Future of Retail 2019 - December

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F U T U R E O F R E T A I L 18 Are voice payments all hype? Big tech believes voice will revolutionise the way we pay for goods and services. So are Amazon and its rivals right or are voice-activated payments just another Silicon Valley fad? Duncan Jefferies P A Y M E N T S Commercial feature ith an influx of new technol- ogy, the retail landscape's complexity lies solely on the side of the merchant and has developed to ensure the customer has the simplest and most secure shopping experience possible. A frictionless payments pro- cess underpins all this, according to Sage Pay's director of marketing and product Martin Pitcock and director of ecommerce product Tali Scott. From shopping through Amazon's Alexa, to the increasing opportunities for personalisation offered by artificial intelligence, there is an ever-growing range of platforms merchants must get to grips with. "5G will give people access to bigger, faster data streams," explains Mr Pitcock. "This will in turn mean the use of augmented and virtual reality will become more prevalent in the cus- tomer experience, and all the while smartphones will get smarter." Great news for consumers, but such an omnichannel approach to shopping is not without its challenges. "Omnichannel is a buzzword everyone uses, but people are beginning to get a bit jaded about it," says Ms Scott. So what does it really mean? The idea is simple: present customers with the same offer and service across all platforms, and this includes payment methods. Payments' role in creating a more personalised customer journey can be seen perhaps most clearly in cir- cumstances such as customers buying items online and wanting to return them in-store. In the case of process- ing refunds, payments providers must be sure the transaction has been cap- tured securely and all the card infor- mation hidden, so when a customer Payments are at the heart of successful retail evolution We are in the throes of a retail evolution. The way people shop has never been more complex, or more demanding, and integrated payments sit right at the heart of success returns an item in-store they do not have to provide card details again. Indeed, without the right payments systems in place, unified commerce can leave both merchants and consumers vulnerable to fraud. For the merchant, there are few protections against some- one coming in to claim a refund and using a different card from the one on which the payment was made. Likewise for shoppers, giving out card information verbally means having no control over who gains access to your details. "Say you ring up to claim a refund while somewhere public, like on a train," explains Ms Scott. "Giving out your full card details, including security code, means someone can take note of that on your end or at the merchant's end." Helping minimise the likelihood of fraud for the customer goes hand in hand with understanding what they want at every stage of the buying jour- ney. "Retailers need to know not only what shopper preferences are today, but also what they will be tomorrow," says Mr Pitcock. An integrated pay- ments system can ensure great cus- tomer experience is delivered at every step of the buyer cycle. This could mean ensuring the website is easy to navigate, with elements such as the discount field being easy to find on every device. Or it could mean having a wide range of delivery options, includ- ing click and collect or a locker service. "You need to consider how the cus- tomer wants a transaction to be ful- filled," says Mr Pitcock. "Royal Mail might charge £5.99 for delivery, which many customers find very expensive. You need to have a range of options and services throughout the buying cycle." New software has made this inte- grated approach just as possible for small and medium-sized enterprises as for large corporations, from on and offline inventory tracking to rota sys- tems and enterprise resource planning. What is crucial, however, is to remem- ber that payments lies at the heart of each of these steps. Stock manage- ment, the ecosystem of the website, the payment systems, all these ele- ments must be considered together, holistically. Looking at the comprehen- sive whole of the retail cycle is the only way a seamless omnichannel experi- ence can be delivered. In the future of retail, payment systems will play a fundamental role in consist- ently delivering excellent shopping expe- riences across any purchasing channel, while also helping merchants to maintain the quality of that experience from pur- chase to fulfilment and beyond. As Ms Scott concludes: "Payment systems are supporting this retail evo- lution by ensuring payments can be made simply and securely, wherever they happen to be." For more information please visit www.sagepay.co.uk W Payment systems are supporting this retail evolution by ensuring payments can be made simply and securely, wherever they happen to be M For arket analyst firm Canalys predicts the global total for smart speakers in use will grow from 114 million in 2018 to 207.9 million by the end of 2019. That's a huge pool of devices for voice-acti- vated payments and it should only increase as virtual assistants become part of everyday life. In fact, consulting firm OC&C estimates that $40 billion in the United States and $5 billion in the UK will be spent through voice commerce by 2022, representing 6 per cent and 3 per cent respectively of all online spending. "Voice-activated payments should be viewed as a vision of the future of ecommerce, not a fad," says Daniel Kornitzer, chief business develop- ment officer at Paysafe Group, which released a report in July on con- sumer attitudes towards voice-acti- vated payments. "There are a number of reasons for this on top of the proliferation of smart home technology. Firstly, our research found that 18 to 24 year olds are the group most likely to embrace this new way to pay, with over half (57 per cent) already saying they would use the technology to pay for low-valued goods and services. "Secondly, the oncoming advent of 5G dramatically increases the scope for IoT [internet of things] technology, such as smart fridges and internet-connected vehicles, that could be used to make voice- activated payments. "Thirdly, one impact of the incoming strong customer authentication legis- lation is that biometrics generally will become much more ubiquitous and potentially replace passwords as the central component of consumer card- not-present payment authentication. This may ease the concerns of those who don't believe their financial data remains safe when it isn't protected by a password." Naji El-Arifi, head of innova- tion at ecommerce consultancy Wunderman Thompson Commerce, agrees that voice commerce is unlikely to be a fad, primarily as it's easier and faster for consumers. "For smaller, lower-cost items and repeat purchases, voice is going to really shine," he says. "Particularly as these products do not require customers to see the product before purchasing." However, Mr El-Arifi adds that voice will likely be another way we choose to pay, not the be-all and end-all. "When it comes to explora- tion and the purchase of expensive goods, it is unlikely that voice will be the go-to choice," he explains. "This does not mean voice won't have a role to play though. People get attached to the transactional part of the shop- ping journey, however voice can ena- ble shoppers to begin a search." In future, intelligent voice assis- tants may even make purchases or schedule payments on our behalf, says Daniel Cohen, direc- tor of the Fraud & Risk Intelligence Suite at RSA Security. "It's that 'on your behalf' element that is really going to challenge the payments industry," he says. "How do you authenticate those payments and prevent fraud?" For smaller, lower-cost items and repeat purchases, voice is going to really shine

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