What’s “In Store” for Payments?

Ralf Gladis, CEO & Payment Service Provider at Computop

29.11.2017 09:15 am

Imagine a time when you walk into a shop to do some shopping, and there are no sales staff, no tills and no way to pay with cash. That may seem futuristic, but some of these things are happening at the present time, with a view to being the stores of the future.

For example, some companies in China are looking to revolutionise retail by taking advantage of e-payment technologies. One, Bingo Box, is offering unmanned convenience stores that require a mobile app to enter, and then you pay at a self-service checkout using a mobile wallet like Alipay or WeChat.

Chinese retail behemoth Alibaba is offering a “smart” pop up café called Tao Café, where customers can order snacks by voice and automatically pay when exiting the store through a smartphone app.

And, launched not long ago, Mobymart is a 24-hour, unstaffed, currently remote-controlled, cashless mobile shop. Scanning a QR code to enter after registering for its mobile app, shoppers are able to scan barcodes on products they want and pay for them with their phones. While the technology has not been perfected yet, it shows where shopping could be headed in the future.

What these all demonstrate is consumer craving for convenience and efficiency when it comes to shopping and payments. With that in mind, what’s in store for payments in the coming year and beyond? Following are some thoughts:

More Convenience, but not at the Risk of Security

As shown, convenience appeals to consumer wants and needs. As a result, the next ‘Killer App’ in the payments sector will be tied to convenience. While, technically, convenience itself can’t be an app, whomever best captures true consumer convenience will become the next significant disruptor of payments. We’re already seeing user names and passwords replaced with biometric authentication like fingerprints, face and voice recognition. Biometrics technology is evolving all the time. It’s becoming faster, more secure and reliable. We can’t forget a fingerprint and we won’t have to type in complex passwords on small touch screens anymore. That’s a compelling offer for consumers. But we must ensure the technology is secure.

Use of IoT Grows, but Trust is Necessary

The Internet of Things (IoT) is fast becoming a reality. Both small and large devices will soon process payments for us. Our cars will automatically pay for fuel and parking fees, our smartwatches will pay for taxis and our smartphones will prove to be a universal tool to buy and pay everywhere. With that scenario in mind payment will have to become a silent, smooth and automatic process. Only payment methods that support this will have a future. We need established payment brands that consumers already trust. How do you want your car to pay for fuel? Credit card, PayPal or your company’s’ fleet card? Handing that process over to our devices will be a big change in consumer behaviour. New payment brands with no history or trust would keep consumers from embracing new technology and would slow the process down. Established brands will probably make the decision easier.

More Payments Through Virtual and Augmented Reality

The leisure, hospitality and retail sectors are all looking for opportunities to commoditise virtual worlds with virtual shop shelves, augmented and 3D product views. These technologies can provide real opportunities to bring visual representations of goods more in line with their physical reality -- a particular plus for mail-order and e-commerce companies. Applications like these open up new possibilities for online purchases, but also present new challenges at the checkout: entering billing and delivery addresses is far from plain sailing in a virtual space and media disruptions are to be expected. Straightforward navigation and easy shopping also call for simplified payment processes. One-click buttons are becoming more and more prevalent. By positioning them in the shopping cart or even at item level, innovative payment schemes are hoping to appear on the screen as early as possible in the payment process and stay one step ahead of other payment schemes. And, at the same time, the customer benefits as the payment process becomes easier for them.

Alibaba is ahead of the game with VR Pay, which allows virtual reality shoppers to browse through virtual reality shops and malls and pay for things simply by nodding their head. Shopping identity is verified through authenticated account logins on connected devices with passwords, or using voice identification technology designed to recognise unique voice patterns of a person. Whether you’re a fan of virtual reality or not, what’s clear is that virtual reality is by no means simply the stuff of movies. It will become a new sales channel. Businesses, and the payments ecosystem supporting them, must transform in order to offer safe and easy to use virtual shopping experiences for customers.

Increase in Instant Payments

We are starting to see evidence of the rising popularity of bank accounts for payments due to the introduction of Faster Payments in the US and UK and Instant Payments in Europe. These make it much faster, easier and more convenient for consumers to send money from account to account. Historically in Europe, with 28 member states and just as many banking systems, it had been difficult, expensive and slow to transmit money between countries. However, with SEPA Instant Payments announced for 2018 it will be easy, fast and cost-effective to send money to any European account within 10 seconds, 365 days per year. Being able to process European payments instantly from account to account will be a big leap forward towards a cashless society. However, without complete consumer trust in data privacy, it will still prove impossible to replace cash altogether.

It’s clear that payments are continually evolving with a view to meeting consumers’ desires for streamlined processes. However, what is also evident is that until security and consumer trust are properly addressed as part of this evolution, it may take some time for all of these things to become a reality.