The Challenge and Reward of Consolidating Payment Platforms
The majority of retailers operating internationally have multiple payment platforms, designed to suit the local markets in which they operate, and these platforms often differ between sales channels according to research carried out by ACI Worldwide and Retail Week. This reflects not only different consumer expectations and payment preferences, but also the cost of upgrading and consolidating multiple payment systems. The emergence of new payment options, combined with pressure to be compliant with the latest payment standards, only adds to the complexity.
Different approaches to platform consolidation
Many retailers take a pragmatic approach; building bridges between in-store systems – typically older legacy systems – and the online channel. For large retailers with complex business models and legacy systems (often inherited through acquisitions), consolidating and moving to one single payment platform can be viewed as simply too much of an upheaval – an unfortunate reality that is hard to disrupt.
One approach is to overlay different platforms to achieve a single view of the customer, and it’s this single view that is driving many retailers to move towards a single platform. This is particularly important for businesses where loyalty programs are a key part of the customer experience – and the bottom line is driven by customers who use a loyalty app and provide hugely valuable actionable data to the retailer.
Delivering a unified and common experience for both in-store and online is logical, though some retailers still take an “if it ain’t broke, don’t fix it” approach. One U.S. clothing retailer, interviewed as part of our Retail Week report, said: “For us, it is working and not creating a problem from an operations point of view, so why go to the next step?” In this case, continuing to maintain multiple platforms is seen as making good business sense.
You can’t make an omelette without breaking a few eggs…
Without a doubt, payment platform consolidation is difficult; and for retailers there is a concern around business disruption, and of course development and deployment costs. But it is critical for those retailers that want to make full use of the data available to them – both structured and unstructured – to deliver a superior, and seamless, customer experience across all channels. A common platform across all channels enables the holistic view of customers that retailers are looking for, and is at the heart of an effective omnichannel strategy.
This is further supported by the findings of the Edgar, Dunn & Company study ‘Payment trends in the European retail sector,’ sponsored by ACI, which found that that 79% of European retailers expect ‘seamless cross-channel interaction’ to have a significant impact on the retail industry over the next 2-3 years.
A single platform also provides a cost-effective base for cross-border expansion and entering new markets, as the payments infrastructure enables, rather than limits, growth.
Are third-party providers the answer?
Faced with increasing complexity, regulatory and compliance challenges, and the prospect of untapped growth in new markets and geographies, an increasing number of retailers would consider using third-party providers for payment-related services, either hosted or in the cloud. 84% of European retailers would consider using third-party providers, up from 60% in 2014. This likely reflects an increasing level of comfort with outsourcing, but is also an acknowledgement of the ability of third-party providers to shorten time-to-market for retailers that are expanding into new markets or innovating with new products.
While a third-party provider may not be the panacea to the challenge of consolidating platforms, it does present a pathway towards gaining the single, holistic view of the customer that is necessary to deliver a seamless customer experience, at the same time keeping payments secure and preventing fraud.
Join our live webinar Shaping UP Your Payments for Growth on Thursday, September 21– ACI Worldwide and independent analysts Ovum will discuss findings from the recent 2017 Global Payments Insight Survey: Merchants and Retailers in detail, and how merchants can shape their payments strategy to improve customer experience and promote growth.
Register here: www.aciworldwide.com/lp/shaping-up-your-payments-for-growth
Related blog posts
Mobile is Transforming the Travel Sector
February in South Africa means long, hot days, and seemingly endless sunshine (interrupted only by the occasional thunderstorm). Temperatures often top 30 Celsius (that’s mid-eighties for my American friends) and nearly every day is deserving of a braai (that’s barbeque for the rest of the world). But I do spare a thought for my colleagues and friends in Boston, New York, Munich and London (amongst others) at this time of year, as they slog it out through the darkest and coldest months of winter. Who’s to blame them for seeking a bit of light escapism as they plan and book their spring and summer vacations?
“Roads? Where we’re going we won’t need Roads” - Open APIs and Financial Services
The word ecosystem is often used when discussing payments. Whether it’s to describe how a payment is made or to discuss a partnership or even understanding your place in the value chain. Though part of the issue with how we present the ecosystem is that we tend to emphasize only small portions of the overall picture, that is to say if we are discussing payments to a merchant or retailer, the picture shifts to just show eComm, mComm and POS while partially ignoring the Financial Institution, and to a lesser extent the FinTech’s domains. But those days may be coming to an end as we have begun the transition to a new payments ecosystem.
PSD2 Regulation Will Bring Down the Walls Not Build Them
The Payments Services Directive 2 (PSD2) is shaking up the industry, and for good reason. There is sometimes a tendency for the payments ecosystem to expect doom and gloom when it comes to new regulation; seeing it as restrictive, unnecessary interference, or costly. The reality is that PSD2, along with other regulatory changes across Europe and the world, offers a massive opportunity for all participants in the payments ecosystem to carve out new revenue streams.
Connected Devices are Opening Up New Forms of Payments and Partnerships
Of all the trends that are currently shaping – or re-shaping – the nature of payments, none is more significant than the rise of the Internet of Things (IoT). We often talk about the payments ‘ecosystem’ and the complexity that exists between the many participants that are part of this ecosystem, but this complexity will expand exponentially as millions – no, billions – of devices become internet capable.
Driving Toward Innovation in Digital Banking User Experience
The need for delivering on a user experience strategy necessitates the use of common and sometimes confusing lingo like CX, UX, information architecture, UX design and UI design. It introduces ways to gain deeper understanding of customers through methods like personas, journey mapping and Kano analysis. It commands phrases like customer-centric, experience-driven, and ideation/visioning. In the past 4 months, I have interviewed more than half a dozen agencies to engage one that could go beyond the buzzwords and the methods described above. I want to be convinced that great and meaningful changes can happen to UI’s. After all, talk is cheap.