Will COVID-19 Accelerate Friction-Free Payments in the Fuel Sector?
Today’s consumers expect easier and more frictionless ways to pay. The upshot for merchants is that consumers who do receive convenient, friction-free experiences tend to spend more and show greater loyalty.
Many fuel merchants have started to build their long-term roadmaps around delivering payments with less friction, centered around digitally-driven innovations including mobile payments, contactless and even IoT (i.e., connected cars and payment-enabled vehicles). However, the COVID-19 pandemic has encouraged fuel merchants to shift the drive for friction-free payments on the forecourt into a higher gear.
The effect of COVID-19 on fuel payments
Visa recently reported that the use of tap-and-go payments rose 150 percent in the U.S. during March and a Mastercard survey from April found that when it comes to traditional card payments, 50 percent of customers worry about the cleanliness of signature touchpads, 72 percent prefer to skip signatures altogether and 74 percent say they will continue to use contactless payments post-pandemic. These are clear signals that in the current situation – and beyond – drivers are looking for more contact-free (but undoubtedly still frictionless) ways to pay.
Fuel merchants react
We spoke to a few of our fuel merchant customers to see whether the pandemic has affected their plans around innovations and new payment methods. One multi-site U.S. fuel and C-store merchant said, “We’re accelerating our curbside delivery offering. Curbside was already in pilot pre-COVID, but we ramped up the rollout as a result of the pandemic.”
A large Canadian fuel merchant felt that there would be far-reaching and long-lasting effects on how customers pay for fuel. “COVID-19 will alter the customer experience. Many of the changes we put in place will remain as part of our ongoing business practices, and our customers will expect a different interaction in the kiosk as their behavior has also altered. The use of contactless – either card- or mobile-based – will be the preferred option to pay, further reducing any physical contact.”
These well-planned initiatives will undoubtedly be positively received by drivers and will pave the way for further customer service initiatives in the longer term.
Keeping transactions friction-free
While it’s encouraging to see a variety of merchants successfully adapting to offer touch-free options to help keep their customer and staff safe, it’s worth issuing a few words of caution for those considering the way forward.
The fast implementation of new payment methods purely for the sake of being “COVID-secure” may cause longer-term issues if added as a bolt-on service, rather than as part of a longer-term approach to payments innovation. At an absolute minimum, any changes to the payments process should be approached from the customer journey point of view to ensure they do not cause a negative customer experience.
Relating to personal experience, I recently went out to dinner (just as restaurants began to reopen) and when the check came, the server said they had a touchless payment option – a QR code. Being in the payments industry, he took out his phone and proceeded to the interface to pay. After multiple screens and security checks, it was so difficult that he gave up and put his card on the table instead. There were missed opportunities on several levels here – the chance to provide a seamless customer experience being just one of those.
The important takeaway is that touchless doesn’t necessarily mean frictionless – and it’s important for the payments process to be both. Offering new payment options will only be a success if they deliver something better or more valuable for the customer. There is a chance here for fuel merchants to introduce effective touchless, frictionless payment journeys that help address the initial concerns about reducing physical touch and support a more digital-first customer journey.
In our next blog post for fuel and convenience merchants, we’ll be diving deeper into the opportunity for mobile and alternative payment methods and how they can help drive new experiences for fuel customers. Make sure you don’t miss it!
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