02 May 2014
Ease of Payment for Users, Complexity for Retailers
In the past, a loaf of bread bought at a bakery would be paid for in cash physically collected from a bank. Those days are long gone. The internet now offers all consumers a wide variety of purchasing options. They can decide where and when they buy a product and how they wish to pay for it. For retailers, the many purchase options have lead to increasing complexity, as they need to make sure the various flows of goods and payments are handled correctly: the more channels are used, the bigger the challenge.
When extending their business to the internet, retailers must carefully consider the existing and new payment options. “A smooth flow of payments is essential in ensuring successful operations”, explains Huib Klarenbeek, Managing Director of Equens SE subsidiary PaySquare SE. PaySquare’s services in the Benelux are primarily intended to enable the company’s clients (e.g. retailers, caterers and hotel owners) to accept international debit cards.
Credit cards are a popular means of payment for international transactions. In the Netherlands, the number of credit card payments is not very high, but some Dutch shops want to offer an alternative means of payment to the standard PIN solution, in order to attract as may clients as possible. PaySquare supports retailers in the acceptance of electronic payments, and is ready for a future in which payment – rather than the transaction method – is the standard.
No more technical limitations
Consumers increasingly think they can perform a transaction at any time. Thanks to the internet, purchases are no longer restricted to shop opening hours. From a technical point of view, there are no longer any limitations, and anything is possible at any time. Klarenbeek: “This has created some additional challenges for retailers. When selling day and night via a variety of channels, retailers need a clear overview of what they have sold. Reconciliation is also important, in terms of whether the sales match the payments received.”
For virtual and physical retailers, it is important to have clear overview of their goods and money flow. The means of payment constitutes a further challenge for retailers, because in addition to the variety of methods they already offer – such as Visa, PIN, MasterCard and cash – new innovations are also entering the payments market. Klarenbeek: “In time, payment will be the standard; the system supporting it will no longer matter to the consumer. Retailers need to start preparing for this reality now.”
The future of payments cannot be predicted
According to Klarenbeek, it is not possible to predict the future of payments. Payments are no longer handled exclusively electronically; it is a mix of physical and virtual processes. “Consumers check out a product in a shop, but if the colour or size they’re looking for is not in stock, they order the product on the internet. From a consumer’s perspective, the flows are increasingly overlapping one another, but the question is how we will ultimately pay.”
Klarenbeek does not have the answer to this question, because there are too many options, and new options will undoubtedly be added in the future. Possible payment trends were recently outlined in the Shopping2020 report blog, which discusses developments in payments in more detail. “Will we all have a chip in our body or will mobile payments be the future? Will we pay biometrically with our fingerprints, or will the payment process include all manner of additional authentication methods?” According to Klarenbeek, this depends on where a product is bought and on the nature of the product. “For a lunch at a company restaurant, other methods will be used than for the purchase of a home.”
Standardisation of innovations
It is hard to predict what direction these innovations will take. So far, they have been rolled out in the market in a fairly standardised way. In the Netherlands, for example, the Maestro debit card (previously PIN) is almost universally accepted. Klarenbeek: “Internationally, there are also differences in payment methods and the way in which innovations are implemented. In Germany, for example, cash payments remain relatively common, while Poland has skipped a number of stages and is strongly advocating contactless payments. There will always be local payment preferences, so there is no point in trying to impose a standard; it is better to facilitate such local preferences. This is one of the reasons why PaySquare serves its clients from within each country.”