• Andrew Marshman , Senior Account Executive at ACI Worldwide (EMEA)


• 07.02.2019 08:45 am
undisclosed

Despite payment vendors continuing to develop strategies for omnichannel, it is still a moving target.

But it is essential to get it right. The best vendors offer solutions that allow for a single cloud payment service that creates a single view of the customer across both stores and digital channels. Top retailers use these solutions to offer customers efficient cross-channel shopping experiences. Yet some retailers still take an isolated approach, but rarely dominate their market as a result.

Will retail evolve a single payment channel?

Amazon Go offers a seamless shopping experience through sophisticated video and recognition technology, while other leading retailers are developing ‘scan-and-go’ systems; digital payments are slowly becoming in-store payment methods instead of a separate channel. Although still early in this shift, payment terminals will ultimately disappear and be replaced with customers using their own devices to pay – or no device at all. “Frictionless” methods of payment, a common buzz word, aim to make in-store payments as smooth as possible until customers enjoy a “shop-lifter experience”.

Although there is still a way to go and the cost of infrastructure to deliver an Amazon Go-like customer experience can’t be ignored, the digitisation of in-store payments puts the industry on the right path. Consequently, a new term has gained popularity – “phygital” – where retailers must think digitally when evaluating ways to accept payments in physical stores. Alternative payment methods have been an eCommerce trend for many years, but it has begun to enter the physical retail space, thus merchants must accept these alternative methods in addition to conventional cards.

There have already been developments in this, such as PayPal ending its older in-store payment services. But only looking at the card-dominated North American and European markets can obscure the pace of change and the global impacts of this trend. Alipay, perceived as a “lifestyle super app” instead of an alternative payment method, is the most frequently cited example. Alipay is increasingly becoming accepted beyond China, from fashion houses in Paris to bus tours in South Africa. Growth markets unhindered by the legacy of card payments will acclimatise to the “phygital” culture quicker, but shifts are entering the mature markets too.

Combining payment methods to accommodate for the growing world of payment options

To respond to this developing trend, vendors need to focus their IT payment strategies on cloud-based payment services that can process in-store terminal payments in the same way that they process digital payments. To achieve this, they must use the same platform, identical levels of service, identical payment types and shared tokens. This allows them to take payments from shoppers whenever they need to in an ever-evolving connected world of payments. However, those that see digital payments in a different light to in-store payments will struggle to meet this challenge and have to deal with the consequences, all while surviving in one of the most competitive industries there is.