Checkout shocks changing shopping: the new era of retail payments

Ross McGee
Ross McGee

The circular economy is synonymous with sustainability. It is a conscious effort to repurpose and reuse goods and materials rather than expending income on attaining new resources as a consequence of throwing old ones away. It is therefore difficult to imagine the term being applied to the world of retail payments. However, this is just one of the many landmarks which payment technology is reaching, signifying just how much is changing. Read on to discover how this revelation and others are transforming the shopping experience:

Self-sustainable payments

Digital payments are nothing new these days. Contactless payments have been available in the UK since 2007 and mobile wallets such as Google Pay are now used by over 150 million people worldwide. Whilst these services have always offered benefits to end-users, now they are also serving themselves.

Every time a digital action takes place, it leaves a trace, and digital payments are no exception. As a result, the ubiquity of these payments is producing masses of data on payment preferences and shopping habits.

With the core aim of retailers being to encourage further payments, and payment firms sharing this goal, the latter is providing both parties with the means to make this a reality. For example, marketers can now ascertain what sort of products people like and at what time during the week they buy them; and payment firms can intuitively decipher which payment option to prioritise on checkout based on products being bought if they are typically purchased by a certain demographic.

Payments are therefore becoming a sustainable, circular ecosystem in their own right – every time a payment is made, it produces data which can increase the chances of further ones being made.

Payers in charge

Personalising retail and payment options is no doubt a highly successful strategy for encouraging further payments; however, it can at times be unnervingly spooky for customers when algorithms accurately predict their needs. Introducing a human element to payments whilst keeping options available is therefore a good resolution to this “nice-to-have” issue.

POS terminals with the ability to “split the bill” are one such solution. These devices do what they say on the tin and make it easy for multiple people to choose how they pay their fair share towards a meal, gift or other item. Ultimately, this solution gives customers choice whilst making the need to use peer-to-peer payment (P2P) apps to settle differences redundant. Considering that P2P apps are used by over 80% of consumers, “split the bill” POS terminals within a retail or hospitality setting are bound to be a hit.

All about automation

How goods should be purchased has been hotly debated over the last couple of decades. Ever since online shopping became available, there has been a battle between its new offering and that of traditional in-person shops.

However, it seems that attitudes towards shopping are now leaning in favour towards those akin to online experiences. For instance, even though some people might still prefer to shop in person,  75% wouldn’t withdraw their custom from a retailer which uses automation technology, and nearly 25% would in fact be more inclined to shop with a retailer if they did. Shoppers are therefore evidently coming to value automation – an integral facet of online shopping – so highly that they are willing for it to infiltrate into a traditional shopping experience when it comes to checkout experiences and customer loyalty programs.

It is therefore also likely that they would not want anything going wrong with their payments and would like for back-office operations to be automated too. Even if they have never considered this, it will be in their best interest.

After all, their preference for automated payment experiences means that slow transaction methods such as cash and cheques are becoming increasingly rare and instead real-time digital payments are the norm. The speed and ease of these payments inevitably place higher levels of stress on back-offices due to producing higher volumes of transactions in a shorter space of time. Regardless, they must be reconciled in a timely manner. As a result, to meet customers’ payment demands, automation is needed everywhere, including when it comes to reconciliation.

All about accessibility

Nearly 1 in 5 working adults in the UK have a disability. As a result, it isn’t surprising that the spending power of disabled people and their households is estimated to be a humongous £274 billion. Yet despite the Equality Act (2010) and Web Content Accessibility Guidelines, high street shops across the UK collectively lose roughly £267 million per month due to not being accessible and accommodating to individuals with disabilities.

Unfortunately, a repeat offender within retail when it comes to making shopping difficult for the disabled population is that of completing payments. Historically, complications arose due to chip and pin devices being fiddly to use, ATMs being unreachable and positioned in ways which were not conducive for some people to shield their PIN, or online checkout processes being poorly formatted.

However, with new technology comes accommodations which can provide solutions. For example, contactless payments make difficult-to-use pin pads redundant and also mean that PINs no longer have to be shared with other people. In addition, the likes of Purple Financial are going one step further to not only simplify payments but also the related and complicated world of benefits which can be available for disabled people. They are achieving this through their innovative Smart QDE Routing feature which automatically detects whether purchased products meet the requirements to be a Qualified Disability Expense (QDE) and if so, route them to be paid in a way which is most advantaged for tax purposes.

Back to the future

In 2021 the headlines were grabbed with news of Amazon opening their first UK cashierless store, promising to change how we shop forever. Before that, it was groundbreaking for people to be able to make purchases via their watches. However, in reality, neither of these payment methods are really taking off just yet – maybe society isn’t quite ready for the future yet.

In fact, it appears that some people are reverting to older payment methods when it comes to shopping. Cash is making a comeback. The cost-of-living crisis, older age groups not getting on board with new payment innovations and the fact that some of the best deals are found exclusively online has led to a perfect storm for cash to be reimagined.

Kasssh is a firm which has reacted to this by developing a way for people to make purchases online with the option to collect their items in-store upon them paying in cash. This way, online prices hold true and people can still pay with their preferred method of cash. Whilst this might seem like a backwards step for some, it too can also be observed as a solution which is helping to sustain the payments ecosystem. After all, cash is the preferred method of older generations who have considerable spending power.

Shockproof reconciliation

Evidently, the payments landscape within retail is continuing to evolve in both expected and unexpected ways. However, no matter what comes next for retail payments, reconciliation will always be a regulated requirement.

Fully flexible, unlimited scalability and designed with security in mind, futureproof your reconciliation today by booking a demo of Aurum’s automated reconciliation platform.

Ross McGee
Ross McGee

Content and Community Marketing Manager

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Ross McGee is a marketing manager at Aurum Solutions who deep dives into financial processes, technology, and best practices to share insights that help finance professionals of all levels maximise their potential.

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