scenario 4: Neither the merchant or corporate entity or the buyer is a customer of the bank: The bank can offer the digital receipts platform as a new service to attract new merchants and corporate entities.
The key challenge in obtaining data in all the above scenarios, especially in the third case, is the multiple formats in which data is captured and the presence of unstructured data. Further, each merchant may label the product or service differently, making it difficult to accurately interpret and categorize the product or service. Another important aspect that banks must keep in mind—consent formalities must be fulfilled before storing and accessing customer data. Merchants can also share anonymized or actual data covering purchases with the bank through an application programming interface (API) framework.
Role of technology
Technology will be the foundation of the digital receipts platform.
Banks must consider leveraging blockchain and artificial intelligence (AI) technologies, especially as AI, specifically GenAI, can facilitate faster adoption of digital receipts. GenAI offers the capability to extract information from receipts that are unstructured, follow varied formats, use different languages, and come in different forms such as images or PDFs. In addition, GenAI, can help classify and organize data for quantitative analysis by recognizing patterns.
Blockchain technologies can also be leveraged to issue digital receipts in a programmable and tokenized form. For example, say, a customer buys groceries from a retailer. Now, suppose the retailer wants to increase the sales of high margin products, especially a specific brand, as well as track consumer behavior. A programmed offer can be embedded in the digital receipt issued by the merchant for the purchase of groceries. Subsequently, when the pre-conditions for payment are met, the payment can be auto-executed during future purchases by the customer. Adoption of technology to create such novel services will change customers’ perception of banks—they will be seen as tech-savvy which will help attract GenZ customers who prefer technology driven financial services.
The platform
Establishing the digital receipts platform will require banks to keep several factors in mind to ensure hassle-free implementation.
To operationalize the platform, banks and payment service providers must:
- Conduct detailed assessment to understand the impact on the bank’s systems, processes, and digital infrastructure.
- Identify and adopt the right business and revenue model to benefit all the stakeholders.
- Collaborate with other stakeholders in the ecosystem such as retail merchants, SMEs, MSMEs and others to establish common standards for digital receipts. Financial institutions must consider adopting global or regional standards such as the European Union’s (EU) EN 16931 standard for electronic invoices, which will improve customer experience.
- Establish an API framework to enable the digital receipts platform to interact with various components in the ecosystem and facilitate seamless service to businesses and customers. In addition, APIs should be put in place to enable merchants and businesses to share receipts and invoice data with banks.
- Integrate the platform with systems required for customers to make payments as well as expense management tools for categorization, customer approval workflow, loyalty programs, accounting reports, reimbursement, and tax compliance.
- Ensure integration of the platform with merchants’ point of sale applications and customer relationship management (CRM) systems. Ensure integration with the internal systems of SMEs and MSMEs as well.
- Build the technological capabilities required to tackle digital receipts that are in different formats. This may necessitate working with technology partners to create customized solutions.
- Lay down stringent security measures given the digital receipts platform has to handle sensitive customer information—consider adhering with the ISO 27001 standard for information security to protect against data breaches.
- Enable cloud secure storage facilities for customer and merchant data including consent management documents.
- Invest in marketing campaigns to promote adoption among merchants, SMEs, MSMEs, and customers.
Looking ahead
Undoubtedly, digital receipts have huge untapped potential.
Banks will benefit through new revenue streams, opportunities to deliver superior, hyper-personalized customer experience, and elevated brand perception. The merchant, SME, and the MSME segments will move closer to greening their operations and achieving sustainability goals.
With increasing customer preference for digital-only experiences, banks and financial institutions would do well to explore this opportunity. While operationalizing it may come with its own pitfalls, the rewards of superior customer engagement and avenues to create new business value will far outweigh the effort.
References
1IndustryArc; Digital Receipts Market Overview; April 2024; Retrieved February 2025; https://www.industryarc.com/Report/20073/digital-receipts-market.html
