38
Future of Retail — Payments Innovation
issue 02
In 2015 growth in online sales hit 11%, with e-retailing for the first time generating over £110 billion of expenditure.
significantly lower cost base, retailing online has had the upper hand. Retailers know that reacting with speed to their
customers’ demands and changes to shopping habits or choices is what will ultimately determine their success or failure. What is increasingly clear is that consumer behaviour is changing faster than ever. In 2015 growth in online sales hit 11%, with e-retailing for the first time generating over £110 billion of expenditure. We’re in the midst of a global transformation as more and more people are moving from the offline and disconnected world to being constantly connected. Consumers all around the world are adopting smart devices at an astounding pace, for retailers this opens up more and more opportunities to engage shoppers in new ways – changing the way we interact, browse and shop. This pace of change is expected to continue with 50 billion connected phones, tablets and other devices projected by 2020, many times more than the world’s population. This evolution of shoppers’ behaviour means retailers
need to offer a payment solution that best meets their customers’ needs in any channel they choose to transact in, or they run the risk of losing that sale. MasterCard has developed MasterPass with this
modern retailing puzzle in mind. MasterPass stores customers’ card details – of all payment networks - and delivery addresses within a secure wallet. The advantage of this means when paying online, you simply need to choose the MasterPass button at the end of the checkout process and sign in. No more typing in card details, expiry dates or address information. Digital wallets offer a practical and convenient solution
to the issue of higher ‘basket abandonment’, which is becoming ever more prevalent as consumers turn to ‘m-commerce ’ and smaller screen devices. Equally this shift to smartphone commerce means digital wallets provide the best combination of payment security, ease and convenience in an App environment or physically in store using contactless technology. Biometric
authentication of contactless smartphone payments, such as Apple Pay or Android Pay or banks’ own solutions, already means the £30 contactless cap is no longer required.
IN STORE INNOVATION High street and store based sales still account for the overwhelming majority of retailer sales and as such the focus on innovation at the physical point of sale has continued at pace. However, the dependency on sales made around peak discounting periods, such as the pre-Christmas Black Friday weekend, is becoming an increasing issue for high street retailers. One piece of innovation coming to the UK and Europe this year, which offers retailers a solution to converting more sales throughout the normal shopping year, is MasterCard Instalments. This new payment option will enable UK credit
cardholders to split transactions across equal monthly instalments using their existing credit line from their card issuer. This differs from standard credit card purchases, as the in-store point of sale terminal will ask the customer whether they want to pay in full or split the payment cost over say 3, 6 or 9 months. Thus giving shoppers who wish to spread the cost, the control of knowing exactly how many months it will take to pay and exactly what the monthly payments will be. Expectations are that there will be an Instalment card issuer and several retailer partners taking part in a UK pilot later this year.
QKR! THAN EVER A great example of where digital payment innovation meets the physical world is the Pay at Table App – Qkr! MasterPass. Already available at all UK Wagamama, ASK Italian and Zizzi’s restaurants, it’s coming to all Carluccio’s and several Young’s Pubs before the end of the year. The App brings customers a more convenient and fuss-free way to pay for their meals when they are ready, and split bills with friends or colleagues if they wish. All from their
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