Ovum’s “2016 Global Payments Insight Survey: Merchants and Retailers: Changing the Merchant Experience,” released in conjunction with ACI Worldwide, shows that the payments landscape is drawn as one defined by a tight ecosystem, with merchants and retailers bound to billing firms differently than how they interact with customers and retail banks.
And, said Ovum, each party in the relationship has different priorities and challenges that must be met on a daily basis.
FinTech’s allure, which grabs much media attention, admittedly focused on consumers, still will have much impact on the payments industry across the regulatory, infrastructure and technology continuum. The second annual survey conducted by Ovum and ACI sought a gestalt view of the payments landscape across a survey of more than 1,675 retail, banking and infrastructure executives in 18 countries and 14 subsectors.
Merchants see payments as an opportunity, with one of the key characteristics coming as an “always on” availability to consumers. But merchants also need to be constantly refining how they approach and engage those customers. The customer in turn has developed dexterity with using mobile and online channels to shop, compare and buy goods and services.
Thus, retailers and merchants must constantly keep the customer in their sights while eyeing the bottom line and bringing technology investments (and costs) down. The study found that most merchants were sanguine about payments technologies, and look to work with “less traditional payment providers” that include startups.
As many as 81 percent of respondents see payments as a clear part of an ongoing strategy, one that will offer benefits, and 92 percent will continue or boost payments investments. Ovum and ACI also found that one in five merchants plans to “significantly” boost spending in investments tech, as measured by the latest survey, and notching a gain over the previous year’s commentary. Segments that show the highest levels of expected investment include the grocery/supermarket and fuel/convenience store industries. Key initiatives here include EMV and boosting in-store payments capabilities.
Overall, security remained top of mind for respondents, with 70 percent of merchants indicating concern over protecting customer payment credentials and said protecting data would be a key initiative going forward, driven in part by regulatory requirements. Competitive pressure to offer flexible POS and customer engagement is driving retailers to ramp up their investments.
When queried about returns on investment, merchants chose launching value-added services as top of list, with 73 percent, and closely followed by greater numbers of payment options at 72 percent, and boosting customer retention at 71 percent.
As for viewing payments themselves, the research showed a boost between the years of 2015 and 2016 in merchants that think new payments technology will offer up benefits to their organizations. Three quarters of respondents feel that way, led by players in the general merchandise arena.
Online payments providers are gaining traction with 76 percent of responding merchants willing to work with those relatively nascent firms in the future, even as banking still holds sway over payment services (at 87 percent of those surveyed).
The merchant data from the report is based on the responses of 1,000 merchants globally. The full report and infographic offered by ACI Worldwide can be found here.