Technology and new payment formats have revolutionised the retail industry as cards replace cash, and e- and m-commerce provide new platforms for retail. Rather than abandoning bricks-and-mortar, many shoppers engage across several channels when making a purchase – perhaps spotting a dress on social media, then going to a shop to try it on, before returning to a website to buy it.
As the purchase journey has evolved, so has payments – with hundreds of companies competing to provide services to merchants. Since the dotcom era Visa and Mastercard have fought it out with PayPal, and other imitators, while dozens of regional payment options still thrive.
Now, as the digital era gathers steam, technology giants and start-ups are getting in on the act – increasing competition for banks and making it harder than ever for retailers and online merchants to understand which payment methods to invest in and what is going to help them drive sales.
With cart abandonment still stubbornly high a fluid, easy payment process can make a big difference. Globally, up to 75% of customers abandon their e-commerce carts before completing their purchase – a cost that could amount to several trillion dollars a year according to one source.
Merchants face other challenges too. With online transactions rising, the risk of fraud is ever-present. Selecting the right payment provider can be time-consuming, confusing, not to mention costly. And while richer data are needed to understand shoppers’ needs, many retailers still struggle to integrate analytics across the different channels and datasets.
Simply adding new payment methods incrementally can be counterproductive. When it comes to payments, a rising tide lifts all boats – consumer adoption and acceptance are critical. What’s more it can be very difficult to drive several new payment methods at the same time – wasting time and money. To help retailers navigate their way through the digital purchase maze, we recommend a three step approach to planning their strategy:
- Design the retail experience around the customer: Sounds easy in principle but in practice it means streamlining online, mobile and physical touchpoints with an omnichannel strategy – with payments at the centre and not a secondary afterthought.
- Build (convenient) payments into the fabric of every retail channel. This helps maximise the opportunity for fast, secure, low-cost transactions, and sets the template for a smoother transition between store, mobile and online retail touchpoints. An integrated payment approach should increase revenue by making transactions easier, encouraging repeat sales; and allows merchants to develop valuable new points of contact with their customers.
- Design with flexibility, agility in mind. The state of flux in payments today is likely to continue. It might never end. New technologies and innovations will continue to disrupt the buyer journey so design payments infrastructure with flexibility built-in. So, retailers can scale up, or down, the range of payment options they accept across their channels and move in-step with their customers.
With so much choice, and so much at stake the right partner is essential to help retailers navigate their own payment journey. It’s up to us in the payment industry to make sure they get there.
Interested in knowing more about creating seamless processes?
Email me Ulrike.email@example.com – Head of Product and Buisness Unit, RS2 to arrange a call to discuss how we can help your business navigate payments.