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Spoiled for choice

UK consumers want choice when it comes to ways to pay, says Sage Pay chief executive Seamus Smith

“Consumer expectation is driving innovation in the payments space, both online and offline, and businesses need to move with the times or risk losing customer loyalty. The majority (90%) of consumers we surveyed say it’s important for businesses to offer customers a diverse range of payment methods. What’s more, 58% claim they would be more likely to shop somewhere that offered multiple ways to pay. “Likewise, businesses say the key benefits of offering a range of payment methods is access to a wider customer base. Customer demand is still the driving factor for businesses when it comes to introducing new payment methods, though legislation has become a more important consideration than beating the competition this year. Increased administration is thought to be the main disadvantage to offering different payment options. Only a quarter of businesses see no disadvantages, which suggests there is more to be done to make this process hassle-free. “Contactless is still going from strength

to strength in the UK. In 2015, 9% of consumers rated it highly, in 2016 this has grown to 14% and will continue to grow. Thirty-eight percent of consumers say they carry this payment option with them.”

advanced systems on the market can also collect a huge amount of data about custom- ers’ preferences, which can then be used to predict and present suitable products for the future, increasing customer loyalty and, ultimately, revenue. “In the US in particular, we’re seeing a num- ber of new generation point of sale devices coming to market that are very much geared around this notion of being able to identify when a customer comes back to a store and start to accumulate data on their preferences and purchasing habits,” Smith remarks. “Ultimately, that can enable a business to present personalised offers to those custom- ers to ensure that they have a high volume of repeat business, which is very important for certain businesses.”

THE RISE AND RISE OF MOBILE When it comes to payment mechanisms themselves, both contactless and mobile are clearly becoming a bigger part of the equation. Indeed, according to Sage Pay’s 2017 Pay- ments Landscape Report, contactless spend is now at record levels, with 38% of consumers now saying they regularly carry this payment option with them, while almost 69% of con- sumers have used mobile payments to pay or receive money in the last six months. This is a huge increase from 2015, when only 1% of those surveyed said they had used a mobile wallet and 4% a mobile app.

32 | Technology Prospectus 2017

“It’s become a must to be able to offer seam- less mobile payment applications and there are some good reasons for that,” Smith explains. “The contactless payment limit is now £30, which covers a reasonable propor- tion of transactions in the catering world and the cost of accepting those payments is also typically lower than when the card is presented into a terminal. Moreover, those payments come with all the guarantees of electronic pay- ments rather than the risks of cash payments, and it’s something customers expect.” “As mobile payment technologies get more advanced, customers are trusting their func- tions and security more and more,” adds Xu. “As these technologies progress, and custom- ers become more confident using them, they will expect businesses to offer them as a stan- dard. We’ve seen this with many payment technologies and methods over time and mobile will be no different.” That said, cash, credit and debit cards

remain the main payment methods carried by consumers in 2016 (Sage Pay’s research found that 35% of those surveyed regularly carry debit or credit cards, while PayPal also ranks highly with UK consumers, sitting just behind cash and cards as the most preferred payment option), meaning it’s still absolutely essential for hospitality operators to offer their custom- ers a choice of payment options. “The message from Sage would be that busi- nesses need to be open to capture as much busi-

“You shouldn’t just be saying ‘I want a new card-processing payment terminal’; the question is ‘What’s the application that can give me the most efficiency and best customer satisfaction in my business?’”

ness from their customers as they possibly can and that means offering as wide a range of pay- ment methods as possible,” Smith says.

NAVIGATING A CONFUSING LANDSCAPE One of the biggest challenges facing operators today – particularly smaller businesses that may not have considered anything beyond a traditional till before – is that, with so many technologies and applications becoming widely available, it can be a busy and confus- ing landscape to navigate. For this reason, Smith’s main advice is to

talk to trusted payment service providers who can really explain what’s coming along and which systems and applications can benefit their specific business. “You shouldn’t just be saying ‘I want a new card-processing pay- ment terminal’; the question is ‘What’s the application that can give me the most

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