FreedomPay 2019

  • Payments and purchasing disruptors – cashing in on emerging payments opportunities

    Craig Champagne, Vice President of Business Development at FreedomPay

    March 2019

    Retailers have a wide variety of ways they interact with their customers. Whether they be bricks-and-mortar shops or online shopping experiences, finding payment systems that are robust and flexible enough to use across all potential channels is not an easy task.

    With an increasing need to ensure a high level of security through the payment experience; a means to reduce the retailer’s exposure to additional payment and data regulations such as PCI DSS and GDPR, in addition to ever changing legislation is enough to make a retailer’s head spin.

    As technology fuels the consumer demand for a seamless check-out experience, there is increasing need for retailers to operate effectively across all channels. Whether it be click-and-collect, online purchasing, traditional ‘pay at the till’, self-service checkouts, or even pay-at-table services in department store restaurants – using a wide variety of payments, including contactless cards, Apple Pay, Alipay, and the like is becoming central to the retailer decision around what payment provider to partner with.

    Offering a myriad of payment methods is vital to keep customers happy, and most importantly, loyal to their brand. Hence, it is extremely difficult for retailers to keep up with everything they are expected to know, offer, and comply with to be secure, within the payment space.

    Choosing the wrong payment provider or a number of payment partners could be a costly mistake for any merchant.

    Security and compliance

    As a retailer, you really need to consider how your customers’ payment data is protected both while ‘in-motion’ and ‘at-rest’ in the event of a hack or technical failure. Point-to-Point Encryption (P2PE) is recommended to protect the credit card data while in motion, such as during a purchase. The results of the transaction are truncated through a method called tokenisation. Tokenisation protects the actual card data that is at rest by translating the clear-text card data into a ‘token’ which cannot be leveraged by anyone who may have infiltrated a merchant’s environment and ingested the credit card information living in their payment application(s).

    For example, using a fully encrypted and tokenised system, a data breach of 600 million card details (not dissimilar to a previous breach in the US), would take the entire power of New York City plus 99 years to obtain just one credit card number. It really is vital to choose the right provider because, let’s face it, the last thing you want to become is an expert in payment security. You need to concentrate on what you are good at – selling your products!

    Retailers who don’t have these wide-ranging, varied, and highly-secure facilities will find themselves falling behind their competitors. Customers expect to be able to use a variety of methods to pay for goods and services, and want to know that their data will be safe in the process. The more ways customers can pay you, the more likely you are to appeal across a wider section of the target market, which can only be good for business.

    But fast and secure methods for paying for goods and services is now only a small part of what customers – and retailers – are expecting from their payment provider. It is becoming increasingly important to know your customer’s habits. What are their likes? How many items do they buy from you? When are they likely to purchase and what is their average spend? All this information is incredibly useful to retailers who really want their customers to feel engaged and valued, so they keep coming back again and again.

    The value of your customer data

    These values may sound old-fashioned in a modern fast-paced retail world, but they really do matter, and retailers who are using the tools available to help them track and monitor consumer activity and spend have the best chance of improving sales.

    For example, using systems data to identify who your top-spending customers are means you can reward them. Not only that, but by crunching the data to see what they buy from you and when, you can reward them in a way that they will actually value highly, perhaps by offering discounts on the products they buy most often, or access to a special event – such as a designer’s show – that would not be possible without your intervention or knowledge of their spending habits. Applying this data collection across all channels will ensure you don’t disadvantage any of your loyal customers, no matter how or when they buy from you.

    You can analyse the data at such a granular level to identify periods where there is a rush, such as a during lunch hours if you are a food retailer, and in response offer a discount to customers electronically to encourage them to visit at 11:30 rather than 12:30. This will enable you to improve efficiency by managing the period where your staff is busiest, while preventing new customers from being lost because they cannot be bothered to wait in a queue.

    But it is not all about the customer. The right systems also allow you to optimise stock control and inventory, saving you money by ensuring your stock rotation is as close to perfect as it is possible to be. Dead stock costs money, and if you are in a traditional retail environment it also takes up valuable display space.

    Retailers need to consider a single, unified system for payments, data analytics and management

    For many retailers, it is necessary to try to integrate a variety of systems that work together to create the best retail experience for customers, while ensuring the best stock control system for the retailer. There are now payment providers that can provide a seamless, single solution for all these different facets of the business.

    By doing a little research into the best methods available for you to manage all aspects of your multi-channel retail business, and by understanding what benefits you can get from accurate customer data collection and monitoring, you can save your business not just time but also money.

    Better still, you can increase your profit margins, since the more customers you can get through your multi-channel services quickly, the more likely they are to keep coming back for more. Speed of service coupled with security are of paramount importance in today’s retail environment, and the merchants that understand this best and act to take advantage are the ones that will win the biggest slice of the customer pie.

    FreedomPay is the official sponsor of the Payments Stage at RetailEXPO 2019. Visit them at stands 5B90 & 5B98 on 1+2 May at Olympia, London.

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