Advisors see retail payment systems adapting to the pandemic

The COVID-19 pandemic has a way of emphasizing certain technologies – from cloud computing to hyper-automation – and pushing them towards the mainstream.

This pattern applies to bulk payment systems. Before COVID-19, retailers adopted mobile and contactless technologies, but the crisis has made their use commonplace. Consumer purchasing preferences and methods have changed since March 2020, and those patterns will persist, according to service providers and industry advisors. Retailers adapting to the new world of payments are adopting a number of tactics, including updating point-of-sale (POS) technology and linking in-store systems with e-commerce software. Some companies are also exploring non-traditional retail models that employ new payment methods.

MSPs and other retail ecosystem partners can expect a mix of consulting, development, and systems integration work with clients. However, you are likely to find different needs at different size retailers.

Meet new expectations

The pandemic has forced companies to embrace omnichannel commerce and refine their digital transformation strategies to meet customer expectations, said Vijaya Prakash Pallem, Dynamics 365 retail and commerce practice delivery lead and solution architect at Synoptek, an Irvine-based MSP and integrator. California.

Vijaya Prakash Pallem

This retail shift started with payment systems, he said.

“The pandemic has caused everyone, including customers, to switch to digital payments,” Pallem said.

Digital methods range from mobile payment apps on smartphones to e-wallets and QR code payments. Another trend among retailers is the “buy now, pay later” options integrated into digital payment methods.

“Companies are expanding their payment options to meet customer preferences for digital payments – both contactless in-store and flexible online payments,” said Pallem.

Consumers are driving this confluence of brick-and-mortar and online sales.

“They want to shop in a different way than just online or in-store,” said Inderpreet Batra, managing director and partner, head of payments for North America at Boston Consulting Group (BCG), a management consulting firm. “What will happen is a tighter coupling between digital experience and physical experience.”

Hybrid experiences include online purchase, in-store pickup (BOPIS), noted Batra. He also mentioned the expansion of retailers’ mobile apps to enable in-store navigation and online ordering. Another hybrid variant offers customers the option of ordering products online when items are not in stock in a physical store.

These approaches invite retailers to think differently about payment systems.

“The biggest question is: how do they keep introducing new and novel experiences – whether digital, physical or hybrid – and how can payments support all of these initiatives?” Batra explained.

The extent to which businesses need to adapt their payment systems to accommodate these experiences varies. Activate BOPIS – what BCG Global Payments Report The so-called “must-have feature for merchants” — generally involves setting up a dedicated station for pickup rather than an entirely new POS system, Batra said.

Inderpreet Batra, Managing Director and Partner, Head of Payments for North America, Boston Consulting GroupInderpreet Batra

Transforming a retailer’s mobile commerce system into an in-store shopping assistant requires some development work. The trick is to avoid becoming too invasive. When a shopper uses a store’s mobile app to determine which aisle a particular product is in, the app may also provide information about two or three related products. But that’s probably enough help. “Don’t send 20 notifications,” advised Batra.

“If a customer hasn’t responded to any notification, it might be a good idea to lower the frequency and revisit the recommendation engine,” Batra said. Retailers in general need to think about marketing to customers through their apps, he said. Shoppers who enable notifications typically set a high bar for relevance, so marketing offers should be carefully tailored and responsive to feedback. Otherwise, a customer could ignore all notifications.

Ordering products online from a physical store introduces a higher level of complexity. That capability requires integrating a retailer’s business operations with their e-commerce system, he added.

The pandemic has caused everyone, including customers, to switch to digital payments.

Vijaya Prakash PallemDynamics 365 Retail and Commerce Practice Delivery Lead and Solution Architect, Synoptek

Payment trends for small and large retailers

Service providers working with smaller retailers will find that vertical software is the main trend in payment systems. Vertical software supports the full scope of a small retailer’s business, encompassing marketing, inventory management and consumables ordering, as well as payment and POS.

Examples of vertical software providers are Clover and Square. Such vendors offer their own POS hardware or work with a hardware vendor, Batra said. The bundling of software and hardware has fueled a wave of POS technology replacements as retailers discard legacy systems in favor of verticalized offerings.

However, larger retailers are less likely to adopt such a far-reaching rip-and-replace strategy. The costs of purchasing new hardware in numerous branches and the associated costs for retraining employees speak against such a step. Instead, the larger chains tend to tweak their POS systems or integrate new software to add functionality, Batra said.

Such retailers are also trying to improve the shopping experience for the customers. Some companies are adding dual-use POS devices that they can deploy in a checkout aisle or move to another location when lines get too long, said John Casebeer, product manager at Insight Enterprises, a Chandler-based IT services company. arizona

A dual-use device typically consists of a mobile POS unit with an attached carriage containing a scanner, card reader and receipt printer, he noted. Such devices can operate in standalone mode or reside in a docking station that connects a mobile POS device to accessories such as cash drawers and employee/customer monitors, he added.

John Casebeer, Product Manager, Insight EnterprisesJohn Casebeer

“Some of our customers are looking at something like this,” Casebeer said of line-busting technology.

POS terminals in self-checkout lanes will continue as a retail trend. According to Batra, stores can place four to six self-checkout areas on two traditional tills.

“That means increasing the number of checkout points for faster checkouts and a better customer experience,” he added.

Another trading concept completely dispenses with cash registers and cash register systems. Amazon Go convenience storesFor example, they combine computer vision, sensors, AI and a mobile shopping app to enable take-out shopping. The technology tracks items shoppers take from store shelves in a virtual shopping cart and charges credit cards linked to their Amazon accounts. Grocery retailers in the UK Tesco offers a similar GetGo market.

However, partners shouldn’t expect to see a big push towards adopting this model. Batra said more checkout-less store pilots could emerge in 2022, but not a full-scale transition to the grab-and-go model.

Other payment technology trends for 2022 include investments in anti-fraud technologies and the digitization of B2B payments. The latter is undergoing a digital transformation to meet the expectations of vendors and suppliers, Pallem said.

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