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It will come as no surprise that as money gets tight, consumers are shopping around more frequently.
Merchants missing out
In the main they are looking for two things: consistency in terms of the payment schemes and experience offered (including loyalty programmes) and a more sophisticated approach to chargebacks and refunds.
These points are underlined by two new pieces of research from payments integrator Adyen and digital payments integrator Fime.
Adyen polled UK consumers and businesses to understand how they are adapting to rising inflation.
The results suggest that offering a similar payment experience online and offline helps businesses facing a challenging retail environment.
Adyen found 62% of UK consumers spend more time searching for the best deals and prices because of the current financial climate, while a quarter spend more time evaluating products before purchasing.
In face of rising living costs, personalisation and loyalty have become increasingly important to consumers.
Almost one-third of consumers said they preferred using technology in-store because it delivered a better shopping experience, for instance, while 53% want to see more personalised discounting from retailers.
However, retailers are finding it hard to deliver on this, with barely 1 in 10 UK businesses having invested in making sure their online and offline shopping experiences are similar.
Fime paint a similar picture, with Fime’s VP of Consulting Arnaud Crouzet noting that merchants require payment solutions that offer a seamless checkout experience.
Crouzet says, “this includes easy-to-use interfaces, a variety of payment methods, and secure payment processing. The integration of payment solutions with other business processes and software is essential, as this helps to automate the payment process, minimize processing costs, and simplify payment reconciliation.
Merchants that offer such payment solutions stand a better chance of winning and retaining customers.”
Fime go on to argue that domestic schemes such as Belgium’s Bancontact or the UK’s Switch must respond by offering payment solutions that offer a seamless checkout experience while mitigating the risks of fraud and chargebacks.
Examples of where Fime argue domestic schemes could be doing better include setting up dedicated programs to help low-risk merchants improve their transaction rates, and specific services for the automatically renewing cards on file, improving cut-off times for Merchant Initiated Transfer (MIT) splitting, and providing a delegated authentication programme that meets the needs and objectives of both merchants and banks.
Payments Cards & Mobile Opinion
These new think-pieces show just how fast consumer payment methods are changing – and the extent to which merchants are struggling to keep up.
The main changes in consumer payments – neither of which are dealt with in detail by these studies – are a shift away from credit products towards debit and BNPL, plus the longer-term move from physical retail to online shopping.
While these research papers ignore the fact that retailers will deliberately adopt differentiated physical and online strategies to encourage footfall in store or website use, it’s nonetheless worthy of note that options such as loyalty points – together with a wide range of ways to pay – ought to be mere common sense for retailers and require little additional effort to implement.
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