More than two thirds of retailers across Europe and the Middle East are investing or planning to invest into new payments technology within the next 18 to 24 months, with retailers citing real-time clearing and settlement capabilities, smart card based loyalty programmes and mobile QR code capabilities as biggest gaps in their payment services, according to a global survey of retailers conducted by payments provider ACI Worldwide and market research firm Ovum.
The research surveyed more than 700 global retailer executives across a number of subsectors including general retail, food and supermarkets as well as travel businesses and restaurants and provides insight into retailers’ payment strategies and investment priorities.
The report also reveals that needless security fears are holding back more than half of those surveyed from investing into more secure payments technologies and platforms. Fifty one per cent of retailers in EMEA cite security considerations as a reason that prevents them from investing into new payment technologies. This suggests that many retailers appear to be maintaining the status quo and relying on older, often less secure platforms, as these are systems they feel more comfortable with and assume are more secure.
Andrew Quartermaine, vice president merchant retail EMEA, ACI Worldwide, said: “Some of the results are surprising especially retailers’ perceptions around security. Fraudsters are much more likely to target weaker and older systems and maintaining the status quo is simply not an option. Furthermore, new regulatory standards are forcing retailers to invest into new security solutions which offer better protection than ever before. For retailers it hence remains critical that not only do they focus on security throughout their payments infrastructure, but also that they adapt to the latest risks and the latest fraud prevention technologies.”
Other Key findings of the report include:
- 93% of retailers believe consumers want a broader choice of payment tools. The demand for more payment tools, such as PayPal, mobile contactless, direct bank payments and so on, is driving the need for more payment investment. This includes spending on key payments infrastructure and services, and partnering with new providers through to development of new services and training of in-store staff. A ‘do –nothing’ approach in favor of the current status quo will remain increasingly untenable as these new tools become more ubiquitous and consumers become more demanding.
- 78% percent of retailers see payments as a clear part of their business strategy. A seamless, easy to use, and effective payment system is a growing focus for retailers and will continue to increase in importance. Retailers are also focussing on developing new customer engagement points in online and mobile channels, while providing a consistent consumer friendly experience. From speeding up transactions at the POS, through to deepening customer loyalty and creating new engagement mechanisms, new payment technologies potentially provide not only benefits to consumers in terms of convenience and cost, but also to retailers in terms of engagement and operational efficiencies
- Payment costs remain stubbornly high for retailers. With retailers renewing their focus on payments as a means to enable their strategic goals, both the costs and level of investment in payments are increasing. Retailers globally reported a strong increase in their payment costs over the previous 18 months, with nearly half (49%) saying their costs had increased, of which 39% say it had increased by 1-5%, and 10% that their costs had increased by a staggering 6% or more
Quartermaine said: “Retailers face a growing amount of pressure on their payment capabilities and maintaining the same course of action is not an option. Retailers are fully aware that customers want broader choices of payments tools and payments are in turn becoming a more critical component of their broader business strategies. At the same time, retailers face growing costs in maintaining and accepting payments.
“The combination of all of these factors suggests that for retailers, maintaining the status quo is not an option. With the rapid pace of development in the payments sector, now is the moment that retailers should focus on enhancing their payments infrastructure, and future proof their payments capabilities for longer term brand survival.”