Where Retail Technology Is Headed

The payments industry is instrumental in reshaping the commerce landscape through innovation. The ETA Retail Technology Committee predicts two trends that we will see throughout 2022: a rise in frictionless payments and expanded payments options.

Why it matters: Studies show that over 90% of small businesses attribute their pandemic survival to e-commerce and 73% of small businesses said accepting new forms of digital payments allowed them to grow.

TREND ONE: FRICTIONLESS CHECK-OUT AT OFFLINE STORES
Soft POS
Lacey Frenzl, Director of Product and Partner Development, First American by Deluxe
Soft POS has the potential to eliminate a retailer’s reliance and expense on hardware related to accepting payments. Accepting payments using the NFC in a smartphone or tablet also untethers an employee, allowing a merchant to take in more payments in less time.

Prediction: There is significant potential. Technology is moving quickly – but adoption is another story; some retailers are worried about hardware theft risks. I see mass adoption in mom&pop shops because you don’t need EMV or magstripe readers.

Expanded Contactless Solutions
Marta Rzeszowska, Vice President of Products, Moneris
Contactless support is almost ubiquitous. This is driving the shift towards removing the physical hardware terminal and the need for cards out of the ecosystem.

Merchant adoption is now expanding into tap and go solutions for industries such as charity. For example, in partnership with Tip Tap, Moneris offers an easy-to-use solution where the device is pre-configured with a set amount, allowing the consumer just to tap their card to give with no additional enablement or user involvement.

Prediction: Canadian merchants are already familiar with contactless as a general concept. It is a quick acceptance option enabled and supported by all major payment network players. But as new solutions are introduced, such as tap on phone, it will be a bit more complex to enable on both the merchant and the consumer side.

QR Codes
Shalav Gupta, Vice President, Head of NextGen Payments Platform, FSS
Restaurants’ use of QR codes on tables for customers to scan to access the menu, order, and even check out has grown. Bitly, a link management service, said that it’s seen a 750% increase in QR code downloads over the last 18 months.

Prediction: While this trend caught on primarily due to Covid, experts believe this trend is here to stay. Customers are increasingly looking forward to touchless service, and restaurants can change menus easily on the fly, gather information and data, and quickly introduce loyalty programs to their customers.

Just Walk Out (JWO)
Jay Myers, Director, Payment Vendor Relations, American Express
This technology solution enables consumers to enter a store and tap their card or mobile device to a reader, allowing them to just walk out with their goods as cameras and sensors capture their selections from shelves and bill the card on file for purchases after they leave.

Prediction: This technology can reduce the need for cashiers and save owners on resource costs. It will enable greater customer satisfaction via a frictionless experience once the technology is more broadly available.

TREND TWO: EXPANDED PAYMENTS OPTIONS
Buy Now/Pay Later (BNPL)
Shalav Gupta, Vice President, Head of NextGen Payments Platform, FSS
Many businesses increase their conversions by offering buy now/pay later (BNPL). With the decline in young Americans holding credit card debt, many are starting to embrace BNPL options, which provide the freedom to pay over time without being charged additional money.

Prediction: Research indicates that more than one-third of U.S. e-commerce brands plan to offer purchase financing options in the next 12–24 months due to its many benefits. According to Afterpay, their retailers report a 50% increase in average order value and 2-3x more units per transaction.

Conversion to eGift Cards
Aimee DuCasse, Marketing Director at MAPP Advisors & Factor4
Numerous merchants have seen an explosion of eCommerce brought on by Covid; and incorporated eGift cards to generate revenue even during covid closures and attract new customers.

Prediction: There will be continued adoption of eGift cards as more merchants expand their eCommerce presence and provide cashless transactions. Additionally, there will be a need for integrated omnichannel solutions that provides online, mobile and in-store functionality of the cards.

Real-Time Rails
Chris Ziegler, Chief Product Officer, Merchant’s PACT
Currently, receiving funds takes two business days. Depending on their risk profile, some merchants have the option of next-day funding and may have the opportunity to participate in faster funding through the push-to-card products with VISA and MasterCard. However, they are charged a fee to access the funds with this option.

Prediction: Processors will integrate back-end settlement options to real-time payments (RTP) and FedNow. Processors can offer an “instant payment” for settlement funds. Processors will need to price this in a way that replaces the interchange on the card transaction.

P2P Services Transitioning to Business Acceptance
Trevor Forbes, Director of Market Intelligence at The Strawhecker Group
Prediction: Small businesses, particularly in field services, want an easy (often a #1 priority) and cheap (a high priority) way to accept payments. Since many already use P2P services like Venmo and Square’s Cash App to pay family and friends, they use it for their business since more customers are requesting the method.

Crypto as a Payment Method at POS
Jim Poulson, Chief Innovation Officer, AnywhereCommerce
Prediction: There is potential for Crypto to evolve into a “standard” option for payments that consumers may demand, leading to the need to enable merchants to accept crypto alongside their card processing.