By Dale S. Laszig
DSL Direct LLC
After years of trying to humanize payment technology, the tables have turned. We're now wondering why we can't be more like our tech. How did this happen? For years, identical devices rolled off assembly lines to be palletized and shipped to warehouse loading docks, where they were promptly unpacked and daisy-chained to receive identical software loads. Countertop terminals looked and acted the same; programming options were scarce but POS devices, in tan, charcoal gray and black, were ubiquitous.
In the old days, the first question every help desk representative asked was, "Is it plugged in?" Thirty years later, merchants are asking themselves the same question, namely, are they plugged in to digital commerce, and if not, what's holding them back from upgrading? The answer could be simple or complex, depending on where they sit in the commerce value chain.
For a big-box retailer, an upgrade might mean optimizing the omnichannel customer journey. For a small store, it might mean adding channels, payment methods or contactless capabilities.
A recent study by FreedomPay offers merchants of all types and sizes a prescriptive road map. Unleash the Power of Pay, published in October 2022, examined technology's role in retail with Accenture, Deloitte, McKinsey and other leading market research firms. Researchers agreed retailers need advanced technology to compete in today's complex, consumer-driven market.
Participating researchers in the FreedomPay study applied a PESTEL analysis to identify political, economic, social, technological, environmental and legal impacts on the retail landscape. They concluded retailers face numerous pressures. Following is a sampling of research findings:
As most payment professionals would agree, merchants are not big fans of change, but updating a legacy system in the digital-first world is not nearly as daunting as it used to be. Yesterday's purpose-built POS systems frequently required heavy upfront investment in terms of equipment, training and maintenance fees. And limited shelf lives were overshadowed by threats of noncompliance and obsolescence.
Today's payment solutions, by contrast, are designed to seamlessly adapt to ever-changing requirements, global consumer preferences and payment methods. Managed services include remote monitoring and continuous upgrades to keep technology secure and up to date. In addition, integrations are a snap because most modern systems are built on open source, processor-agnostic architecture.
"Cross-border commerce can be complex, from navigating regional data protection regulations to integrating with local payment providers and offering innovative payment methods," FreedomPay researchers wrote. "Merchants have the power to streamline this process with an agnostic, scalable, open-loop solution that integrates with any banks, payment providers, and Points of Sale."
The static nature of legacy systems was arguably their greatest design flaw. Absent from dynamic political, economic, social, technological, environmental and legal forces, these rugged old machines might have gone on processing payments forever. But we've evolved considerably since the 1990s. In our quest to make technology look and feel more like us, we've taken payments to what FreedomPay calls Next Level Commerce. This hyper-connected, hyper-personalized world offers new ways for humans, machines and brands to connect and transact.
Paul Snelling, director, platform solutions at FreedomPay, urged merchants to tailor products and services to each customer in a June 13, 2022, blog post titled, "Power of Personalization – Next Level Commerce."
"To reach that 'Next Level', businesses must be prepared to adopt and adapt to a rapidly evolving commerce landscape in which you don't see customers as a whole entity but very much an individual in his or her own right," he wrote. "The individual customer has become a target which is fickle and fast-moving. And so today, merchants must focus on driving more of an experience for customers, thus beginning data-driven conversations."
Acknowledging rising costs' and inflation's impact on merchants, FreedomPay maintains investing in technology, even during an economic downturn, is paramount for attracting customers and growing a business. "The short-term financial commitment to updating legacy systems can increase merchants' medium to long term ROI by allowing merchants to compete effectively and grow customer loyalty through personalization and convenience," they wrote.
These issues were further explored in a panel I moderated at NRF 2023, with payments industry leaders Chris Kronenthal, president of FreedomPay; Belinda Harris, vice president, retail development for Spectrum Stores; Ben Love, CEO, North America at Castles Technology; and Craig Witsoe, CEO for Elo. Our roundtable was live-streamed from FreedomPay's booth on LinkedIn, Twitter and YouTube and is available on demand.
Dale S. Laszig, senior staff writer at The Green Sheet and managing director at DSL Direct LLC, is a payments industry journalist and content strategist. Connect via email firstname.lastname@example.org, LinkedIn www.linkedin.com/in/dalelaszig/ and Twitter https://twitter.com/DSLdirect.
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