Another year has drawn to a close and it has been something of a whirlwind in the world of payments. 2015 started with retailers singing the praises of ‘Click and Collect’ as more consumers looked to do their shopping online while mobile payments moved to the fore as Samsung launched its mobile payment service and Apple Pay came to the UK. Meanwhile, consumers continued to move to contactless payments, buoyed by an increase on the limit to £30. In many ways, 2015 was the year where ‘alternative’ became the norm – in payments at least – as cash finally relinquished its crown as the king of payment methods.
A big year all round, and this is really only the tip of the iceberg. How will 2016 live up in terms of momentum? Luckily, The Logic Group boasts an enviable amount of experience and expertise in this area so we asked members of our team from across the business to find out what exactly might be in store. It’s fair to say things don’t look like letting up anytime soon…
Omni-channel: From buzzword to implementation
Marc Pettican, Managing Director
“Omni-channel has been the buzzword of the last few years. It’s up for debate quite how far retailers are along that road just now but they’re definitely getting there. A central aspect of omni-channel is using customer data in a consistent and joined-up way. This of course has certain security implications and the topic will become even more important in 2016. There will be certain challenges for retailers in reassuring consumers of the security of their personal data, and using that data to properly implement their omni-channel strategies. Those merchants that do want to deliver on the promise of omni-channel will need the right technology and the right know-how to do so.”
Bringing the cloud in-store
Ed Black, Director of Strategy and Business Integration
“Technologies like the cloud and mobile have largely been credited for the boom of eCommerce and the move away from the high street but they’re also set to change how we shop in-store too. With widespread connectivity and every one of us carrying what would have been considered a supercomputer just 10 years ago in our pockets, the way we interact in-store will evolve in a more fundamental way than ever before. There won’t be a need for tills or traditional Points of Sale as every phone can do that job. It won’t be a sudden revolution on shop floors up and down the country but we will start to see things evolve in such a way that we will see the green-shoots of a new way of shopping, and paying, in-store.”
The global payments village
Mark Prior-Egerton, Payments and Partnerships Product Manager
“It’s a global marketplace today and that’s something which merchants need to build into their operations. There is a huge opportunity for retailers in the UK to make themselves more accessible to consumers from different markets and if they don’t they can be sure their competitors will be more than happy to do so. The challenge is that payment methods are cultural and certain services that might be unknown here are market leaders elsewhere. Whether it is supporting Discover/Diner cards for US tourists or Alipay for Chinese consumers online, retailers will need to work with partners that support the widest range of payment methods or risk getting left behind.”
Making commerce mobile
Andy Mellor, Product Manager
“It’s something which has been mooted for some time but the age of ‘mobile first’ is definitely upon us; particularly as millennials become a highly valuable consumer demographic. Wallets are not a new phenomenon but as the biggest kids in the playground enter the fray you can see this is a prime battleground. The proliferation of smart devices – not just phones – will also profoundly impact the way many transactions are made. This isn’t just in the form of contactless mobile payments but also for online and in-app purchases of digital and real world goods. Mobile won’t just be helpful to the shopping experience, it will become central. Merchants will have to look at how they build their digital and in-store experiences around mobile and omni-channel payment journeys will be at the heart of this.”
Helping merchants do what they do best
Ben Stagg, Head of Client Management
“There’s been a lot of innovation in the past few years and that has really changed the shape of the market. We’re at a point where in 2016, there’s greater knowledge amongst merchants about all the new services and methods of payment available. With that knowledge, those same merchants are much more aware of what their customers want and by extension what they themselves want from a service provider. With this greater understanding has come greater appreciation of the value a managed service provider like The Logic Group can offer them. I think we’ll see more and more merchants turn to payment service providers to take the complexity out of the job for them so that they can focus on what they do best; in short, there will be more focus on value, less on price.”
Ensuring compliance across the board
Nikita Septucha, Solution Architect
“The migration away from cash as the primary method of payment for many consumers will continue, with wallet providers driving greater adoption of contactless and mobile payments. The main question for most consumers will always be around security and merchants need to be able to guarantee that peace of mind. There is also a huge PCI DSS obligation on the merchants and we’re seeing increased interest around our PCI-validated P2PE solutions as they recognise the challenges of compliance. I’d expect to see more and more retailers move towards managed services in the coming months.”
