Study shows retailers lagging on payments strategy

Payments technology

Despite the retail industry’s ambition to move to an omni-channel strategy, relatively few retailers have completed an omni-channel payments programme claims ACI Worldwide.

The electronic payments specialist says that its study of nearly 100 retailers in Europe and North America, conducted by PCM Research, shows that they face multiple challenges when it comes to implementing omni-channel payments programmes – with incompatible systems, data integration and the inability to track customers the top challenges. Fraud prevention and payment security capabilities also remain an issue for many retailers.

Other main findings from the research, entitled ‘Omni-Channel Payments for Merchants: Myth or Reality?’, include:

• Only 21% of merchants surveyed have completed an omni-channel payments programme. This includes primarily large grocery and department store operators. Moreover, 46% have no plans for an omni-channel payments programme within the next 12 months.
• Asked about the organisation’s ability to innovate, 50% classed themselves as in the ‘early’ or ‘innovators’ stages. The other half categorised themselves as ‘technology followers.’ Asked why they are not moving faster into an omni-channel retailing environment, two reasons were prevalent: finding the business case and business sponsorship for the necessary funding to implement.
• Alternative payments, mobile and tokenisation lead the way in desired omni-channel payments and tools. Sixty-three percent of retailers surveyed said they are interested in Alternative Payments and 53% in mobile point-of-sale (POS), aka mPOS and wallet.
• Fraud prevention and security remain major issues for many retailers. Asked whether they have a common set of fraud prevention capabilities across all channels, 53% of respondents said no, 39% yes and 8% were unsure. Forty-two percent of respondents said they have no common set of payment security capabilities across all channels today, 9% were unsure and 49% of retailers indicated they had these capabilities.

“The path to omni-channel payments is complex and can seem daunting, and merchants are at a crossroads with the number of technology options,” said Andrew Quartermaine, head of merchant retail Europe, the Middle East and Africa (EMEA), ACI Worldwide.

“However, those that embrace these types of disruptive opportunities to serve today’s anytime, anywhere consumers will come out ahead. A frictionless payment experience for the consumer in any channel should be the goal of retailers and merchants.”

The survey also shows that the preferred implementation strategy for omni-channel payments has moved from an in-house (on-premise) model to a hosted software-as-a-service (SaaS) model. Increased payments complexity and payment card industry (PCI) compliance are likely to be the biggest drivers for this move in delivery/consumption model.

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