The future of payments is more than payments

Despite a few technical changes that have occurred in recent years, until now the traditional payments landscape hasn’t changed much since the first payment card was introduced a few decades ago. The Point-of-Sale (POS) has largely retained its primary focus of allowing retailers to accept and collect payments from consumers. This is rapidly changing as several organisations are challenging the role of the POS and are looking to evolve the in store customer experience. They are doing this by bundling an increasingly sophisticated range of services such as loyalty and analytics as part of their core service offering. Traditional institutions must up their game or risk being left behind by merchants looking for more from their payments providers. 

With interchange fees making the acquiring landscape increasingly competitive, payments providers with fewer charges look set to become more popular than ever among merchants. For example, Square’s Register is a fully functional POS application that is available free-of-charge to retailers, with the merchants only having to pay the standard transaction-based fees. Others, such as Mobile payments player LevelUp are rolling in loyalty campaigns for retailers with no upfront costs. LevelUp’s fees are based on a simple success-based model for any credits that are redeemed by the consumer.

Analytics is another tool on offer from newcomers to the payments industry. One of the unique features of  PayPal Here’s recent launch is the ability to identify repeat customers via a mobile app prior to the moment of purchase. This gives the retailer the opportunity to offer a more personalised experience with the possibility of influencing the consumer’s purchase before they reach the POS.

Established players are also shaking the foundations of the payments landscape. Australia’s  COMMBANK has been working on a revolutionary mobile POS platform that gives retailers access to a wide range of services from both COMMBANK and some third-party developers. When it launches in 2013, it will already come bundled with several apps to enhance the customer experience. As the platform is open to third-party developers it’s only a matter of time before more apps become available.

In light of current and upcoming developments in the industry, traditional players such as acquirers and processors need to innovate and look for value added services that enrich the in store experience for both the consumer and the retailer. The ability to accept and collect payments is no longer a novelty for most retailers: the focus must shift to the provision of additional services that are bundled into the payment solution.