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Retail Reinvented: Making The Most Out Of Payments

The role of payments in the retail industry has shifted dramatically in recent years. What used to be a means to an end is now a crucial part of the entire shopping experience — one that can drive conversions and loyalty if done right.

There are numerous opportunities around an experience-led payments process, and most advanced retailers are now placing a strong focus on the role of payments as a point of differentiation. By enabling their customers to pay in-store and online in a way that best achieves that sought after ‘frictionless’ process, these retailers are positively influencing the number of satisfied customers and completed customer journeys.

Following are tips for retailers to successfully reinvent their payments experience and ensure they stand out from the competition.

An experience-led payments process drives loyalty: Although a slick, quick and easy checkout experience has always been the aim for retailers when dealing with in-store customers, they have often struggled with recreating the same experience online.

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Today’s world is dominated by “always-on” connectivity, heightening consumers’ expectations. Store hours are now a thing of the past, replaced by a demand for anytime, anywhere payments. Retailers must continuously satisfy these demands with quick, seamless and secure payments across a wide array of channels. While clunky, lengthy processes may meet retailers’ demands for security, they do little to satisfy consumers’ need for convenience and ease of use. On the other hand, too little security will damage the customer relationship and longer-term loyalty, so finding the right balance is key.

Retailers that are able to strike this balance will create more loyal customers, while those that don’t will risk losing sales and shoppers to competitors that can deliver simpler, more positive customer experiences.

Technology can creatively satisfy customer expectations: The rapid evolution of technology gives retailers the ability to quickly reinvent themselves to meet customer demands. It enables them to serve their customers much more efficiently, personalize offers for them and sell to them in a global market. This innovation can come in many forms, including the building of seamless omnichannel payments, the convergence of physical and digital stores (“phygital”), and the use of artificial intelligence (AI) and machine learning to better protect customers.

Customers want simplicity, ease, reliability, security and confidence in the payments process. Selecting the right technology to deliver this is the difference between high customer conversion, low fraud and low cost versus customer basket abandonments, chargeback losses and declining market share.

Additionally, retailers must consider the role payments play within the context of overarching digital transformation projects. Those that make innovation an enterprise-wide initiative will be well suited to identify opportunities and respond quickly to new market demands. This ensures customers will always enjoy a state-of-the-art payments experience.

AI and data can create positive customer experiences: AI and data can play a large role in powering an experience-led payments process. When it comes to fraud prevention, innovations like positive profiling can reduce false positives and enable retailers to quickly identify good customers from bad, speeding and securing transactions for both long-time and new customers. It also allows retailers to remove unnecessary barriers to purchase. Ultimately, a multi-layered approach of machine learning, analytics, AI and human strategies is required to address varying channels and fraud types while also staying compliant with regulations.

Retailers also can deploy the data at their disposal to personalize offers based on customer preferences and past behaviors, as well as enable conveniences such as one-click purchasing. Loyal customers want to be treated as such, while new customers want the confidence that comes with a best-in-class experience. Data, AI, machine learning, positive profiling and the like all give retailers the ability to meet the expectations of both audiences.

Conclusion

In a highly competitive market, retailers need to think about payments both in terms of cost reduction and revenue growth. It isn’t any longer enough to tack a payment method onto the end of the purchasing process and think that the job is done. The payments experience is a critical part of the overall customer experience and needs to meet customer expectations of speed, security and ease of use if retailers are to keep those customers coming back for more. The best payments process is one that a customer hardly notices but that leaves them feeling confident and in safe hands.


Chris Andrews is Digital Commerce Leader at ACI Worldwide and has been in the payments industry for more than 12 years delivering payment and fraud solutions to international enterprise retailers. He specializes in global omnichannel payment and fraud screening systems and works with retailers and other merchants to execute go-to-market strategies.

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