ACI Blog

Touchless Payments: A Major Opportunity for Grocers

The grocery shopping experience has changed significantly in recent years. What was once a simple, traditional trip to the store has now evolved into a variety of consumer journeys spanning multiple delivery channels. Online shopping for home delivery or in-store pickup has gained significant consumer adoption, along with in-store innovations such as self-checkouts and ‘scan and pay’.

So, how appealing and preferred are these new options? A recent PYMNTS omni-channel grocery report has revealed how important digital channels—and touchless payment options in particular—are to consumers. The report reveals, more than a third—or 65 million shoppers— would be willing to leave their favorite grocer if other grocers offered the touchless payment options they wanted to use. Consequently, the decision to implement touchless payments needs to be a top priority for grocers.

Changing times

In a previous blog post, we explored how the grocery sector has been impacted by the COVID-19 pandemic—and how this has accelerated the demand for omni-channel shopping journeys. Now, let’s explore the demand for touchless payments as revealed in the same survey. Many of the surveyed consumers who grocery shop in-store expressed a desire in using touchless in-store payment technologies, such as digital wallets, QR codes, cards on file and POS credit options.

Keeping up with demand

Clearly this presents a major opportunity for grocers to attract new customers by adopting the payment options that consumers now prefer to use in-store.

Although we see high levels of interest in using touchless payment options, far fewer consumers are currently using these methods—suggesting an untapped opportunity.

This gap between consumers’ demand for and usage of touchless payment methods is even greater among Bridge Millennials and Generation X consumers. The research results, shown in the PYMNTS report, reveal that 23.3 percent of Bridge Millennials and 21.2 percent of Gen X consumers who would be “very” or “extremely” interested in paying in-store with contactless credit cards do not currently use them.

Is touchless here to stay?

While it may seem obvious that infection risk was enough to create a temporary demand for touchless payments, this shift in consumer behavior and preferences is unlikely to revert. After all, a touchless payments experience has many other benefits—convenience and speed among them—plus, many consumers are already comfortable with using some of these new technologies.

As mobile-native shoppers rise through the consumer buying ranks, elegantly designed, more digitally-led shopping experiences are also likely to become even more in demand. Or, as industry expert Dave Birch put it in his interview with ACI on post-pandemic payments: “This isn’t just a stop gap measure, it’s a better experience. And it’s a fundamental shift in the experience because it takes us from what we think of as the checkout experience and replaces it with the check-in experience.”

There are a number of examples of how grocers have implemented touchless payments during the pandemic, but digitally innovative British grocer Co-op already developed a mobile pay in the aisle app, so they were poised for success. After spending a minute watching the Co-op video, read the full PYMNTS omni-channel grocery report.

Manager, Product Management

Mike Yakel is a Principal Product Manager in ACI's Merchant Payments team. Mike has been with ACI for five years and has over 30 years experience in the payments industry including work at Visa, American Express, First Union Bank and several start-ups.