Why Merchants Should Embrace Omnichannel Payments Now
By Gregg Aamoth, CEO of POPcodes
The Case for Embracing Omnichannel Payments Experiences
The payments industry has evolved immensely, from providing solutions to process consumers’ in-person payments via checks, credit cards, or debit cards, to supporting a blend of online, in-store, and, essentially, invisible “embedded” payments models. The methods consumers use to tender their payment have also evolved, from the entry or swipe of a card to the tap of chips, digital wallets, mobile phones, watches, and a seemingly endless variety of digital alternatives.
When the world went into lockdown, online shopping rapidly increased and more people activated their digital wallets for a seamless, “one-click” online checkout experience. As normalcy returned and consumers resumed in-person shopping, merchants were expected to recreate the same checkout experience at physical locations.
To meet consumer expectations, merchants and their service providers must strive to create a fully omnichannel experience that supports and connects these payment methods. Whether shopping at brick-and-mortar locations, online, or completing a purchase via the phone, merchants’ technology must seamlessly support the tender and acceptance of the various payment methods.
Keeping up with Modern Customer Experience Expectations
Embracing omnichannel solutions can change the merchant-to-consumer experience, enabling seamless online and in-person checkouts. This simplifies the payment process allowing merchants to also accept rewards, loyalty points, and coupons. Many service providers offer smart terminal technology to enable these experiences. Giving merchants and their customers the ability to quickly pay with credit cards or loyalty points, while utilizing promotions to create the same shopping experience they interact with online.
Unfortunately, many merchants aren’t aware of the smart terminal’s untapped capabilities and still rely on legacy systems that only accept basic card payments. This puts them at a significant disadvantage, as they lack the infrastructure to support the latest online and in-store payment capabilities that today’s consumers expect.
IMD research estimates retailers lose between 10% to 30% of sales when they fail to meet omnichannel shopping expectations. To combat this, merchants must upgrade their online and in-store payment infrastructure to take advantage of opportunities to boost the customer shopping experience and increase revenue. If they don’t, they risk losing business to competitors already offering a fully omnichannel shopping, payment, and fulfillment experience. Addressing online and in-store infrastructure needs with modern payment systems will address challenges with refund processing, which will meet merchants’ current needs for diverse payment options.
Upgrading online experiences to enable single-click payments and incorporating technologies like buy now, pay later (BNPL) will also enhance customer satisfaction. Merchants should also focus on upgrading in-store infrastructure to accept BNPL options, expand tap capabilities and enable payment through wearable items.
Providing diverse payment tendering options is essential for merchants to cater to customer preferences and to enhance the overall shopping experience. Merchants who offer a range of payment options ensure they can accommodate customers’ diverse needs. By enabling different payment methods, such as credit cards, digital wallets, BNPL, and loyalty points, merchants can create a convenient, personalized shopping experience that resonates with customers.
Current Payment Challenges for Merchants
Early adopter omnichannel merchants and their customers first experienced specific payment challenges. When customers paid through their mobile phone or on a merchant’s website, the customer attempted to return a product for a refund in person. The online transaction record was linked to the location and credit card on the backend but wasn’t connected to the merchant’s physical store location. This made it look like the customer never purchased the product at that location, which resulted in the attempted refund being flagged as fraud on the backend. Now, most processors offer omnichannel payment acceptance, allowing consumers to buy online and return products in-store. This process ensures that the return isn’t flagged as fraudulent.
However, if the customer purchases something online and wants to pick it up at the store, there also needs to be a seamless process. By integrating online identity verification, with the in-store pick-up process, the risk of theft and fraud is significantly reduced. This makes the fulfillment experience as simple as possible for the consumer.
Or, if a shopper receives a promotion in their email or online loyalty account, the merchant needs to have a way to accept it in the store – otherwise, they risk damaging that relationship with the customer. Additionally, merchants can benefit from the data an omnichannel payments platform provides by giving them a full picture of their customer’s behaviors and preferences. Those insights can enable even small merchants to market more efficiently and make data-based decisions. The more touch points they can track, the better they can understand the customer and improve processes.
The payments ecosystem continues to innovate, evolve and push customer experience boundaries. Payment processors, ISOs, and merchants must work together to harness the power to create a robust and unified industry. By upgrading both online and in-store infrastructure and improving processes across the board, payments can take the lead in delivering omnichannel solutions on a widespread scale.