Seamlessness through communication
Nicole Olbe, Sales Director
“With the omni-channel experience being a key trend for 2016, there will need to be greater communication across departments. The customer will not see any distinction between these, and so businesses must ensure that head of operations, head of sales, customer service are all engaging in increased dialogue to create a seamless customer experience. It’s one thing to have all your systems across mobile, online, in-store and beyond in place, but ensuring that a business has the support of all the required stakeholders to deliver that omni-channel experience is a whole extra layer of complexity. A truly seamless experience needs to be completely seamless, internally too and merchants will need to work with partners who can facilitate this.
The importance of data security
Nick Stacey, Director of Business and Marketing Operations
“In the future, data will be a key area of intense focus, innovation and competitive differentiation. At the same time, concerns around the security of an ever growing mountain of personal data are intensifying. Legislators are looking to strengthen the rules and regulation that govern and protect these assets.
The more strategic interactions that a merchant has with a customer the greater the understanding the merchant will have of customer journeys, shopping patterns and consumer behaviour. When we shop online, contact a call centre or go into a store, we expect to be recognised across the various channels and we expect to have a consistent brand experience. The Logic Group’s tokenisation service allows the merchant to access its encrypted data in order to help the merchant to analyse and better understand its customers and their behaviours.
As data security continues to move to the centre of the agenda, savvy merchants will be looking at how they can use secure services such as tokenisation to reassure consumers and to better understand them.”
The importance of proving your security credentials
Robin Adams, Director of Technical Strategy and Architecture
“The increasing public awareness of the need for strong digital security means retailers will be expected to be far more proactive in how they demonstrate they are securing their customers’ data. Through providing clear guidance and processes, retailers will need to provide a far more pro-active demonstration that they are ensuring a safe and trustworthy environment for their clients. Alongside the usual differentiation of price and customer experience, the perceived security of a retailer will become a key differentiator.”
The rise of bespoke payment methods
Gavin England, Service Operations Manager
“Just 20 years ago, payment was pretty simple: card, cheque and above all, cash. Nowadays there are so many more methods of payment from many more providers that things have become quite fragmented. What systems does each merchant support and why? Early signs show that retailers aren’t all taking the same approach to the payment services we provide them, preferring bespoke services to something off the shelf. This indicates how important they see the payment service and how it might act as a differentiator in terms of the experience they will offer their consumers. In 2016, more retailers – especially the big brands – will wise up to this and start building the payment experience into their wider offering.”
The future of innovation
Mark Edwards, Development Manager for Point of Interaction, Loyalty and Online Portal
“It’s taken a long time for the payment ecosystem to get where it is and we’re finally in a place where developers can do their thing relatively unencumbered. Before, there needed to be a huge amount of cooperation between disparate players – devices, operators, acquirers etc. – but that’s not the case anymore. Contactless is driving the market today and making it easier to roll out new services. As such I think we’re going to see a lot more innovation in the next year as developers and clever start-ups capitalise on this relatively newfound freedom. For these guys, working with someone like The Logic Group will ease the load even more, offering best-in-class security, omni-channel support and a single API to simplify integration.”
Whose job is it to secure service quality and security?
Anita Liu Harvey, VP Strategy and Insight
“The increased integration of mobile into the retail experience is introducing new touch-points in the way of apps, social and payment. These touch points are all fundamental to the omni-channel experience but have introduced some real complexity for merchants who, under the pressure of delivering a seamless experience are tacking together all their siloed back-end systems which puts them at risk in terms of service quality and security. The obvious answer will be to unite the backend to give a single point of view to streamline the management of these various strands. Not many, if any, merchants will have the capacity to this in-house so they will start to turn to managed payment services partners. This will outsource risk and complexity but also make the question of who owns payment data – which will be key to providing insight – a central one in 2016.”
Convenience and security are king
Rob Fish, Strategic Architect
“Technology continues to evolve at break-neck speed and service providers across the e/m Commerce industry are deploying ever more innovative and personalised experiences. This evolution holds true in the payments space where new and innovative solutions continue to proliferate. In 2016 we’re likely to see continued deployment and mainstream adoption of payment methods and experiences that are considered ‘new’ today. Mobile will continue to grow as a channel through continued growth in tablet/smart-phone devices. Consumers will be exposed to new technologies designed to streamline the payment experience and reduce friction in the payment flow. This will be key to the success of new payment method. Convenience and security are king, and consumers need to feel comfortable with both the physical process of making a purchase and the sense that their payment and personal data are secure. Biometrics are already mainstream and it is likely that new forms of authentication that further speed the end customers experience will start to be trialled. Many merchants are pushing ahead with contactless payments and promoting mobile payment services that build on the familiarity and provide opportunities for additional value added services. The real forward-thinkers will be putting the building blocks in place for future innovations. 2016 is really just going to be the beginning.”
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