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BOIPA 2022 Payment Predictions

It has been almost 2 years since concerns over cash’s potential to spread virus and disease emanated to the forefront of consumer and business owners’ minds, as rumours of a highly-contagious and deadly novel coronavirus began to feature more prominently in the UK/ Irish media.

Flash-forward to today’s reality and the majority of consumers and merchants have found their feet with card, contactless and digital payments after an accelerated step-change away from notes and coins in 2020.

Last year’s payment trends reflected the growing acknowledgement of cashless transactions’ benefits for customers and the quantum leap towards card and digital transactions will not be reversed.

The popularity of cash had already been on the wane pre-pandemic but the expected new era of universal payment acceptance unattached to physical money arrived more hurriedly as a reaction to unprecedented events rather than assimilating into societal consciousness over this decade as previously anticipated.

Cards surpassed cash as preferred payment method only recently and, now, they too are challenged by digital wallets and apps. This change is predicted to continue in 2022 given the frictionless ease, speed of purchasing and security of paying with wearable devices and digital cards.

We look at what other changes and developments will affect businesses in the card payment space this year.

Bricks and clicks: The merging of the online and offline shopping experience

Over the past 24 months sole traders and companies have either developed or evolved their digital presence to match customer expectations and shopping habits. Increased adoption of payment gateways, virtual terminals, use of social commerce on social media platforms and pay by link payment options has accommodated heightened accessibility to brands, products and services.

A CSO study on digital consumer behaviour found that around four out of five consumers bought goods or services online last year with people in the 16-44 age category most likely to do so.

Recent data has reflected that customers will want over half of pandemic-era services to become the new normal this year. This and, the rise of more digital-first shoppers, leaves a large question mark over the role of physical stores and the high street retail in 2022.

Geoff Barraclough, Head of Proposition at EVO Payments, predicts how shops may need to change their in-store approach to address the continued growth in online shopping. Retailers must now reassess the customer journey as it now incorporates both in-person and digital decision touchpoints, with physical shops laying foundations for customers to complete potential transactions online or digital engagement leading to an in-store purchase.

Barraclough predicts that, “we could see retail stores refocusing on customer experience and showcasing their products with clear signposting on how to continue customer engagement with their brand online.”

Connecting both commerce environment to support customer needs will be key with stores playing a more pivotal role as marketing and inventory fulfilment channels and savvy business owners are ready to adapt.

Live shopping and how digital bricks build in-store shopping experiences

Live shopping and virtual consultation – utilising online livestream broadcast to allow viewers to watch, engage and shop at the same time – is the next eCommerce step for retailers in merging their physical environment to a digital audience, particularly for the Generation Z demographic and Millennials. The Kilkenny Shop have been an early adopter of this in Ireland, opening up opportunities to visit the shop digitally to a worldwide audience.

Conversely, we will see more shops incorporate digital components with “digital bricks” scaffolding the in-store shopping experience. Research in neighbouring UK has indicated that 89% of customers are interested in using more technology in-store. Interactive screens and digital shop windows will play a bigger part in catching consumer attention on the high street to add to the theatre of the shopping experience.Online shopping predictions

Strategic retail and shopper consultant, Sharon Yourrell Lawlor references how brands like Nike have embraced “phygital” environments with their European flagship store “delivering an experience tailored to how post-pandemic consumers shop, with everything from interactive Kids’ Pod gaming to augmented reality (AR) to display its latest product concepts.”

The Irish high street will soon replicate these experiences to remain competitive.

Integrated payment functionality with ISV’s will continue to achieve niche solutions for customers  

The value of Independent Software Vendors (ISV’s) with integrated payment solutions is clear, offering quick, efficient and seamless user experience to both customers and merchants as the sales and business process are merged and payments are instantly reconciled.

ISV’s concentration on specific and niche markets has been borne out of opportunity as well as necessity with attempts to develop effective generic retail software having little impact given the complexities of product merchandising hierarchy, notes Barraclough.

The benefits of being sector specific – with highly customized software for everything from golf courses, to convenience stores to florists and hairdressers – has furthered business owners’ transition to technology-focused ISV software to support their business in-store and online.

Payment technology sharpening business focus

These enhancements in payment-integrated technology has also armed businesses with strong data and insights to build from in 2022.

“Merchants, who in the past would have to do tasks like stock control, accounting or loyalty programmes manually, now have access to systems which will help them track inventory, deliver customer insights and run loyalty programmes at the click of a button.”

Visa – Future of Payments

Payment provider partnerships with ISV’s, that can best support the digital ambitions of your business will play a leading role in supporting you inform business strategy and expectation with cutting-edge, backend technology.

“It’s hard to track and quantify how many people might come into your shop and maybe leave the queue or where they decide not to complete a purchase,” Barraclough points out. “You can see this online with more webpage metrics and the likes of cart abandonment and bounce rates.”

With this growing understanding of customer insights and data, driven by better payment solutions, it’s becoming easier to decide key decisions on potential consumer journey barriers, products, pricing and promotions for business with a clearer picture of which customers to engage with, when to engage and what to offer.

The demand from merchants is already there for more than point of sale technologies and in 2022 partners and payment service providers will continue to demonstrate added value to businesses with solutions covering multi-channel usage, security, and specific industry and regulatory requirements.

Industry response to cybercrime

Strong Customer AuthenticationIncreased familiarity with the digital payments landscape over an accelerated period of time has been exploited by an increase in cybercrime. The banking and financial services sector have continued to tackle and limit incidences of online fraud with the Banking Protocol, a UK-wide scheme launched by UK Finance, National Trading Standards and local police forces having continued success.

There is every reason that, although challenging, continued industry response and growing security awareness will continue to thwart hackers efforts to exploit consumer and business’ finances.

Barraclough reflects on the positive impact mandating Strong Customer Authentification (SCA) has and will have.

SCA ensures that electronic payments are performed with multi-factor authentication, to increase the security of electronic payments.

One business concern with SCA will be that, although expected to become less of an obstacle once users become more familiar with its purpose and process, the frictionless experience depends on the issuing bank’s ability to operate an unhindering authentication process.

This varies with some still issuing one-time pass codes and could lead to increased cart abandonment.

BOI Payment Acceptance

BOI Payment Acceptance (BOIPA) is a marketing alliance between the Bank of Ireland and EVO Payments International. It brings together Bank of Ireland’s understanding of what Irish businesses need and EVO’s expertise in creating innovative payment solutions.

BOIPA has created an innovative solution for the Irish market in terms of both our pricing and customer service model.