Retail Customer Experience: A look at the American retail payment revolution
Chris Kronenthal, president and CTO of FreedomPay, explains why digitization is here and here to stay when it comes to consumer payment and why it will continue to lead the drive to the future in the retail payments marketplace.
There is an ever increasing shift by all retailers, in the U.S. and internationally, both pre- and post-Covid to focus on technology to get ahead in a highly competitive and rapidly evolving marketplace.
Out-dated legacy systems hinder any international retailer’s attempts to get ahead through undesirable friction in the system, a hampering of innovation and growth and, not so good, old-fashioned fraud.
The payments space is now dominated by a “race to digitization,” to address two driving factors in particular. Firstly, today’s retail customer is obsessed, and rightly so, with their entitlement and expectation around the flexibility and options available within their purchase experience.
Secondly, the rapid increase in “card not present” transactions has unfortunately seen an explosion in fraudulent activity. Both online and digital transactions are suffering from the fall-out associated with fraud and the biggest single countermove to reduce, if not eliminate this, is the adoption of the latest and most secure technology within the retail payment chain.
Retail consumer behavior has undoubtedly changed and become much more digitized, not simply as a reaction to the COVID-19 pandemic keeping people off the high street, as evidenced by the massive adoption of such leading pre-COVID market disruptors as Uber, Amazon and Airbnb.
While there is no substitute for well-built payment tools, they also need to come with differentiators and brand identifiers. The retail customer’s experience will drive the consumer’s decision making. Every payment provider, and their product/service should of course be competent and fit for purpose, but those that deliver a “value added” experience will win out in the end.
The rapid adoption of open banking, in Europe in particular, and the growth in pre-paid, or ‘buy now pay later’ options unlocks even further the value of loyalty programs . Consumer recognition, such as QR codes, will also continue to grow exponentially in the world of retail. The question is how to optimize these trends and make tangible benefits from them. Pre-paying and “personally recognized” customers are generally much more loyal to the retailer in question and this is the key to longer-term success.
So, technology is definitely driving buying and payment trends as much as the other way round. Ultimately, whatever system being used needs to work seamlessly, safely and with as much value-add as possible to differentiate it from its rivals. In the post-Covid world this will certainly include such personal consumer (and staff) safety components as being ‘table safe’, germ-free, non-contact etc.
Digitization is here and here to stay; it will continue to lead the drive to the future in the retail payments marketplace. Early adoption and a willingness to adapt as quickly as the space evolves will be critical to any retailer’s long term strategic success.
Chris Kronenthal is president and CTO of FreedomPay.
Read the full article on Retail Customer Experience here.
FreedomPay published a White Paper The American Payment Revolution: Next Level Commerce which is designed to help merchants of all sizes understand the need for technological advancement at the point of sale and why businesses should respond to the catalyst of change caused by COVID-19 to enable America’s economic recovery. Click here to download the report.