Payments Technology: Merchants’ New Customer Service Frontier

Let’s face it, as consumers we all want a quick and easy experience when it comes to making purchases online or in-store. To provide this desired experience, merchants are under increasing pressure to improve security measures and exceed customer expectations while also controlling cost, and many of them have already taken notice.

New research from the ACI Worldwide and Ovum 2018 Global Payments Insight Survey: Merchants’ report finds that many merchants are investing in their middle and back offices to improve the operational efficiency of their payments systems. As merchants race to streamline systems and lower costs, how can they simultaneously create an improved customer experience?

A New Source of Customer Intelligence

According to the 2018 Global Insights Survey, half of the 604 merchants polled across Asia, Europe and the Americas will increase their budgets for payments-themed IT projects in the next year, driven by the rapid growth of customers using new digital channels to make retail payments.

If these investments focus on integrating different payments systems and removing legacy technology silos, merchants can improve their ability to glean business intelligence from customer insights. In turn, they can devise new ways to personalize their services and provide a holistic omnichannel payments acceptance process.

Will Real-Time Payments Phase Out Plastic Cards?

Merchants worldwide are also warming up to real-time payments (RTPs), which are instant transactions that move directly from one’s bank account to that of another individual or business. Sixty-five percent of merchants are now formally interested in adopting RTPs. Meanwhile, 78 percent of merchants believe RTPs will deliver operational savings through reduced processing fees and faster settlement time, up from 57 percent in 2017.

The merits of RTP adoption are now so evident that 77 percent of merchants expect to see the infrastructure thrive at the expense of credit and debit cards, as customers vocalize their preference for faster refunds and disbursements. While there's still a lot of work to be done for all players in the payments ecosystem to benefit from RTP schemes, the level of interest should spark some fires on that front.

Security Breeds Loyalty

The survey also looks at fraud and enterprise security in the context of customer service. A troubling — yet not surprising — 22 percent of merchants admit their organizations have suffered a data breach in the previous 12 months, while 61 percent of respondents perceive their risk of a data breach in 2018 to be higher than last year. The need to manage fraud and protect customer data remains a serious issue, compounded further by 51 percent of merchants citing these concerns for their limited investment in improving the customer experience.

Despite such strong concerns, 59 percent of industry professionals are still more rattled by cart abandonment than fraud. There's always a struggle when it comes to improving sales conversion rates against fraud detection. However, there are fraud tools that can be leveraged to help merchants strike a balance between improving sales and keeping fraud at bay.

As high-profile breaches are reported across retail, hospitality, travel and other merchant verticals at alarming regularity, industry leaders should reconsider the true impact of adding new, preventative fraud and payments security measures with the long-term protection of customer-brand loyalty in mind. Balancing risk and sales doesn't need to be an either/or scenario.

Keeping Up With Consumers

Consumers’ preferences for purchasing the latest and greatest gadgets, online games or streaming media will continue to change as the technology surrounding them evolves. For merchants to stay competitive in a crowded marketplace, keep pace with innovation, and provide a positive customer experience through speed and security, it’s imperative they assess the speed and efficiency of their operations as a foundation for meeting all three goals.

Michael Grillo is the director of marketing, merchant and fraud solutions at ACI Worldwide, a provider of electronic banking and payment solutions for more than 5,000 financial institutions, merchants, billers and processors around the world.