Time is Money: Local Payment and the Omnichannel Experience

The phrase ‘time is money’ may seem cliché. However, it is becoming more relevant as technology-savvy consumers use the internet to streamline the shopping experience.

News reports show that the traditional brick-and-mortar shopping experience is taking a major hit, as are classic payment methods. While e-wallets have slowly gained popularity in the United States, they now account for 20% of U.S. payments, according to PPRO research. Globally, local payment methods (also referred to as Alternative Payment Methods or APMs) are set to outperform other payment methods.

In fact, research from Worldpay suggests the use of e-wallets will increase from 18% in 2016 to 46% by 2021. In the same time period the use of many traditional payments, including cards, will fall. In some countries such as China consumers are already showing great enthusiasm for cutting-edge payment methods, such as WeChat Pay and Alipay. Vendors who fail to offer these options now risk losing a large (and growing) market share.

These trends reflect an ongoing shift in online and offline purchasing behaviors, demanding a change of similar proportions by merchants and payment service providers. Modern consumers want an enjoyable shopping experience that combines value with convenience. It’s now common to see them, smartphone in hand, comparing store and online prices. Similarly, customers research products online before going into a store.

As a result, many shoppers now have an ongoing relationship with merchants that span several channels. They interact with brands through websites, in stores and on social media, which is fast becoming a popular channel to find and purchase products. It is very clear that ecommerce merchants are growing in importance as U.S. consumers become increasingly busy. But for malls to make a comeback, retailers must provide an omnichannel experience. What does this actually look like?

Omnichannel: More Than a Choice of Format

To offer a genuine omnichannel experience, merchants must be able to engage with customers in a consistent, seamless manner across digital, physical and social media. Eventually, with artificial intelligence and facial recognition, customers that “liked” a social post featuring a product or even added an item to their online cart could be greeted by name by an associate.

Once inside the store, the customer could receive offers on the relevant items as well as product suggestions. These items could be paid for in store with an e-wallet. The purpose is to make the shopping experience more convenient, avoiding tedious lines at all costs. It has the added benefit of freeing up staff and floor space to further enhance the customer experience.

LPMs (APMs) Facilitate Omnichannel, International Trade, Security

Omnichannel engagement, and the need to provide payment at various points via LPMs, has other benefits for merchants and customers alike. For example, the tokenization process occurs when sensitive data such as a credit card number or login is substituted with a non-sensitive identifier that can be mapped against it by the merchant.

This is required for customers to engage with online merchants and to be recognized in store. It is also required to use e-wallets, which uses biometrics and PINs to recognize and authenticate the purchaser. In a similar way, the analytics used to anticipate and serve customer needs have a role in financial profiling and consequently, in fraud prevention.

It is important to keep in mind that local and global regions already show marked differences in their preferred payment methods. Merchants who fail to offer LPMs are missing out on international sales. For example, any ecommerce seller who anticipates high-value sales to China is taking a huge risk if they don’t offer WeChat or Alipay, since these are taken for granted in that market. For other markets, the provision of bank transfer or a choice of other LPMs may be more important; there is considerable diversity worldwide. In Argentina, for example, customers favor installment payments, while 61% of U.S. purchases are still being made with a credit card.

After all, time is money, and the value consumers place on convenience and preference is being felt on a worldwide scale. Merchants need to consider LPMs in order to sell cross border successfully. By failing to do so they risk losing out on thousands of dollars in sales per year. Merchants should feel confident in LPM adoption as it has clear benefits for purchasers and vendors alike, including convenience, choice and security.

Ronnie d’Arienzo is Chief Sales Officer of PPRO Group

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