Last updated: How retailers are reducing payment friction

How retailers are reducing payment friction


Listen to article

Download audio as MP3

As retailers put blood, sweat, and tears into their stores, sites, and catalogues, (especially during the holidays), there is still one crucial disconnect: The age-old problem of long checkout lines. Despite the known issue, only a select few retailers are working to correct the problem.

Sixty six percent of consumers consider long checkout lines to be one of their top frustrations with the in-store shopping experience, topped only by the inability to easily compare products, according to the Capgemini Future of Retail Store Survey.

Getting shoppers in-store helps build a personal connection by making the shopping journey a memorable experience with sounds, smells, and textures, versus an oftentimes transactional online experience. To make this a reality, retailers are employing a number of new technologies to reduce payment friction.

The rise of mobile point-of-sale devices

During seasons when hiring boosts employee count significantly, more associates roaming aisles have the potential to ring shoppers up from anywhere in the store. Both Walmart and Target are leveraging their employees to check shoppers out in-aisle, instead of letting them grumble in checkout lines near the exit. These efforts are enhancing the customer journey loop, as store employees can truly help customers with everything from locating products to providing additional information about them, and completing the purchase.

Both retailers have nearly identical programs and the timing is impeccable, as most holiday retail spend estimates suggest holiday spending will reach or exceed $1 trillion. In order to increase their share of this massive number, retailers will have to take swift action to make sure they are providing an elevated customer experience by reducing payment friction this holiday season and beyond.

“Just walk out” stores

While Target and Walmart are improving the tried and true big box experience, other retailers are throwing the retail playbook to the wind and entering new territory. Amazon Go was the first major player of its type in this space and as many consumers flocked to the new store concept, excited by the novelty and ease of use, a number of competing technologies emerged. The most formidable opponents so far have been Kroger’s Scan, Bag, Go and Sam’s Club Scan & Go.

Amazon Go has been thoroughly dissected as a disruptor in the retail store space: shoppers scan a QR code to get in, pick any items they like, and are automatically charged upon exiting. But Kroger and Sam’s Club technology take a slightly different approach to reducing payment friction: shoppers have a more active role in the checkout process—scanning their own items as they shop.

Both types of “just walk out” technologies are still in their early stages. These two different types of payment technology serve the same purpose: to make the in-store shopping experience more efficient and pleasant.

Pay ultrasonically

As more retailers warm up to the idea of adopting new ways to reduce payment friction, they run into issues related to hardware costs and device type. Should they offer Apple Pay or Google Pay? Will offering both create a cluttered checkout area? Whether a retailer chooses to use a mobile payment terminal or have the ability to ring shoppers up just using an app, issues of speed and safety come up.

To create a positive customer experience, payment providers like Equinox Payments use ultrasonic data transmission to send and receive encrypted payment information without having to invest in any additional hardware. This enables retailers using Equinox payment terminals to accept mobile payments from any customer in-aisle or at a checkstand, using the microphones and speakers already embedded in each device.

Ultrasonic tech’s utility is expansive, as it can work on a large percentage of newer devices and mobile point of sales systems in typical retail checkout scenarios and newer experiences like “just walk out” stores.

Shoppers don’t want to wait – they want options

Customers want more agency in the shopping process. They want to be able to easily locate products, find more information, and check out in no time. Retailers like Kroger and Target are helping shoppers check items off their shopping lists and get on with their day in record time. While reducing payment friction may seem like a large undertaking, many retailers are tackling it one step at a time.

While retailers may be taking slightly different approaches, the central idea behind the race to a better customer experience is the same. The aim is to take ownership of the customer journey, and as a result draw insights that enable a positive experience across all stages.

With the rise of omnichannel retail, there’s even more incentive to know the customer no matter what channel they’re checking out on. That data is priceless and creates a cycle of shoppers sharing data and in return gaining a more personalized and convenient shopping experience.

Customers are calling the shots – learn more about what they want here

Share this article


Search by Topic beginning with