Latest Trends in Retail Payments Puts Consumers in the Driver’s Seat by Ernie Buday

April 11, 2019

Amid the constant reinvention of retailing, one thing remains constant: Consumers are becoming more powerful with expectations of having it all now and on their own terms. To stay competitive, retailers are shifting their investment strategies from growth via new stores to big investments in new digital-first sales models.

So where should retailers focus their strategies over the next few years to ensure long-term success?

Self-service to Keep “Me” Moving

While consumers want a choice of channels, a recent State of the Industry survey revealed that 66 percent of shoppers preferred self-service because it saves them something even more valuable than money … it saves their time. From order-ahead to self-checkout to smart returns, consumers expect fast and frictionless experiences.

Today, shoppers can enjoy the “just walk out” experience with scan-as-you-go, one-click web-like shopping and image recognition supported by multiple sensor technology and fully integrated (and invisible) payment mechanisms.

  • Zippin uses artificial intelligence (AI) and computer vision software with smart shelf sensors to track items placed in the shopping cart. The customer simply selects items to buy and then walks away having selected their preferred choice of payment with the paperless, emailed receipt option.
  • Nordstrom has self-service return digital kiosks that scan receipts, bag the item and credit the customer’s account, greatly speeding up the process and giving the customer total control.

The Rise of the Machines

The technology to create the internet of things (IoT) is everywhere and has become a catalyst for making artificial intelligence truly meaningful in the real world. According to IDC financial insights, AI is expected to become pervasive across more customer journeys, supply networks, merchandizing, marketing and commerce because it provides actionable insights to optimize retail execution.

  • Amazon curates the top selling products on for a specific demographic and geography, and then allows the pickup of those products in a brick and mortar retail setting. Payment is done through the Amazon app in store.
  • AWM Smart Shelf facial recognition technology identifies multiple physical aspects of a customer, and leverages this real-time data to target dynamic pricing, discounts and content to shoppers. The computer vision software automatically recognizes products added to the cart with all payments transacted through the app.

In a joined-up digital world where technology is ubiquitous, everything is interconnected. And so long as the customer wins in terms of intelligently targets recommendations, meaningful discounts and a more seamless and convenient retail experience, then the customer will return and invariably spend more,

From Sofa to Store to Sofa

Consumers are used to shopping from their homes, ordering from their favorite restaurants for home delivery, or scheduling a car service pick-up. This is evidenced by the growth in last-mile delivery solutions that are making the shopping experience more sophisticated and autonomous. Last mile delivery drivers are among the growing economy of gig workers that expect instant pay directly into their accounts.

  • Glympse delivery leverages location sharing technology, tracking drivers for the shopper waiting at home, and the retailer getting the curbside order ready. Add the ability to pay through the app and it becomes the hassle-free experience consumers expect.
  • Ingo Money enables fast and easy payments through their push payment platform. Consumers can transform cash, checks and ACH payments into real-time digital funds transfer for businesses and consumers.

Digital technology not only simplifies the end-to-end value chain, it fosters a mutually beneficial relationship that drives repeat business in all sectors.

Advanced Data Analytics that Surprise and Delight

Data drives the experiences that consumers want, and retailers aspire to deliver.  In a recent survey by a leading consulting firm, more than 50 percent of consumers said they would willingly share personal information to receive more personalized offers. Among the more prominent uses for real-time data and advanced analytics is real-time reward offers and real-time redemption.

  • RichRelevance creates relevant and seamless shopping experiences, leveraging AI to select the most contextually relevant personalized product recommendation across web, mobile, email and in-store based on past purchases, browsing history and shopping patterns.
  • FIS Premium Payback delivers a ‘surprise and delight’ experience at checkout by presenting the consumer with the ability to use reward points like cash on their purchases. Cardholders just swipe their rewards card at the point of sale and the price to pay automatically rolls back.

Instant gratification is a byword for modern retail as consumers look for a personalized and contextual experience with deals and discounts based on loyalty and behavior. Being able to pay for goods, fully or in part, with instant redemption of loyalty points at the POS ensures happy, regular customers. By intelligently promoting loyalty points into the daily transaction process helps keep loyalty schemes front and center in consumers’ minds and helps to guard against the risk of consumers building up enormous point totals that are only occasional cashed-in for a gift every year or so. The more engaged the customer is with loyalty programs, the more they spend; typically, consumers spend 187% more per month when reward systems are deployed.

Act Now to Stay Relevant

So, what must financial services organizations do to remain relevant?

Empower omnichannel experiences and embrace digital wallets
Financial service providers need to help retailers promote their brand and payment vehicles as contactless payments continue to expand through improving omnichannel experiences. It is important to consider all aspects of digital payments information by providing mobile wallets and the corresponding apps, such as the FIS Commerce App, to facilitate instant access to balances, controls and alerts that improve security and add value.

Create value beyond the transaction with solutions that save retailers time and money
By delivering merchant solutions that engage the end consumer more frequently, like cash-back rewards help keep retailers onboard. Financial institutions must also respond to gig workers’ needs for faster payments and other services including financing their automobile or computer. FIS’ Solutions Hub provides easy access to value-added services like these that can be customized for retailers’ specific needs.

Deliver actionable insights to your customers from their data
Overall, it is important to remove friction from real-time authentication, origination and decision solution requirements to drive increased adoption and active use across services and improve operational efficiency. The FIS Intelligence Center provides actionable insights to deliver contextual experiences, communications and personalized offers using advanced AI and machine learning, all through the customers’ channel of choice.

If financial institutions intend to maximize their role in the new retail ecosystems, they need to deploy products and services that help retailers acquire new customers while also driving increased spend based on loyalty. Afterall, the more engaged the customer the more lucrative the relationship. Modern merchant solutions will ensure financial service providers and the retailers they serve remain relevant over the long term.

About the Author
Ernie Buday, Vice President, Product Strategy
Ernie BudayVice President, Product Strategy

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