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what it calls “seamless commerce,” through which customers can shop, pay and direct shipment through a uni ed experience, any form of back-end or bureaucratic speedbump could have a negative impact, says Reed Luhtanen, Walmart’s senior director of pay- ments strategy. “We would fail
[at that] if business relationships and considerations prevent us from getting there,” he says. “So much about this is not about the technol- ogy but about the various interests not being aligned.”
Other retail representatives also call for closer work between the payments side and merchants. “Include us in the conversation,” says Liz Garner, vice president
of the Merchant Advisory Group,
a retail association. “Talk to us from the ground up, so you know what our customer experience is.”
Big Data Gets Bigger
Merchants, generally, are reluctant to talk about how they are working, or might work, with payment pro- viders on new products—often- times because they don’t want to tip o competitors. But they are investing more in the data that can better analyze and predict how consumers browse products and make buying decisions.
About 60 percent of U.S. retailers expect to invest at least $10 million in big data this year, according to a
—Jack Forestell, Visa
survey from NewVantage Partners, a business management consulting rm. And retailers increasingly are demanding e-commerce platforms with deeper analytics capabilities— a big reason Magento, one of the largest vendors of e-commerce platforms in the U.S., said it bought online analytics rm RJMetrics late last year.
Part of that comes from what the e-commerce industry often views as the Amazon e ect. Retailers hoping to survive in a world dom- inated by North America’s largest e-retailer need to emulate its consumer-data prowess. What that means is that retailers likely will be able to bring more data—and more value—to the conversation with their payments partners.
More Retail Power
Meanwhile, ghts and negotiations over interchange continue. Walmart in January struck a deal with Visa in Canada over an interchange dispute that had the chain banning Visa payments in about a dozen stores in that country and threat- ening more. In the U.S., Walmart and Visa also have led dueling lawsuits over customers’ use of signatures or PINs to verify pur- chases with EMV-equipped debit cards at Walmart. Kroger also has led a similar suit.
Such developments suggest that “retailers are gaining an increasing
volume 10 • spring 2017
Merchants deserve a bigger seat
at the payments table and we are working to ensure that is the case.
level of power” in payments, says Michael Moeser, Javelin Strategy & Research’s director of payments. “They are exing their muscles.”
At the same time, U.S. retailers’ lingering bad feelings over the EMV liability shift—as of late 2016, about a third of U.S. merchant locations had adopted EMV, according to Mastercard—could lead to more overtures from payment providers, though you’d be hard-pressed to nd anyone
to admit that publicly.
Collaboration is important though. Most chains do not have Walmart’s heft nor Amazon’s extraordinary strength in consumer data collec- tion. Many smaller retailers are more likely to engage in or deepen partnerships with payments provid- ers, Moeser says. “There are so many moving parts, so doing it
on your own tends to be rather di cult,” he says. For virtually all retailers, considerations about payments tend to come after mar- keting and other concerns. Retail- ers still tend to think of payments as akin to basic utilities—certainly vital, but in the background com- pared with, say furniture and food and TV placement.
No matter how merchants view payments, the invitation for more collaboration seems genuine. And, working together would mean using all that consumer data retailers are mining to shape future innovation in commerce experiences that will be bene cial for both sides.
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