Let’s Get Phygital: eCommerce Is Coming to a Store Near You
While payments vendors continue to pitch and strategize with a focus on omnichannel, the omnichannel story has already moved on.
Make no mistake – omnichannel remains important and the best vendors have solutions that provide a single cloud payments service capable of delivering a single view of the customer across stores and digital channels. And the best retailers utilize these solutions to deliver efficient cross-channel shopping experiences. Meanwhile, many other retailers get by (though seldom rise to the top) with a siloed approach.
Is the future of retail a single channel?
Amazon Go – and a growing number of other scan-as-you-go offerings – mean that digital payments are now also in-store payments, not a separate channel. While this trend might be in its infancy, eventually, terminals in their current form will disappear completely. Customers will use their own devices – or no device at all. One of the buzz words of the past couple of years has been “frictionless” – with the ultimate goal being, of course, to reduce friction of in-store payments to the point where good customers essentially enjoy a “shop-lifter experience.”
That’s still a long way-off – and the current cost of infrastructure to deliver an Amazon Go-like experience isn’t to be sneezed at – but the digitalization of the in-store payment is a step in that direction. And as a consequence, the term “phygital” is starting to gain in popularity. Retailers now need to think digital when it comes to payments acceptance in store. The rise of alternative payment methods has been an eCommerce trend for a number of years, but they are now entering the physical store space, and retailers need to accept these alongside cards.
We’ve already seen forays into this – for instance from PayPal. But only looking at card-dominated North American or European markets obscures the pace of change and impact of this trend on a global scale. Alipay, often described as a “lifestyle super app” rather than an alternative payment method, is the most commonly cited example – and acceptance beyond China is growing, from the fashion houses of Paris to hop-on hop-off bus tours in South Africa. Growth markets, unimpeded by the legacy of a card payment culture, will adapt to the “phygital” world more quickly, but change is coming to mature markets too.
Consolidating payment platforms to cater to an expanding world of payment options
Retailers need to respond to this emerging trend by focusing their IT payment strategies on using cloud-based payments services that process traditional in-store terminal payments in the same way as they process digital payments. That means using the same platform, the same levels of service, the same payment types, and shared tokens – so that they can take payment from shoppers in the ever-expanding connected world of payment points homogenously. Those that look at digital payments differently to in-store payments and have different teams managing them will struggle to meet this challenge.
Find out why ACI Worldwide was named as a Leader in global merchant payments by independent research firm Forrester.
Related Blog Posts
What’s Next for Nordic Payments? P27 and the Rise of Real-Time and Cross-Border
The Nordic region has long been considered a pioneer of digital payments, with some of the lowest cash usage levels in Europe; however, the impact on cross-border payments has been limited when compared to progress on the domestic front. And this is a crucial area to address for a region with large volumes of trade and tourism between neighbors, as evidenced by the fact that 18,000 Swedish workers commute to Denmark on a daily basis. Not surprisingly, improving the cross-border payments experience and efficiency is a high priority.
Digital Overlay Services Unlock the Value of Real-Time Payments
The global payments industry continues to drive toward true real-time, with the potential opportunity for corporate banking often cited as the most lucrative.
Real-Time Payments Hits its Stride in the U.S.
The recent announcement of FedNow in the U.S., the launch of cross-border services like SWIFT gpi, and multiple real-time payment systems including The Clearing House’s (TCH) RTP system and Zelle underline the fact that real-time payments are here to stay. The need to deliver real-time payment services to customers has never been more pressing for banks, credit unions, processors, acquirers and fintechs. However, the U.S. payments ecosystem – and its infrastructure – must keep pace with global markets to remain competitive, and interoperability between real-time payment systems will be key.
How Do You Drive Full Value from SWIFT gpi?
As part of SWIFT and ACI Worldwide’s joint mission to accelerate adoption of SWIFT gpi, ACI’s SWIFT gpi global marketing lead Zhenya Winter spoke with Daniel Lynch, Data Analytics and Payments Innovation Lead at SWIFT, and ACI’s Global Head of Real-Time Payments, Craig Ramsey, about some of the key questions raised by attendees of our second Global Webinar: Drive Full Value from SWIFT gpi. The relevancy of these was reinforced at Sibos 2019, the SWIFT community’s annual conference, which recently took place in London.
India’s Unified Payments Interface: Breaking the Billion Barrier
September brought about quite a stir in the Indian payments ecosystem, with three years passing since the launch of UPI (Unified Payments Interface), and the realization that UPI is closing in on a significant milestone: one billion transactions per month. In September 2019, UPI clocked 955 million transactions, amounting to 1.61 trillion rupees (INR), demonstrating the extent to which Indian consumers have exuberantly welcomed real-time payments.
The Need for Financial Inclusion in Developing Countries
The payments ecosystem globally is changing – and the idea of financial inclusion is increasingly featuring as part of long-term strategy. At a glance, financial inclusion means that people and businesses have access to important financial products, services and data, such as transactions, credit cards, payments, savings and insurance, and that these are delivered in a sustainable way. The challenge for banks lies in being more inclusive and meeting social needs, while remaining profitable and increasing market share.
How to Maximize the Value of Partnerships Between Fintechs and FIs
The LATAM Open Banking & Fintech Partnership, organized by Connect Global Group, was held earlier this year in Mexico City, and ACI participated as one of the forum partners driving discussions on how to maximize value from collaborative partnerships between FIs and Fintechs. We explored the invaluable benefits of open API and strategies to differentiate the offerings of FIs and Fintechs, address consumer demands, and best practices for implementation aligned to regulatory requirements.
Universal Confirmations: Get Ready for 2020
With the arrival of universal confirmations, we sit down with some industry experts to find out more about what impact this will have on transforming cross-border payments. We’re welcomed by Fabien Depasse - Head of SWIFT gpi Customer Success at SWIFT and Craig Ramsey - Head of Real-Time Payments at ACI Worldwide.
How to be a Payments Trailblazer – The Seven Habits of Highly Innovative Organizations
The new Culture of Innovation Index from Ovum and ACI identified segments—from banks to intermediaries to merchants to corporates—at the cutting edge (of innovation) across the payments ecosystem. But what is most notable about those segments that have reached ‘trailblazing’ status is the apparent lack of commonality between them. No one segment, nor one region fosters better innovation. In fact, what’s driving these segments/organizations to be best of breed is their own culture of excellence. The only thing they have in common is their attitude.
How will SWIFT gpi Impact Latin America?
As the world continues to transition toward real-time, and technology continues to evolve, new challengers are disrupting the market with value propositions including real-time cross- border payments. The competition has inspired SWIFT to work with the industry and challengers to create the Global Payments Innovation (GPI) program, which radically changes the way banks interact with their correspondents and offers improved transparency and customer service to their customers.