Ingenico predictions: What’s on the horizon for payments in 2020?
Guest post: Lee Jones, Director of Sales and Business Development, Ingenico Enterprise Retail
In this new decade Ingenico is thinking about the changes ahead of us. There’s no doubt 2020 is set to be a milestone year for the payments industry – in 2019 we experienced a record-breaking Black Friday weekend, and launched Tap and Connect so consumers can automatically enrol in Retailers’ loyalty programmes when paying in-store with their mobile phones. We also explored how in-store mobility is redefining the shopper journey with our white paper, Roaming Retail.
As society’s appetite for seamless and convenient experiences continues to rise, let’s take a look at the consumer trends businesses should be keeping an eye out for, where the payments sector is headed, and how retailers can best prepare themselves for the coming year.
What consumer trends should be on retailers’ radars in the New Year?
The increase in digital payments and online shopping points to a clear conclusion – these days, convenience is more important than price. According to Retail Insight, over 50% of UK consumers are now shopping online and UK online spend is forecast to increase 29.6% between 2019 and 2024.
As the demand for convenience increases, merchants should ensure that their checkout experience is in safe hands both online and in-store. Streamlining your processes across all channels will have a double whammy effect, offering a positive experience for customers in-store to keep them coming in, whilst also ensuring online customers aren’t turned off by a complicated transaction process.
In response to consumers’ increasingly busy lifestyles, this year we will see an increase in Scan & Go on consumers’ own devices. While supermarkets have made use of such systems previously, interest is increasing in enabling consumers to scan, pay and go on their own device, speeding up the customer experience. As a result, it will be more important than ever that merchants provide a payments system that appeals to consumers, to avoid frustrating customers both in-store and online and driving them towards other competitors
Finally, a clear preoccupation across all sectors in the New Year will continue to be the environment. Customers are increasingly concerned with the impact their purchases are having on the natural world. While at Ingenico we are working towards making our payments terminals more eco-friendly, retailers should be aware that ethical packaging and delivery methods for online purchases will often sway a customer toward buying through your online store. According to Retail Week research, 29% of UK shoppers have started shopping with retailers with more ethical or sustainable practices.
Similarly, businesses should consider how they can use technology for good. For example, setting up micro-donation technology which gives card users the option to make a small donation at the point of sale allows customers to have a positive social impact as they spend. Micro-donations charity, Pennies, in partnership with Ingenico, has raised some £2 million (€2,2 million) since 2011 simply by offering customers the option to donate their rounded-up transactions.
This trend for socially and environmentally responsible retail is becoming even more prevalent as retailers such as M&S introduce schemes to encourage customers to bring their own containers. Clearly, where the environment has become increasingly important to consumers throughout 2019, it is set to become a top priority in 2020.
The adoption of immediate delivery services by retailers will be key to providing convenience. Making this ethical by establishing more localised delivery hubs and pedal power completing the last mile with limited or zero packaging will tick a lot of boxes for consumers.
What will be the main new developments in the payments sector?
Technology research company Gartner forecasted that 75% of organisations selling direct to consumers will offer subscription services by 2023. This means that convincing customers to subscribe to a service is a harder sell, but ultimately more rewarding. However, it also means that a failed checkout is even more detrimental to merchants, making the seamless checkout experience increasingly important.
Meanwhile, contactless payments are continuing to grow in popularity, meaning merchants must stay up to date with the increasing demand. With contactless payments making checkout quicker and simpler, more and more businesses are adopting the contactless model – including small businesses such as vendors and kiosks – in order to avoid being left behind. Similarly, mobile payments are on the rise and as we move into 2020, we expect to see an increase in retailers using P2P payments via cards and mobile.
This year we will also see further advancements in voice commerce technology. Previously considered a “nice to have” feature rather than a substantial revenue enhancer, voice technology is quite clearly becoming a new channel for merchants and consumers to interact. According to OC&C Strategy Consultants, in 2018, $2 billion was spent on voice commerce in the US market. But by 2022, that number is predicted to have increased to a phenomenal $40 billion. As consumers increasingly crave quick and convenient answers to everyday tasks, voice commerce’s instantaneity is becoming more appealing for shoppers, particularly as the technology facilitating it advances.
Crucial to this uptake, however, is ensuring that customers feel that the payment systems are secure and not at risk when completing their transactions, so make sure to seek an experts’ guidance if you’re looking to reap the benefits of this trend. Exploded
To that end, security and regulation will also continue to be an ongoing theme in the payments industry in 2020. As we close in on the final SCA compliance deadline, merchants will need to update their systems and ensure they are fully in line with the new rules in order to strike the right balance between a secure yet frictionless customer experience.
How can businesses best prepare themselves for 2020?
2020 is the year in which we expect to see an even greater shift towards a cashless society and the further adoption of the omnichannel retail experience, with online moving in-store. As a result, merchants must make the consumer experience their top priority as trends shift towards simplicity and convenience. This is especially true on the high street, as the move towards the omnichannel experience means customers will be able to have all the ease of the online experience, in-store.
Ultimately, the retailers that don’t stay up to date will lose customers to those who do. And this is true across all businesses and sectors – whether hospitality, parking, vending, retail; whether large or small – the seamless payment experience is crucial to excelling in 2020.
To learn more about how Ingenico can secure and speed up your payments process, visit: www.ingenico.com/omnichannel
