Cashless, Contactless And Checkout-less
In the UK, 2017 was the year that card payments outstripped cash for transactions in stores. Sir Jon Cunliffe, deputy governor at the Bank of England, commented: “It looks likely that last year, for the first time, the number of card payments overtook cash payments.”
This trend is being driven largely by the contactless payment revolution with consumers not only using contactless cards to make payments up to £30 per transaction, but also using wearable tech such as contactless key fobs and rings. These contactless devices mean that consumers can now spend in store without carrying a physical wallet, instead using e-wallets and payment apps paired to their contactless device.
Payment cards and cash can be left at home.
Checkout Free Shopping
What’s the next step for those markets that have embraced cashless payments like the UK?
In Seattle, Amazon have opened a store without any checkouts. Amazon Go uses cameras and sensors to detect what products customers take from the shelves, then they’re billed after leaving the store using payment data held on file.
Customers scan their Amazon Go app when they enter the store, then put their phone away as there is no need to scan items or use any checkout function. A virtual shopping basket is created as customers remove items (and replace them) keeping track of each product. When they exit the store, passing through a turnstile gate, checkout is complete. The customer’s Amazon account is then charged for the items taken away.
While currently a member of staff checks IDs to verify if customers are permitted to buy licensed products, such as alcohol, biometric technology could potentially be used in the future to automate this process too.
Omni-Channel Customer Experience
Amazon Go is a significant step towards a truly omni-channel customer experience, where one Amazon account can be used for purchases in store, online, and in hybrid situations like click and collect. Payment processing is also omni-channel, no cash and no contactless payments means that all transactions are online: streamlining the payment process and reducing many of the overheads associated with cash and other POS transactions.
However, unlike a conventional online checkout process, consumers don’t have a choice over which payment method to choose; instead their default option is used. Future developments might include technology that first verifies whether a customer has sufficient funds to pay for a transaction. Like the technology used at ‘pay at the pump’ fuel stations that check payment cards to determine the monetary value of fuel that the customer can fill up with.
In the, not too distant, future if a customer account is paired to a bank account, pre-paid card or e-wallet without sufficient funds, alternative payment methods could be suggested via a smartphone app to allow customers to checkout.
Of course when a merchant knows that a specific customer is in their store, there are also opportunities to promote products to them during their shop. Notifications via a smartphone app suggesting products as they navigate around the store could mirror the online shopping experience, where customers receive personalised suggestions based on their purchase history and other data.
While it may be some time before we see more checkout free stores, it could be sooner than you may think. It wasn’t that long ago that payments experts were predicted a cashless society, much to the derision of commenters and the media. That eventuality, particularly in markets like the UK, is now looking increasingly likely. Only this month the UK Treasury announced a consultation on the low denomination coins that are currently in circulation. It’s seeking views on whether consumers want 1p and 2p coins, with reports that some people simply throw these low value coins away.
Many other countries – Australia, Brazil and Sweden amongst others – have already removed low denomination coins from circulation.
In light of this and other developments – cashless, contactless and checkout-less payments are all trends we should be watching closely.
Our experts are on hand to discuss your customers’ payment experience. If you would like to find out more about delivering an omni-channel experience and how payment gateways and acquiring services fit in, contact our team on 0333 240 6000 or email [email protected]