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
The EMV Deadline Has Been Extended for U.S. Fuel Merchants – Now What?
U.S. fuel stations were originally supposed to be EMV-compliant by October 2017, but due to complications and costs at the time, the deadline for EMV at the pump was extended for three years – and it has now been pushed out further to April 2021 due to the COVID-19 pandemic.
Merchant Fraud in the Age of COVID-19: We Need to Prepare Ourselves for a “Tidal Wave” of Attacks
With millions of consumers around the world self-quarantining at home, online shopping for goods, services and entertainment has become the new normal for many. A recent analysis of our own data has shown that average transaction volumes in the retail sector in March rose 74 percent compared to the same period last year.
Are Chargebacks Making a Comeback for U.S. Fuel Merchants?
With the planned EMV implementation date looming for U.S. fuel merchants, we’ll be spending some time ahead of the October 2020 deadline looking at the fraud issues affecting fuel merchants and how these might change through the final quarter of this year.
Rebirth of The High Street: An Unintended Consequence of COVID-19?
You don’t know what you’ve got until it’s gone. How true that is right now for the U.K.’s High Street (or for that matter local retailers in communities around the world) and our desire to shop.
Merchant Considerations for Protecting Payments During the COVID-19 Crisis
As the spread of COVID-19 continues to impact businesses of all shapes and sizes in unprecedented ways, the power of payments has never been clearer. Drastic increases in online transaction volume and the need for essential in-store payment processing create new challenges for online and brick-and-mortar retailers alike. Here are a few ways that merchants can protect their business – from the perspective of payment processing and fraud mitigation – during this uncertain time.
Positioning PSPs for Success in 2020: Scalability, Flexibility and Globality
We used to say that NFRs (non-functional requirements) such as scalability and availability didn’t really make for attention-grabbing headlines, but in fact, 2019 has shown us that these NFRs are often not far away from the biggest stories. A major outage or downtime – be it for bank or merchant – makes headlines in its own right, but we’re increasingly seeing a clear link between NFRs and a company’s growth trajectory. Those companies that are generating positive awareness from their ambitious global expansion plans, innovative customer experiences, or unique approach to fighting fraud – they are achieving this off the back of technology solutions that deliver world-class non-functional requirements. Scalability, flexibility and globality underpin these growth stories – and this message comes out clearly in speaking with some of our leading payment service providers (PSPs), which are supporting the growth of thousands of merchants around the world.
Three Merchant Payment Trends to Watch in 2020
In 2019, merchants everywhere were challenged by pressure from new entrants, the continued breakdown of traditional industry boundaries and growing customer preference for a digitally-led or digitally-influenced purchasing experience.
Learn How to Claim a Greater Slice of the Mobile Payments Pie
U.S. Wireless Players: $14.3B is at stake – are you in?
Mobile commerce is thriving as consumers seek out convenient, quick and secure shopping experiences. And transaction growth on mobile devices is outpacing traditional desktop and in-store channels, aided by click and collect and one-click purchasing trends. For U.S. telcos, the message is clear: proactively add value to the payments process, or risk missing out on increasing your portion of the growing mobile payments market.
How to Survive Black Friday and Cyber Monday… and Provide a Great Consumer Experience
As Black Friday and Cyber Monday approach, shoppers and merchants alike await amazing deals and a welcome boost in sales, respectively. I took a moment to speak with two of ACI’s merchant payments and fraud experts, Andrew Marshman (merchant payments lead, Europe) and Erika Dietrich (VP, Global Fraud Prevention Risk Services) about what merchants need to know as they head forth into one of the biggest shopping seasons of the year.
Strong Customer Authentication in Australia: Reducing CNP Fraud and Streamlining eCommerce Payments
Minimizing fraud without harming the customer experience can be done – using the right tools
In 2017-18, card-not-present (CNP) fraud cost Australian eCommerce AUD $478 million and accounted for some 85 percent of all fraud on Australian-issued cards1. In 2016, CNP fraud in Europe represented 70% of all card fraud2. Seriously uncomfortable numbers.