A man walks into a bar… the robotic bartender has pre-prepared his drink and he walks off without handing over any money. Far from a bad joke, this may be the future of retail payments.
The big story is frictionless payments, and the ability to seamlessly integrate the payment process into the consumer experience.
Think app-based taxi services, where the transaction is so invisible that the ride can feel like getting a lift from a friend.
“We are starting to consume products without considering the payment,” says James McDonald, Barclaycard’s Head of Strategic Initiatives and Innovation. “This is going to develop considerably.”
The great disappearing act
Renting films online and digital music subscriptions – where payment details have already been pre-entered – are similar examples of the kind of embedded payment experience that is expected to flourish across many other sectors.
How far will that frictionless experience extend? People are already ordering goods over the internet using just their voice, and James says there are some niche markets that could truly benefit from this kind of intuitive experience.
“I can see all of this being phenomenally useful for older people who want to stay in their own homes, supporting themselves for longer,” says James.
Yet as payments disappear into the background, there’s likely to be a greater push to make sure consumers don’t lose track.
“As things become more frictionless, it’s going to be very easy for people to consume and spend,” says James. “You’ll have less friction at the point of interaction, but more responsibility to inform consumers how they are spending.”
There’ll also be a greater amount of data to keep secure as payments go digital. But this shift could also lessen the burden on retailers.
“Big retailers previously took ownership of their own payment systems,” explains James. “But more and more transactions will head off into the cloud and there’ll be a much bigger focus on making that data secure.
“By using a third party payment gateway , retailers can make sure the data is kept secure in a safe environment. They will carry less card data themselves,” he says.
The responsibility for authorising the transaction itself will also shift through a greater use of biometrics such as fingerprints, vein recognition, voice or even selfies.
“Mobile devices are great for this,” says James. “They can be used for online, in-app and face-to-face transactions, and the authentication of those transactions will move away from the retailer to the consumer.”
How to back a winner
With new payment technologies being launched on a regular basis, retailers are often placed in an uncomfortable situation where they don’t know which ones to support.
But rather than get overwhelmed with the technology, retailers should stay focused on the experience they want to provide for their customers.
“If you want a better customer experience, then it’s a good time to talk about how technology can help you achieve this,” says James. “But it’s all got to be driven by the consumer.
“Our job is to find new payment methods that are relevant to retailers and lift away the hard work in accepting them,” says James.
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