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July 25, 2018
São Paulo, 25 July 2018 – Research from Worldpay, conducted by Opinium, has revealed that more than half (53%) of Brazilian consumers that have access to the internet are willing to embrace drone technology to deliver their purchases. This enthusiasm shows great potential for new business opportunities, which is why researchers at the company are investigating the use of drone technology to help combat the growing issue of parcel fraud. The payments processor has unveiled a prototype design that could help pave the way for drone delivery around the world.
Worldpay’s Drone Pay proof-of-concept uses EMV contactless* payment card technology to verify the identity of the recipient, ensuring a parcel is delivered to the right person at the right address. This technology is embedded into a drone landing pad, which is issued to the customer in the form of a doormat. When the drone lands to drop off the package, the card details embedded into the doormat are read automatically. If the card details embedded into the pad match those of the correct recipient, the parcel is released.
The growing popularity of online shopping in Brazil has increased the volume of delivery, which is expected to reach R$ 29.6 Billion by 20221 and this is driving expansion in multinationals such as DHL Group, FedEx, Nippon Express, and UPS, and the state company Correios. In 2017, the Brazilian eCommerce market had an increase of 7,5%, with a revenue of 47.7 billion reais (USD 14 billion), and should continue to grow by 12% to 53.5 billion reais (USD 16 billion) this year2. However, a natural consequence of this growth has been the rise of online fraud.
Worldpay’s prototype demonstrates how drone technology could help retailers provide a better ‘last-mile’ experience by offering a more reliable proof of delivery. Recent research by the payments processor reveals a strong opportunity for use of drones in Brazil to deliver purchases and collect items for return, in addition, creating more jobs, considering management and control of new equipment. Almost half (49%) of Brazilians recognize that robots and drones could provide more employment opportunities in the future. The market also suggests that it is ready for drone delivery as more than 40,000 drones are legally used in the country3. By using drones for deliveries, merchants could offer a variety of payment methods. This would help potentially reduce the rate of 63.4% of Brazilians that have abandoned their online shopping cart due to long estimated delivery time3.
The elderly population are more welcoming to new technologies in Brazil. According to Worldpay’s research, 62% of people over 55 would have a drone collect items for return, compared to 50% of those aged between 18 and 34 years. The data is higher than mature countries such as UK (37%) and the USA (40%), for consumers older than +55.The research found that although 34% of Brazilian consumers feel enthusiastic about using drones in future. This suggests that merchants are well positioned to offer differentiated services through eCommerce and could help to increase Brazilians confidence in drone technology.
According to Juan D’Antiochia, Worldpay’s General Manager for Latin America, Brazilian consumers are open to new technologies and the market needs to drive trends to offer safer and innovative delivery options, such as Drone Pay, to expand the methods of payment.
“There is undoubtedly a huge potential market for drone delivery when it becomes a reality. Along with cost cutting benefits, drones could also be the answer to reducing congestion and pollution, and enabling faster delivery times. Our data suggests that consumers are becoming increasingly open to the notion of drone delivery, but there are still several logistical hurdles that need to be addressed before it becomes mainstay. The weight of the package and flying distance both remain potential barriers to adoption, in addition to ensuring that parcels are delivered to the correct customer”.
“This is where payment technology will play an important role. By verifying the identity of the recipient before releasing the parcel, our proof of concept is an example of how technology can address the common problems associated with home delivery. The volume of parcels in transit will only increase, as shopping online increasingly becomes the channel of choice for Brazilian consumers. Merchants should therefore explore new ways of innovating their supply chain capabilities, to keep pace with demand,” concludes Juan D’Antiochia.
You can watch a demo of the proof of concept here: http://bit.ly/2LE912E
* EMV stands for Europay, MasterCard and Visa, and is a global standard for credit and debit cards that uses computer chips to authenticate (and secure) chip-card transactions.
The research was conducted by research house Opinium in June 2017 and interviewed 20,000 consumers across 10 countries on their opinions in relation to the Internet of Things (IoT), specifically how comfortable they are with the concept of drones, and whether they would be happy to allow these machines to deliver parcels or collect returns. In Brazil, 2.014 people were interviewed between 16-21 June 2017.
Drone Pay is a prototype technology developed by Worldpay’s innovation team to understand how payment technology can be used to create more secure delivery and fulfilment for online retailers, whilst also adding an additional layer of buy authentication. The proof of concept uses EMV contactless payment card technology to authenticate the identity of the recipient. The technology is drone agnostic, and simply clips onto the drone model. The original drone remains unaltered.
Worldpay, Inc. (NYSE: WP; LSE: WPY) is a leading payments provider with unique capability to power global integrated omni-commerce, any payment, anywhere. With industry-leading scale and an unmatched integrated technology platform, Worldpay offers clients a comprehensive suite of products and services globally, delivered through a single provider.
Annually, Worldpay processes over 40 billion transactions through more than 300 payment types across 146 countries and 126 currencies. The company’s growth strategy includes expanding into high-growth markets, verticals and customer segments, including global eCommerce, Integrated Payments and B2B. Worldpay, Inc. was formed in 2018 through the combination of the No. 1 merchant acquirers in the U.S. and the U.K., Vantiv, Inc. and Worldpay Group plc. Worldpay, Inc. trades on the NYSE as “WP” and the London Stock Exchange as “WPY.” Visit us at www.worldpay.com/global
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