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Will Merchants Find their Voice in Payments?
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Second, it’s easy to speculate
that the payments industry has
an incentive to play nice with U.S. merchants amid the still bumpy migration to EMV. Retailers still grumble about the hassle and cost of moving to the anti-fraud chip card standard, which has yet to reach all merchants, including thousands of gas stations.
The Experience Factor
“Merchants sit in a very interesting spot in the ecosystem today,” says Amy Parsons, vice president and head of global commerce, Discover Financial Services. In large part, that’s because retail and payments experts say that consumers, easily bored and harder to impress, desire more exciting and e cient shopping experiences. They want such fea- tures as product recommendations, easily accessed shopping carts and even virtual reality—think 3-D renditions of how new furniture might look in a room. To top it o ,
a quick path to checkout with payment and shipping details easily incorporated will reduce shopping cart abandonment.
And as much as payment networks might know about shopping be- havior, it’s a good bet that the best merchants know a lot more. Take Walmart Pay, for instance. The retailer designed the program to appeal to families with four or more members who are so busy that saving time is as valuable
as saving money. That’s the sort of insight that can, with proper analysis and collaboration, shape future payments products.
Mobile Sweet Spots
Already, payment providers cite examples of products that grew from merchant collaboration as hints of what might be ahead.
Take PayPal’s One Touch technol- ogy, which launched in 2015 and enables shoppers to remain logged into PayPal accounts on di erent machines. Since no PayPal login
is required, it reduces the number of steps for completing a purchase. That’s important because e ciency drives purchasing: 87 percent of One Touch purchases are com- pleted, PayPal says. Normally, 65 percent of mobile shoppers aban- don their shopping carts before buying. Five million merchants
now o er One Touch, and some
40 million shoppers have used
the feature as of Dec. 31, 2016, according to PayPal’s 2016 year- end earnings report.
Mobile payments—and not neces- sarily proximity payments—likely will serve as the main area of ongoing collaboration among merchants and payment providers, given that smartphones play a role in 67 percent of all U.S. online shopping, and 68 percent of
retailers will increase their spend- ing on smartphone initiatives
this year, according to Forrester Research. But smaller issues also concern retailers, and they hope to have more input there, as well.
Take the fast food chain Wendy’s. In the immediate past, a new terminal “might show up at the door, and the I.T. guy turned it on,” says Gavin Waugh, the chain’s
vice president and treasurer. Now, though, the payments industry would bene t from nding out what retailers think about customer experiences and expectations in advance. Waugh points to the example of near eld communica- tion (NFC), the contactless payment technology that’s long been considered “cool” by technology fans and payments experts, but would o er a “terrible customer experience” for drive-through fast food transactions, he contends.
Even Walmart, the largest U.S. retail chain, recognizes the bene t of open communication with the payments side when it comes to innovation. Given that the retailer’s goal in the coming years is to o er