The end of one decade, the beginning of another. Might the coming year be marked by innovation at the point of sale (POS)?
The PYMNTS 2019 end-of-year survey of 30 executives asked for payment-related predictions that could (theoretically) be placed in a time capsule to be unearthed 12 months hence. The time frame, of course, is somewhat short. Thinking about what will come to fruition by the end of December 2020 gives little runway to predict, say, the most mobile of mobile commerce options (flying cars with embedded payments!) — or, say, personalized robots that go out and do the shopping for customers, wielding digital wallets connected to their accounts, and bringing home goods in fair weather and foul.
However, looking out a year gives a glimpse of the trends in place, and the ripple effects that translate into seismic currents and sea change. Glancing through the digital pages of the PYMNTS eBook, a few themes emerge. Among them lies change at the point of sale, as predicted by several respondents.
Making Contact With Contactless
We’ve barely gotten through the holiday shopping season of 2019. Yet, a year from now, we’ll be knee-deep in wrapping paper, and just emerging from the post-holiday frenzy of 2020. According to Akash Garg, U.S. CTO at Afterpay, the next holiday season will see U.S. shoppers “finally [beginning] to embrace mobile payments and contactless cards to pay in-store.”
That shift will be driven, in part, by more card issuance from banks, said Garg. That sentiment was echoed, separately, by Chuck Fagan, president & CEO of PSCU, who noted that his survey revealed that as much as one-fourth of respondents have contactless cards, and use them at least several times a month. Merchants will be turning on their near-field communication technologies, and accepting tap-and-pay at the terminal.
“For the first time, merchant acceptance — a key driver that will determine how quickly contactless succeeds in the U.S. — is ahead of the issuing [financial institutions (FIs)], as merchants look to speed up their lines for a better customer experience,” said Fagan.
In another separate prediction, Linda Kirkpatrick, EVP of U.S. merchants and acceptance for Mastercard, said that 60 percent of Mastercard’s card-present volume originates at merchants that are now contactless-enabled, and the company expects to see these numbers increase.
With merchants ready and advertising contactless payment availability, it might not be far-fetched to assume that consumers will start to explore the available use cases surrounding such payments — in retail, mass transit and beyond. Fagan predicted that contactless card adoption will also spur mobile wallet use.
Moving toward the next generation of payment technologies, one is likely to capture the attention of that next generation — and be top of mind and top of wallet.
Here Come The Millennials
That next generation would be millennials and Gen Z, of course. A number of the surveyed executives said that tailored purchase options will gain traction at the terminal — such as buy now, pay later (BNPL). As noted by CO-OP Financial Services executives Ajay Guru, SVP and protect group leader; Nish Modi, SVP and integrate group leader; and Dr. Kathy Snider, SVP and engage group leader, the younger generations are spending money on travel and a host of other purchases, and are taking on debt in a still-healthy economy. They’re not averse to taking out loans at the point of sale.
Might the very notion of what a terminal is — or could be — see a radical shift within the next several months? Petru Metzger, head of payments delivery at Endava, told PYMNTS that there is work going on across the payments ecosystem to develop downloadable terminals, which will be accessible from phones and tablets. The end result will be to allow new players to enter the terminal business, to scale extremely quickly, to lower prices and to focus more on marketplaces — and the consumer will find new ways and means to use their contactless cards.
Bundling Up — And Putting Commerce In Context
Along with the emergence of new technology embraced at the point of sale, there will be opportunities for retailers to offer a range of fully digital experiences. As Cover Genius CEO Angus McDonald told PYMNTS, retailers will explore and adopt new business models, with subscriptions and bundled offerings that seek to cement customer relationships spanning a lifetime. As PYMNTS has found through its own research, for example, more than 90 percent of customers would spend more if warranties and insurance were offered at the point of sale.
Of course, machine learning can help put commerce in context, as merchants eye an experience that is as frictionless as possible. , Looking out a year, Paytronix CEO Andrew Robbins said that personalized experiences will emerge across all manner of platforms and interactions. That includes unattended retail — Matthew McConnell, COO of USA Technologies, said that new technologies like facial recognition, as well as larger consumer datasets, can expand the range of offerings at the POS (where age verification, for instance, can ensure that lottery tickets and other items are sold to legally appropriate consumers).
Much can happen in the space of a year. One can bet that readers will be back here in 12 months to discuss what happened at the POS — and what’s next.