The industry is trending toward seamless, even invisible, payment experiences that take care of transactions behind the scenes with little effort on the customer’s part.
E-commerce merchants have the opportunity to make payments virtually frictionless for their customers. Tokenized payment data enables customers to make purchases with just a single click. But how can solutions providers enable brick-and-mortar merchants to provide frictionless payment experiences?
Customer payment provider Payment Highway explains that frictionless payments should have some, or all, of these features:
Global payments provider Payvision explains that the trend toward making payments seamless, frictionless — even invisible — is driven by the increasing influence of millennial and Gen Z consumers and advancing technologies.
Frictionless payments are practical and widely adopted in some use cases. For example, many travelers and commuters pay tolls via transponders that communicate with readers when they enter and exit a parking structure or toll road and charge a payment card on file. Alternatively, some systems use license plate recognition to charge an account. Another example is Disney World “MagicBands,” wristbands enabling theme park guests to charge purchases to their hotel rooms.
For most IT solution providers, offering license plate recognition or magic wrist band solutions won’t get much interest from your clients. But some solutions will help your clients remove friction from payment transactions:
Mobile apps — Starbucks is the perennial example of frictionless payments via a mobile app. The popular app combines payment, loyalty program, gamification, ordering, and other features tailored to individual customers. At the store, customers open the app, tap pay, and hold their smartphones up to a scanner. In addition, they can set the app to automatically reload their cards to make the process even more frictionless.
Mobile wallets — Near-field communication (NFC) enables payments via mobile wallets such as Apple Pay, Google Pay and Samsung Pay. Customers unlock their smartphones with their passwords, fingerprints or by drawing a pattern and then hold it near an NFC reader to transmit payment data.
Contactless payment cards — Also using NFC technology, contactless payment cards enable customers to tap or wave their cards near the reader and automatically pay for payments up to a certain amount. Tap-and-go payments are simple yet safe, using the same security technology as EMV payments.
Voice ordering — As easy as online shopping with just a click can be, Amazon has made it even easier by enabling customers to ask Alexa on Amazon Echo to place their orders. Voice interfaces can also change the way customers place their orders at quick-service restaurants.
Some merchants are exploring ways to make in-store payments completely frictionless. For example, Amazon Go stores use “Just Walk Out” technology. Shoppers use the Amazon Go app, scan a code when they walk into the store, choose the items they want — then walk out. Amazon Go’s technology is proprietary but reportedly uses shelf sensors, cameras, and specialized package codes to make the system work.
Most IT solution providers may not be developing or providing cashierless payment solutions, but do you offer solutions that can remove friction from payment transactions? It’s a trend you need to respond to with solutions that make payment experiences — and customer experiences — easier, more convenient, and more likely to contribute to customer loyalty. ν
Jay McCall is an editor and journalist with 20 years of writing experience for B2B IT solution providers. Jay is co-founder of XaaS Journal and DevPro Journal.