A panel at the National Automatic Merchandising Association’s show at the Ernest N. Morial Convention Center in New Orleans last week explored the opportunities and complexities of today’s payments landscape in a session titled “The New Landscape of acceptance of payments “.
Consumers are getting used to making cashless payments due to the pandemic. This is a welcome change for unattended retail, an industry that has invested heavily in cashless technology in recent years.
But because consumers and the places they frequent have different needs, retailers must tailor their payment solutions to meet their specific needs. Consumers today can use debit cards, credit cards, contactless tap-and-pay, stored value accounts, mobile wallets, or cryptocurrencies, but the options they choose will vary according to their individual characteristics and the place they frequent.
A panel at the National Automatic Merchandising Association show at the Ernest N. Morial Convention Center in New Orleans last week explored the opportunities and complexities of today’s payments landscape in a session titled “The New Landscape of Payment Acceptance.” .
Moderator Ravi Venkatesan, CTO, Cantaloupe Systems Inc., introduced the session by asking what changes have occurred in payments and how the industry can respond to them.
The payment infrastructure is growing
Panelist Jeff Beach, vice president of merchant sales solutions at Visa, offered a positive assessment, noting that the payment infrastructure has expanded despite the pandemic, driven by the growing consumer response before the pandemic. Shortly before the pandemic, cashless payments were growing rapidly in the unattended market as well as in all markets.
The pandemic has affected transactions a bit, he said, but âthe industry has continued to roll out new terminalsâ¦ as soon as companies call back (workers), as soon as traffic returns to normal, everything is fine. set up to take us back. where we were at the end of 2019. “
âFrom Visa’s perspective, debit is the engine that will continue to drive money to move,â Beach said. He cited the following:
- Cashless has gone from 30% of all transactions in 2018 to 64% today.
- Contactless payment is also on the rise, driven in part by the pandemic in addition to the growth of digital wallets such as Apple Pay and Google Pay.
- Tap-and-pay near-field communication has become more widely used, increasing from 1-2% to 12-14% of transactions.
- In the United States, Visa has 370 million tap-and-pay cards and its usage is over 25% in three cities: New York, San Francisco, and San Jose.
- For Target, two out of five transactions are now contactless.
- Contactless payments now make up 40% of fuel pumps at Costco after the retailer introduced tap-and-pay pumps six months ago.
- Of Visa’s top 300 customers, 276 have enabled tap-and-pay.
- Contactless usage is 30% in the unattended space, which is higher than in other retail environments.
What drives contactless?
The recent growth of contactless marks a big gain 10 years ago, when the payments industry first promoted it, he said. Customers did not adopt it because cell phones were not equipped for it.
That has since changed with Apple Pay and Google Pay and major retailers have been promoting it.
âPeople don’t want to touch surfaces as much as they used to,â Beach said.
The transportation industry is able to increase the use of contactless, he said, as consumers who get used to using it at transit stations will be more likely to use it. by retail.
The New York MTA has rolled out tap-and-pay for all subways and buses, he said, giving passengers a faster and easier way to pay for their tickets.
âIt keeps track of how many times you ride, regardless of how many times you ride per day,â he said.
Communication technology associated with cashless is also helping to increase its use, he said, as real-time information allows Visa to react to changes faster than previously possible.
Which solution is the best?
With all these options, how does an operator decide which one to offer?
Panelist Mike Coffey, director of strategy and innovation at Canteen Vending Services Inc., stressed that a local service provider must tailor the payment solution to the customer, which means there is no no one-size-fits-all solution the company can offer.
Customers who offer stored value payment accounts to their employees, for example, are likely to find the “payroll deduction” payment option for on-site catering services as the most cost-effective option, said Coffey.
âThey already have systems in place and a lot of thinking about how they want their business,â he said.
âThe biggest change for us from a pandemic perspective is the ability to ‘scan and go’â¦), everything is done via mobile to allow you to pay (for) a process without interacting with staff,â said Coffey said. “Some are contactless, some are getting closer to the workforce.”
Additionally, scan-and-go is frictionless and inexpensive to offer compared to some of the other automated retail technologies being introduced, he said.
âScan-and-go to me is a very cost effective way to give a consumer a great experience with very low friction,â he said. And it also gives the consumer the option to pay using different options.
âYou give them the option to choose how they want to pay,â he said.
While much attention has been paid to Amazon Go, Coffey said the experience is not without friction and the investment is not cheap.
âYou start putting cameras on the ceiling and using advanced analytics and AI to track thatâ¦ it’s really expensive,â he said.
Digital wallets, crypto bring more choice
Digital wallets also give locations more opportunities not only to process transactions faster, but also to engage more with customers and employees, said panelist Nicolas Cabrera, Product Manager, Bakkt LLC, a digital wallet. for the management of digital assets, including cryptocurrency.
âMerchants can really use this payment moment more than taking transactions,â Cabrera said.
Starbucks has recognized the benefits of offering digital payments, Cabrera said, including the ability to pay with cryptocurrency, which has become popular with many young consumers.
Although not everyone pays with bitcoin or another cryptocurrency, the crypto market continues to grow rapidly, he said.
One of Cabrera’s business goals is to unlock digital assets for use at the point of purchase. He said Bakkt enabled cryptocurrency payments at ATMs, handling all of the currency conversion and settlement.
At this point, Beach pointed out that Visa has supported crypto payments through some of its card programs. In the past six months, Visa has recorded over $ 1 billion in crypto payments.
âIt’s thereâ¦ it’s already happening,â Beach said. “Crypto is more and more common, more and more usable.”
Don’t forget the loyalty rewards
Another digital asset that can be tapped into is loyalty rewards.
âIf you want to pay with your points because you’re sitting on millions of pointsâ¦ that might not give you a lot of returns or valueâ¦ now you can use your points as a way to pay,â Cabrera said. “It’s the concept of points targeted at different customer segments.”
As for cash payment, while its use has declined, it is not dead, the panelists agreed.
âI don’t think the money is going to go away,â Coffey said, noting that some customer segments are still 60 to 70% cash users.
Also, from a regulatory standpoint, some states require the acceptance of cash for unbanked people, Coffey said. âThe unbanked is a big problem for our customers,â he said.
As the unattended POS adds more payment capabilities, Coffey said it’s important for operators to communicate those capabilities more clearly, as customers are typically unaware of these new options.
Photos: LinkedIn. And NAMA