What payments mean to large merchants and why they matter more than ever?

Large merchants are reliant on digital payments

Technological advancement and shifting customer preferences have led to most payments now being made digitally. This has resulted in the arrival of new sales channels, operational efficiency improvements and the unlocking of greater insights into consumer behaviour. Cash usage has dramatically declined, and few customers carry enough cash to pay for goods and services if systems fail. But digital payments also bring increased complexity, risk of criminal attack and the need for improved operational resilience. If payment systems fail many businesses are forced to stop trading. Payments processing is now a mission critical service that requires board level oversight and active C-suite management.

The impact of being unable to accept payments

Any disruption to digital payment processing will have an immediate and significant impact on sales revenue. That is why forward-thinking enterprises are strengthening system resilience and designing parallel processing journeys with built-in redundancy. Criminals understand the value of payment systems and are increasingly targeting enterprises with ransomware and data breach attacks. Recent high profile global attacks on retailers have resulted in multi-million losses, fuelling all large merchants to take a closer look at how they manage and protect their payment systems. Enterprises increasingly recognise how a major payments issue can damage reputation and brand value.

Customer experience is critical

Payments are often the last customer touchpoint in a purchasing journey and therefore any disruption will have long lasting negative impact. A poorly designed online check-out process, time spent queuing instore, or any perceived unnecessary friction, can lead to basket abandonment, customer dissatisfaction, poor reviews and can become a barrier to repeat business. Friction during checkout can lead to frustration and lost sales. Customers want a seamless payments experience. In an increasingly competitive market consumer payment preferences have become even more important to satisfy, and this requires a broader range of international and local payment methods to be supported. Providing multiple payment options enhances customer convenience and satisfaction and customers appreciate the flexibility to pay in their preferred way. Contactless cards and digital wallets have become the default means of payment for most store customers.

Buy Now Pay Later (BNPL)

Many customers are increasingly looking to make payment through instalments recognising the demand for immediacy, instant gratification and impulse purchases. BNPL is no longer restricted to a few vertical sectors like fashion or electrical goods but is now broadly demanded. This requires an Enterprise to offer BNPL and split payment plans as part of their payments offer. BNPL is good news for retailers as it drives revenue with the risk of customer default being passed across to the provider. The growth of BNPL has been driven by lower rates of credit card issuance, particularly to younger age groups, and also thanks to the recent cost of living economic crisis.

Enabling international expansion

Large merchants are increasingly trading internationally to expand their market reach, particularly since the growth in eCommerce, to capture customer purchasing demand outside of their home country, but this relies on international digital payments acceptance capabilities, multi-currency or dynamic currency conversion and alternative payment methods. Having the right payment partner with the required payment methods, local licenses and international experience is therefore critical.

Integrating and embedding payments

Payment systems no longer act on their own, they require integration with a myriad of business applications, including EPOS terminals, property management systems, ERP, accountancy systems and eCommerce platforms. This delivers operational efficiencies, faster transaction times, enhanced fraud controls and an improved user experience. There are clear advantages to embed more payment journeys with other applications and systems. But to achieve this objective it is critical to partner with a payment provider that has the necessary technology skills and flexible processing platform.

New types of acceptance devices

SoftPOS technology, which we call Tap on Mobile, allows a general-purpose smartphone or tablet to be used as a secure payments acceptance device enabling new instore use cases like queue busting, VIP assisted selling and endless product aisle selling opportunities. It also introduces new payment opportunities, and operational efficiencies, when services are delivered remotely.

Android powered SmartPOS terminals now allow a single hardware device to perform multiple other functions in addition to payments acceptance. This includes dedicated apps, available for download from an Appstore, that provide cash register, loyalty, reservation, time and attendance, ticketing and fare collection functionality. These are further reasons why payment now has a greater importance within an enterprise. 

Payments orchestration

Enterprises understand the value a payment gateway delivers by providing a single integration point, omni-channel support, consolidated reporting and connectivity to multiple acquirers and payment schemes. Payment orchestration platforms are the next incarnation with initial adoption at eCommerce sales channels. They help improve authorisation rates by utilising automated transaction routing logic, cascading and retry management. 

Increased compliance demands

Due to the high cost when things go wrong, merchants are faced with an expanded and more demanding list of compliance requirements set by local regulators and the international payment schemes. These aim to protect consumers and all parties within the payments ecosystem. Compliance is no longer a one-time task, but rather a continuous and evolving process. New regulations are constantly being introduced. Payments compliance should be viewed as an enterprise-wide responsibility, not just an IT project, as it involves people, processes, and systems. Businesses can simplify compliance by adopting appropriate technologies (like point-to-point encryption, tokenisation, 3DS) and working with experienced payment providers and certified solutions, but overall responsibility can never be outsourced.    

Unlocking insights into customer behaviour

Modern payment processing systems capture extremely large amounts of data, across all sales channels, that can reveal deep insights into customer shopping habits and behaviour. This can be used to strengthen customer loyalty and drive revenue through frequent shopper programmes and targeted reward promotions. Tokenisation technology, payment account references (PAR) and a unified payments platform maximise the amount of customer insight to be revealed. When data from payment systems is combined with CRM maximum insights are revealed.

This is where tools like Worldline’s ePortal become critical: by centralising reporting from in-store, online, and mobile transactions, ePortal gives merchants a real-time, consolidated view of performance. These actionable insights empower enterprises to optimise operations, improve the customer experience, and ultimately drive revenue growth.

Need for a strategic partner

Payments is a far larger subject matter than it was 15 years ago and plays a critical role within the organisation. Large merchants are reliant on payment systems and the impact of anything going wrong is huge. Thanks to the increased complexity, requirements and strategic importance of payments, enterprises should seek a long-term partnership with a payment provider who they can trust and rely on for the long term and not a vendor relationship based on lowest cost. A comprehensive and optimised payment strategy is a critical need for a successful enterprise business.
 

Discover how Tap on Mobile is changing the game for enterprise retailers