By Brian Coburn, CEO, BRIDGE
In the face of multiple ‘once-in a generation’ challenges, retailers across the breadth of the industry are working tirelessly to equip their businesses to survive and thrive through change. Many of us are feeling at the mercy of elements – from Brexit to the pandemic – that are entirely outside of our control.
However, with change comes opportunity, and there are ways in which retail organisations can fortify against uncertainty whilst also increasing their agility to innovate. Perhaps the most overlooked of these is payments; often considered a key part of the retail journey that merchants are powerless to influence or control yet one that can make or break a sale.
With the full implications of Brexit still largely unknown and the pandemic creating seismic shifts in consumer spending habits, it’s time to explore new ways of shaping and evolving our payments offering to attract and retain customers.
In times of uncertainty, control is key
When the world around us is rapidly changing, within our own businesses we need agility and we need control.
Payment systems are rarely viewed as a source of either agility or control. In fact, it has traditionally been regarded an area ‘out of bounds’ for innovation and securely within the stronghold of payment service providers (PSPs). Tightly-bound point-to-point connections to individual payment service providers offer little room for innovation or intelligent routing of transactions, and the benefits of adding payment choice for our customers are easily outweighed by the perceived complexity of managing additional providers,
However, new payments orchestration technology brings a more welcome kind of change – one that returns control to the retailer and opens the payment function up as powerful point of competitive differentiation.
Controlling customer experience
Payment orchestration essentially puts an integration layer between the merchant and the PSPs, making it far easier for retailers to manage and control the brand experience throughout the customer journey. Retailers no longer have to hand the customer over to a payment provider at the critical point of purchase; we can control the buying experience from start to finish, reducing cart abandonment and minimising transaction failure.
Now, retailers can innovate easily with new payment structures, or use offers and deals to drive sales. For example, buy-now-pay-later or loyalty incentives can, with payment orchestration, be added permanently or during peak trading periods, and tweaked according to the target audience. There is also the marketing benefit of access to in-depth payments data to see what is working and why, creating the agility to morph the payments offering as conditions around us evolve.
During the course of the pandemic, niche and fledgling payment services have thrived and customers respond favourably to retailers that accommodate different ways to pay. In fact, over a third of customers will abandon a purchase if they can’t use their preferred method of payment.
Regaining a smarter payment advantage
Payment orchestration also releases the shackles of external payment providers’ terms and fees, enabling retailers to enjoy greater flexibility in deciding which payment options are offered and how transactions are managed. Smartly routing transactions according to factors such as payment currency, provider and amount involved means we can take advantage of the best rates and most favourable conditions in each case.
This also increases the attractiveness of payment disruptors: new payment options and applications – such as Alipay and Klarna – that are doing things a little differently and breaking up the oligopoly of the traditional players. With the flexibility to introduce new providers as circumstances change, we can explore new options to better control the cost of sales and create an environment that works for our business and customers.
Normally, a consequence of engaging more payment providers would be an increase in complexity, given that these payment mechanisms all operate in silos. Instead, payment orchestration creates a single platform for payments processing with centralised management and access to all of the data gathered across many payment systems, all in one place.
Payment control in your hands
Adapting to change without losing momentum is never easy, particularly during these turbulent times. But, equally, there has rarely been a time for greater opportunity for those equipped to grasp it.
Regaining ownership of your payment process needs to be a critical component of your overall resilience strategy for the year ahead, ensuring that market changes provoked by Brexit, Covid-19 – or the great unknowns that 2021 may have in store – don’t inhibit your customer experience or restrict your commercial opportunity.
Whatever lies ahead for UK retail, this is one area where the ‘take back control’ message will certainly ring true.