For decades, the phrase ‘cash is king’ was more than just a catchy slogan, it was a reality. Now, in 2022, we are living in a digital age and payments look very different to how they did for older generations.
Today, online and contactless payments rule the retail market, with many people opting for the convenience of a debit card over physical cash.
When the pandemic hit, cash was rejected at most shops due to hygiene reasons and so more customers than ever before resorted to paying by card, contactless, or ordering online. This uptake has seen convenience trump cash use. But what does the future look like?
“Technology has already transformed the retail industry beyond recognition. These days, almost every consumer is an online customer. The shift from in-store exclusivity to omnichannel spending has pushed retailers to make huge adjustments in the way that they do business – and those who failed to adapt have been left behind.” – Retail Gazette.
The Role of Technology
According to CustomerThink, almost 50% of customers who can’t use their preferred payment method abandon their cart.
Technological innovation is changing the way we pay for things. You can pay with Chip and PIN, using contactless, online, with the swipe of your phone or Apple watch, or via email with systems like PayPal. Technological innovation means that apps, watches, and mobile wallets are all commonplace, offering both a convenient and secure way to make payments.
Technology is also creating value and stimulating increased growth in the UK’s retail sector. Without the need to carry cash and with payments so easy to make, it has never been easier for consumers to make spur-of-the-moment purchases of any amount. No need to carry cash, no need to count out banknotes, no need to store change, and no other barriers to purchasing goods or services. Technological innovation has made payments instant, secure, and guaranteed.
PDQ Machines and Faster Payments
PDQ stands for “Process Data Quickly”. Most people are familiar with the term Chip and PIN machine. With a PDQ machine, customers swipe their card through it and the machine then prints out a receipt. It’s one of the easiest and most reliable ways to pay by card and retailers not offering PDQ are losing customers fast.
PDQ machines are a must for retailers who wish to meet customer demand and provide easy and secure methods of payment. Available for in-shop countertops or as portable or mobile devices, PDQ machines are here to stay.
The Future of Credit Card Payments
Credit cards are an easy way to buy something immediately and pay for it later. They are beneficial for purchasing expensive items or services that can then be paid off over a set period of time or at a later date. What’s more, they are used to build good credit scores, which can help individuals buy a house or a car in the future.
Credit cards are still an extremely popular method of payment. However, they will have to evolve to the consumers’ demands for convenience in order to remain as popular as they are.
The Future of AI Payments
AI payments have been quickly adopted in the retail sector, playing a key role in things such as fraud prevention, fulfilment, and logistics. At this stage, not many people know the true impact AI will have on the future of retail payments. However, there are two ways we believe AI will influence retail payments moving forwards: personalisation and connectivity.
AI uses machine learning and chatbots to effectively personalise the consumer’s shopping experience. Supporting the shopper from initial enquiry through to checkout, AI has become more refined over time. Now, customers can’t typically tell whether they are speaking to a real person or a robot. AI will provide a connection between retail stores and individuals, reducing any friction at every level of the buyer’s journey. This ensures better customer service than ever before and higher conversion rates.
Digital Payment Security in the Future
Digital payments have never been as secure as they are now. Technological innovation has meant features such as Chip and PIN, two-factor authentication, and security checks provide an extremely high level of security. Payment protections mean that digital payments are secure, whether you’re shopping online or in-store. What’s more, you will be eligible for full compensation from your bank if foul play, theft, fraud, or other financial crime is reported and discovered.
How Open Banking will Help Retailers
Open Banking is a secure method of sharing your financial information with someone else. Open Banking offers two main benefits to UK retailers; access to more customer data so they can tailor their products, personalise the buyer journey, and provide a flexible service. And eliminating the intermediary so that payments can be accepted directly. Both of these benefits are significant as they mean reduced costs and risk of payment fraud. As Open Banking advances, retailers will enjoy greater opportunities for platform integration and be able to further improve the quality of their payment systems.
Gift Cards and Store Credit
Gift cards and store credit are two payment methods you don’t often hear about but are actually a retailer’s most powerful tool for building long-term success. Store credit lets retailers reward existing customers, while gift cards introduce new people to stores without any risk. What’s more, they enable retailers to keep money in their businesses because even if a gift card never gets spent, that sale remains.
What is the Future of UK Retail?
Uncertainty has been overshadowing the retail industry throughout the pandemic, as store after store have closed their doors. But it is important to look to the future – especially as restrictions are easing – as retail still accounts for a significant portion of jobs in the private sector, with 1 in 10 Brits working in retail. And with the move to online shopping, retailers are doing what they can to meet consumer demands and set themselves up for a bright future.
Harnessing the latest technological innovations and implementing modern online payment systems means retailers will ensure long-term success even in the midst of challenging times.
Final Thoughts
To thrive in today’s world, retailers need to quickly adopt new and emerging payment methods in order to meet consumer demand. The faster and more effectively retailers can meet the demands of their customers, the better equipped they will be for a future of success.