Future of customer-centric commerce

Cus­tomers expect to be able to pay for goods and ser­vices in an ever-increas­ing vari­ety of ways, while reg­u­la­tion increas­es as open bank­ing becomes more preva­lent.

It becomes a mine­field of tech­nol­o­gy and data reg­u­la­tion; com­pli­ance with exten­sive leg­is­la­tion that takes the focus of the mer­chant away from what they are good at: sell­ing or pro­vid­ing a ser­vice to their cus­tomers.

But for the mer­chants able to find their way suc­cess­ful­ly through this labyrinthine series of deci­sions, there is a con­sid­er­able prize to be had in increased cus­tomer loy­al­ty and high­er prof­its.

When it comes down to it, mon­ey has the val­ue that we as a soci­ety ascribe to it, that the cen­tral banks across the world print on it and tell us it is worth, and the val­ue changes over time rel­a­tive to oth­er cur­ren­cies and as a result of out­side influ­ences, such as infla­tion.

So when you think about the future of mon­ey, it is just as pos­si­ble to assign val­ue to some oth­er sort of “cur­ren­cy”, which could include the val­ue of your per­son­al data and the way in which this is used by retail­ers, leisure ser­vices and online sell­ers.

The impor­tance of data can­not be under­es­ti­mat­ed. Mer­chants who are look­ing to main­tain and grow their busi­ness­es must be aware of the increas­ing need to col­lect and use data in a way that encour­ages cus­tomer loy­al­ty, ongo­ing inter­ac­tions and sales, while ensur­ing the high­est lev­els of secu­ri­ty.

How­ev­er, addi­tion­al reg­u­la­tion and the ris­ing require­ments to ensure the high­est lev­els of data secu­ri­ty mean many mer­chants are strug­gling to align their inter­ests, their cus­tomers’ inter­ests and the abil­i­ty to pro­vide suf­fi­cient­ly strong encryp­tion mech­a­nisms that can address all these needs. Going it alone for a small­er retail­er, or even a larg­er retail­er in some cas­es, can be so oner­ous that the oppor­tu­ni­ties pre­sent­ed by the prop­er use of data col­lec­tion are passed by.

Mer­chants who are look­ing to main­tain and grow their busi­ness­es must be aware of the increas­ing need to col­lect and use data in a way that encour­ages cus­tomer loy­al­ty

Intro­duc­tion and imple­men­ta­tion of the Gen­er­al Data Pro­tec­tion Reg­u­la­tion (GDPR), essen­tial­ly the right to be for­got­ten, and the heinous penal­ties that can be applied in the case of GDPR data breach­es have made it even more dif­fi­cult for mer­chants, espe­cial­ly small­er firms, to get to grips with just how they can help their cus­tomers to have a bet­ter expe­ri­ence when­ev­er they inter­act with them.

Yet cus­tomers are increas­ing­ly impa­tient when it comes to pay­ing for goods and ser­vices. Many are no longer hap­py to wait while they have their card read, enter their PIN into a ter­mi­nal, and have the sys­tem pro­duce a paper receipt they then car­ry in their wal­let for months and nev­er look at again.

Instead, pay­ing “on the fly” is increas­ing in pop­u­lar­i­ty; using a phone to pay with sys­tems such as Apple Pay or con­tact­less card pay­ments are the tip of the ice­berg when it comes to devel­op­ing increas­ing­ly speedy solu­tions to encour­age cus­tomers to come back and buy again.

The Capgem­i­ni Top 10 Trends in Pay­ments 2019 report high­lights the increas­ing use of dig­i­tal iden­ti­ty as the key dri­ver for the rise in the need for secu­ri­ty, as an increase in fraud is expect­ed. The sur­vey high­light­ed that between 2014 and 2018 new account fraud was expect­ed to rise by 44 per cent, with loss­es ris­ing from $4 bil­lion to $8 bil­lion over the peri­od.

The report says: “Increas­ing iden­ti­ty theft and sce­nar­ios such as syn­thet­ic ID fraud are spurring new defen­sive moves against attacks.

“Reg­u­la­tions such as PSD2 [Revised Pay­ment Ser­vice Direc­tive] com­bined with the open bank­ing trend require robust mea­sures for iden­ti­ty man­age­ment. The Euro­pean Bank­ing Author­i­ty is encour­ag­ing risk-based authen­ti­ca­tion, where­in sev­er­al lay­ers of secu­ri­ty must be passed to min­imise vio­la­tion risk.”

In real­i­ty, for mer­chants this cre­ates a headache of migraine pro­por­tions as they strug­gle to keep up to date with the ongo­ing and con­stant­ly chang­ing require­ments for secu­ri­ty, while pro­vid­ing pay­ment options for clients from the use of con­tact­less cards to phones, cryp­tocur­ren­cies, e‑wallets and even their voice.

How­ev­er, data secu­ri­ty is just one part of the equa­tion. Retail­ers for their part are also using the data gath­ered in these trans­ac­tions to tai­lor the expe­ri­ence their cus­tomers enjoy, whether that is by iden­ti­fy­ing trends in sales, which allow buy­ers to get their stock lev­els right to max­imise prof­its, or by iden­ti­fy­ing spe­cif­ic cus­tomer pur­chas­ing behav­iour at par­tic­u­lar times.

The use of per­son­al data to tar­get cus­tomers with offers and loy­al­ty schemes they will actu­al­ly engage with is also a pow­er­ful tool for retail­ers to wield in the con­stant fight to win busi­ness. You can use data analy­sis to iden­ti­fy whether some­one is a good cus­tomer of yours or a bad cus­tomer, how much on aver­age they spend with you each inter­ac­tion, or each month or each year.

This becomes enor­mous­ly pow­er­ful when you then start to use it to gen­er­ate mar­ket­ing that specif­i­cal­ly tar­gets sets of cus­tomers, whether they only buy in the win­ter or respond specif­i­cal­ly to offers pro­vid­ing dis­counts over a cer­tain lev­el.

Con­sumers are becom­ing much more accus­tomed to hav­ing their needs and desires catered to at a more gran­u­lar lev­el. Adver­tis­ing tar­get­ed at their inter­ests is some­thing that Face­book, Google and Ama­zon do extreme­ly well, and as a result it is becom­ing more inte­grat­ed into our gen­er­al pur­chas­ing behav­iour.

While very few busi­ness­es may have the finan­cial clout, tech­ni­cal knowl­edge or abil­i­ty to col­lect, analyse and then retar­get data in the same way as these retail behe­moths, it is not an impos­si­ble task to inte­grate such ser­vices into your busi­ness if you choose the right pay­ments part­ner.

Resolv­ing all these ele­ments of the cus­tomer-retail­er inter­ac­tion is not easy. The best way is to use a strong, con­stant­ly updat­ed, high­ly secure plat­form that can be inte­grat­ed across a range of retail assets your com­pa­ny might have, every­thing from a point-of-sale sys­tem to an online por­tal.

Choos­ing a part­ner that pro­vides a solu­tion that can work across all sec­tors, with spe­cial­ist data col­lec­tion and analy­sis capa­bil­i­ties, and the high­est lev­el of encryp­tion avail­able sounds like the Holy Grail. But it real­ly does exist.

For more infor­ma­tion please vis­it uk.freedompay.com