Outdated Payment Systems: Is Your Checkout Costing You Customers?
Key Takeaways:
- Customer expectations for seamless, fast payments are rising sharply
- Maximum choice, including digital wallets and Open Banking, is essential
- Smart technologies, fully integrated, can help retailers maximize opportunities
- Expert tech support is vital to turn concept into successful reality
As the world of retail continues to evolve, modern technology has a vital role to play in helping customers pay as easily and quickly as possible. And this applies just as much at checkouts in physical stores as it does when buying goods and services online. Amazon’s cashless stores, based on ‘just walk out’ technology, are an excellent example of how technology can completely transform even the most everyday shopping experiences.
But even looking beyond customer convenience, smart technology is solving some of the most pressing B2C payments challenges that retailers are facing today. With the future of cashless payments rapidly evolving, we'll explore how those technologies are being applied in practice.
Learn more about how payment systems can make or break the customer experience in this blog.
Challenges Associated with Common Payments Technologies
Making payment and checkout experiences seamless and user-friendly can often prove to be easier said than done. From traditional self-checkout to advanced RFID cashless payments, many retailers have faced practical challenges integrating the technologies they want to use, and meeting the rising expectations of consumers at the same time.
These challenges include (and are not necessarily limited to):
Limited Payment Options
According to Hotjar, nearly 10% of online shoppers abandon their carts because stores didn’t offer enough payment methods for them to choose from. It’s clear that customers want the maximum choice available, so that they can always pick the payment option they’re familiar with, including Open Banking, alternative payment methods, or Buy Now Pay Later (BNPL).
Outdated Technology
Customers also increasingly expect to be able to pay without having to manually key in any payment information, thanks to mobile technology such as Apple Pay and Google Pay. They are likely to favour retailers that can offer this technology over those that don’t.
Lack of Personalization
Research has found that retailers can boost their sales by as much as 20% by personalizing the checkout experience, including loyalty and rewards linked to regular omnichannel shopping behavior. At the same time, customers expect payment experiences and options to be similar across in-store and online checkouts, so that they can prepare to pay with confidence and not end up frustrated.
Limited Global Support
Customers want to be able to buy things from any part of the world, without facing restrictions around currency and payment options. Developments such as the European Union’s Single Euro Payments Area (SEPA) are designed to facilitate cross-border transactions for customers paying in euros; retailers who don’t support multi-national purchasing will lose custom globally.
Smart Technologies Addressing Payments Challenges
None of the challenges listed above are insurmountable, and many forward-thinking retailers have been adopting smart payments technologies as a way of dealing with them and reaching out to customers like never before.
Through 2025 and beyond, the payments landscape is being reshaped by numerous innovations including biometric payments, voice commerce, mobile cashless payments, A2A payments, and various other types of cashless payments. However, two particular technologies stand out as driving the most significant changes:
Digital Wallets and ’Super Apps’
As many as 54% of global eCommerce payments are expected to be made using digital wallets by 2026. For many consumers, the most convenient way of making these payments will be through financial ‘super apps’ that combine payment and loyalty offerings into a single platform, such as PayPal, WeChat Pay and AliPay.
This will enable customers to manage all of their financial dealings more easily than ever before, from making purchases to managing crypto investments and virtually everything in between. Retail technology development is moving in this direction at pace; Ciklum is already working with one client with this specific goal of full integration in mind.
Open Banking Payments
Open Banking payments are relatively low-cost for businesses and merchants to provide and process, which means they represent a huge opportunity for retailers to offer payment flexibility while protecting profitability. This is especially the case in the United States, where Open Banking is quickly gaining traction.
One way of maximizing potential in this area is to leverage the data obtained when supporting Open Banking API infrastructure, including transaction history, customer behavior and demographic information. This data is key for personalizing payment and loyalty solutions to the individual customer and meeting their expectations, which is why we at Ciklum are focusing on unlocking this opportunity for retailers all over the world.
This should form part of a wider personalization strategy that integrates artificial intelligence and machine learning to individualize the buying journey from start to finish. Beauty retailer Sephora is an excellent example of getting this right, leveraging user-generated data such as images that users submit and previous shopping history. Not only can this help provide personalized product suggestions, but it can also inform sales advisers who can guide customers with suggestions in real time.
Explore Ciklum’s Smart Payments Technologies
To make the most of all the opportunities that smart payments can deliver, it’s important to work with an expert technology partner that can support you from initial concept, through development, to successful implementation. And that’s where Ciklum’s depth of experience with retail and payments technology can be so invaluable.
Examples of our success in the retail and payments sector include:
- Future-proofing the payment infrastructure for Swedish gaming company Betsson, delivering a modern payment platform that can cover multiple jurisdictions and enabling millions of transactions to be processed every day
- Developing a mobile app for a UK-based FinTech business, so that business owners can understand their sales activity thanks to AI-generated insights
- A strong partnership with the payment technology experts at Stripe, which allows us to empower customers with hyper-personalized payment experiences, from checkout conversions to mobile optimization
We can deliver the same levels of innovation and integration for your in-store and online payment experiences, too. Get in touch with our team today to find out more.
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