Navigating the changes in payments processing
30 / 01 / 2024
In the dynamic landscape of retail, technological advancements are driving a transformative shift in the industry. This evolution, driven by changing consumer behaviours and technological innovations, positions the selection of a payment provider as a crucial strategic decision for businesses.
The Changing Landscape of Payments
In recent years, the dominance of cards in payment transactions has increased significantly, with a 2% rise from 2021 to 2022, reaching a 59% share, as reported by UK Finance. The growth in cashless transactions reflects a consumer preference for convenience. This paradigm shift emphasises the critical importance for businesses to adapt promptly, or risk falling behind in an increasingly competitive market.
Beyond Transaction Processing: A Strategic Decision
Choosing a payment provider is no longer a tedious operational detail; it's a decision that resonates throughout a business requiring multi department involvement. The impact extends beyond mere transaction processing and back-office financial processes, influencing competitiveness, customer experience, brand reputation and ultimately, profitability. To stay ahead, retail businesses must select payment providers offering a comprehensive range of solutions, from traditional card payments to modern e-wallets.
Three Pillars of a Robust Payment System
In selecting a payment provider, businesses should prioritise three key pillars that align with customer expectations and form the foundation for a robust payment system:
- Stability is essential for smooth transactions, reducing disruptions, and preventing downtime that could impact customer experiences. While payment providers aim for stability, unforeseen outages can happen. Businesses should choose a provider committed to preventing issues and quickly resolving disruptions when they occur.
- Flexibility is crucial for a provider to adapt to new technologies in a timely manner, while ensuring operational continuity in diverse circumstances—a key differentiator in the face of changing market needs and heightened consumer expectations.
- Security perhaps the most critical factor, entails safeguarding customer data and strengthening defences against a criminal attack. The recent 25% rise in cyberattacks on payment platforms emphasizes its significance in protecting against potential threats.
By committing to these pillars, a payment provider not only meets fundamental customer demands but also empowers businesses to navigate confidently through a changing retail landscape.
Common Perspectives about Payment Systems
Perspective 1: Cash Transactions in Modern Retail
The decline of cash transactions is evident globally, with a shift towards a more cashless society. QR codes, particularly in regions like Brazil and India, have become pivotal for facilitating digital transactions. The World Payments Report predicts a 12% CAGR in global non-cash transactions, driven by consumer preferences for digital payment methods accelerated by the COVID-19 pandemic.
Perspective 2: Meeting Evolving Retail Needs
Existing payment infrastructures may not meet the demands of omnichannel retailing, a strategy crucial for providing customers with a seamless shopping experience across various platforms. Adapting to consumer preferences is essential for retaining and attracting customers in a highly competitive retail landscape.
Perspective 3: Adopting New Payment Systems
Rapid adoption of new payment systems may not guarantee smooth transitions. Proper planning and execution are critical, as swift implementations can lead to unexpected consequences. A comprehensive strategy involving detailed planning and thoughtful system design and thorough testing is recommended.
Conclusion: A Strategic Reassessment
In the rapidly evolving world of retail technology, a strategic reassessment of payment providers is essential. Stability, flexibility, and security should be the guiding principles in the selection of a payment provider. Recognising the trend toward a cashless society, embracing omnichannel retailing, and approaching new payment system integration with careful planning are crucial for success. Establishing the right framework from the start ensures a seamless customer experience in the evolving commercial landscape.
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