The age of frictionless payments is upon us. We only have to look around us to find examples of companies who have been trailblazing in this space for a while now. From the Amazon grocery stores to the magazine subscriptions on your handheld devices, frictionless payments are taking over. Convenience is king.
Shoppers want to spend less time at the checkout and more time doing what they love – shopping. This is great for merchants because it means customers spend proportionally more time in the store than at the till. This not only increases the chances of a sale, but also the traffic through your retail or eCommerce outlet.
You may ask – what is a ‘frictionless payment’? This is a payment industry term where the traditional ‘remove your wallet and pay by card or cash’ is being replaced by a variety of payment methods designed to make the whole retail experience slicker, faster and better. As with all products these days, payment products are being designed from a user experience viewpoint to ensure you have a rich shopping experience. Payments has traditionally been a necessary evil in the whole shopping experience, but the payment experience is now being recognised as one of the most important factors when designing your online or retail store.
Why do I need it if I am doing fine without it? It’s like getting a sports car when you are used to driving a regular sedan. Sure, you felt like you never needed it but once you drive it, it makes you realise what you were missing. The big difference in the analogy here is, this frictionless payments ‘sportscar’ actually puts money back into your account by making it faster and slicker for your customers to make a payment to your store.
What are some examples of frictionless payments?
- Walkthrough grocery stores: you pick the items you need, sensors detect the items you pick and you pay via a pre-registered payment method.
- Drive through petrol pumps: you drive in, forecourt concierge fills you up, and you leave. Payments are handled via pre-registered card details via an app.
- Ridesharing using phone apps: this is probably the most common frictionless payment experience in the world today with the likes of Uber, Lyft and Ola.
- Retail Payments using smart devices: tap your smartphone to pay using your phone wallet instead of your card thanks to Google Pay and Apple Pay.
What effect is this having on the eCommerce market? The line between eCommerce and the in-store shopping experience is blurring. A customer could start their journey by browsing for a product on your website, be pinged when they are near your store and the item is in stock, complete the transaction via your app and pick the item up in-store. Despite the item being picked up in-store in such scenarios, the sale is considered an eCommerce transaction as the transaction was completed via the app. Such transactions aided with a general increase in online shopping has meant eCommerce transaction growth is outstripping traditional instore terminal transactions. Growth in eCommerce transactions has been 16% year on year growth as opposed to 2% for instore terminal transactions.
At Paymark we have invested heavily in leading the future for frictionless experiences in New Zealand. From enabling eCommerce payments in a retail service station environment, to investing in next-gen research that enables payment via facial recognition technology. We are leading the New Zealand market in terms of frictionless payments. Our vision is to use our payments expertise to help New Zealand merchants take their business to the next level.
End-to-end customer journeys are key in today’s challenging retail environment. From the moment a customer visits your online or physical store, to the moment they walk out, it is crucial to make the shopping experience a memorable one. When you think about it, the payments experience is the last one in the chain. Make it smooth and frictionless, and your customers will keep coming back.