Angus Burrell, General Manager, UK, Omni-channel solutions, Valitor
2018 was a defining 12 months for the payments industry, from groundbreaking regulations such as Open Banking and PSD2 through to debit card transactions dominating cash for the first time. Yet as the ‘golden quarter’ of Christmas brought mixed results for retailers, are the latest developments in the payments industry going to make or break the next 12 months for retailers? And what further changes in payment technology are set to emerge in 2019?
Payments become unnoticed
Contactless transactions are reported to have exceeded all other forms of payment in 2018, and this trend will only accelerate in 2019 as contactless gets incorporated into more and more kinds of technology. In fact, contactless transactions are now becoming so ingrained into the consumer’s routine, that it’s almost expectant for organisations, of all sizes, to accept contactless payments. Already charities such as the Church of England are seeing increases in donations, simply from offering a contactless form of payment. As such, all organisations need to face up to the fact that consumers don’t always want to carry cash or worry about how they can pay. With just one bad experience from a payment having a knock-on negative effect on the whole customer experience, organisations need to have the right systems and processes in place.
Take going to a store as an example. A bad payments process can easily disrupt the customer experience. You are perhaps familiar with the retailer and enjoy going into their store. You browse their products and the store assistants are helpful, but not pressurising. You pick up an item and head to checkout. The customer experience then begins to deteriorate. With the self-service checkouts out of action you spend more time in the checkout queue than you did browsing clothes. Finally, by the time you get to pay the transaction takes ages to authorise. Then you are asked for your email address so the store can email you your receipt. Spelling out an email address becomes a communication challenge in itself, not to mention being asked if you mind if the store bombards you with a load of marketing emails.
In 2019, this outdated payment process will be a thing of the past. Forward-thinking retailers and organisations that value the customer experience will enable new features to allow customers to enjoy the entire shopping experience and then pay quickly and simply via store apps or mobile terminals. Customers can access in-store branded apps that act as the go-to destination for the modern shopper. You can input and save payment details, state your shopping preferences and see your shopping history so the in-store experience becomes personalised, quick and simple. No more queuing at checkouts and awkward communication with staff. In addition, AI concierge services offer recommendations, conversational support, and search and discovery options. With these solutions, retailers can transform the way people shop, creating a cashierless environment that is seamless and convenient.
DNA is the future
Another area that is set to see additional development and consumer adoption is contactless biometrically powered mobile payments. The likes of Apple Pay and Android Pay have been gaining huge traction as they are secure and easy to use, yet there is still further room for growth and development. In fact, research from Juniper Research has forecasted that contactless transactions from mobile devices will grow to 450 million consumers worldwide by 2020. With the rise of technologies such as Apple Pay and Android Pay, the question could soon become does the future of in-store transactions include cards at all?
With most consumers now having a smartphone glued to their hand, mobile payments are set to be the default payment option due to their speed and convenience. Following the advent of fingerprint scanners such as Apple’s Touch ID – which have now become a familiar part of the payment process – consumers are increasingly becoming accustomed with using parts of their body to authorise transactions. The latest introduction of 3D facial recognition will further the steps along this path and drive the use of biometric mobile payments.
In the future, as our DNA becomes the ultimate authenticator for our purchase, the likes of facial recognition will lead to customers becoming familiar with secure transactions and interested in purchasing big-ticket items that extend beyond the £30 limit that exists on contactless cards. Due to the rise in contactless payment methods, it won’t be surprising if acquiring banks are soon to raise the £30 limit. As a result, retailers who previously sold items beyond the £30 limit will need to ensure that they and their staff are ready and aware that they can handle transactions and sales from mobile devices – or risk losing customers to competitors who do.
Standstill and risk going backwards
It is clear that the payment landscape is constantly evolving and changing. New technologies and consumer habits are shaping the payment industry creating a constant battle for businesses to stay up to date. Right now the use of biometrically enabled mobile payments is the newest trend, offering security without impacting the customer experience. However, payments processes need to be constantly evaluated in order to maintain a strong customer experience. Creating in-store apps that become the foundation for the entire shopping experience, from product recommendations through to a one-click purchase will enable retailers to offer a highly personalised customer experience that is accessible on any channel. Seamless payments are therefore central to this omni-channel model.