3 Reasons You Need to Enable Frictionless Payments for Your Merchants

Instead of improving payment experiences, a better strategy may be to move them into the background.

The last touchpoint in a customer experience can be the most memorable. In many shopping experiences, that touchpoint is payment. An otherwise pleasant shopping trip where a customer finds what they’re looking for can be overshadowed by complicated, time-consuming payment processes. On the other hand, a clunky online or in-store experience may be able to be salvaged by a frictionless payment process that doesn’t take any more than a tap or a click.

In addition to contributing to a positive impression of a brand, however, frictionless payments play an important role in three areas of a successful business strategy:

1. Meeting customer expectations

No merchant wants the reputation of making payments difficult for their customers. If you put on your consumer hat for a moment, you can probably think of one or two brands that make it harder than necessary to make a purchase, whether you’re shopping online or at a brick-and-mortar store.

The problem with added friction during payment experiences is that it may begin to factor into where people choose to shop. A 2020 Walker survey found that customer experience now ranks higher than price as the most essential brand differentiator. Less payment friction could mean more customer loyalty.

2. Operating during COVID-19

The coronavirus pandemic drove a hands-off approach to merchant interactions. COVID-19 accelerated online ordering, buy online pickup in-store (BOPIS), and curbside pickup, enabling people to keep a safe social distance. But it also changed the way people prefer to pay. Consumers in 2021 want payment experiences that are touchless, fast, and easy.

NMI’s 2020 Cost of Cleanliness Survey found an increase in contactless payments preferences and use and also that 43 percent of consumers actively avoid shopping where contactless payments aren’t available. Moreover, nearly one-third of shoppers are uncomfortable using cash, which involves handling unsanitary currency and spending extra time at the point of sale (POS) counter while a cashier makes change. Removing that friction can enhance CX during the pandemic and beyond.

3. Keeping up with the competition

Some merchants are working to create totally frictionless payments. The most well-known example is Amazon Go. The enterprises’ “Just Walk Out” technology enables customers with the Amazon Go app to sign in when they enter the store, choose the items they want, and then exit and receive a receipt for their purchases. The system uses smart cameras, unique package codes, shelf sensors and other technologies to accurately track what the consumer purchases and charge the correct amount.

The system is advanced, but the payment experience for customers is basically nonexistent – they make payments with no effort. Once consumers have a taste of ultimate convenience, they’re bound to crave it any time they do business.

Solutions that Shift Payments to the Background of Shopping Experiences

Although creating an “Amazon Go” solution for every merchant use case may not be possible, you can enable your merchants with more frictionless payments through:

• Omnichannel payments: Providing one platform to enable payments on all channels will provide merchants and customers with consistent experiences regardless of how they engage and seamless transitions from one channel to the next during BOPIS or other cross-channel shopping journeys. Tokenized payment data can remove friction even more, remembering the customer and only requiring a click to authorize payment.
• Online payments: One of the most important moves brick-and-mortar merchants could have made in 2020 was linking their website to an online payment page from their payments provider. This enables merchants of all sizes to engage in e-commerce and provide their customers with the ability to pay from home with just a few clicks.
• QR codes: Consumers’ preference for contactless payments increased in 2020, but not every merchant has the technology to run a contactless card or near-field communication (NFC) mobile wallet transaction. They can, however, create touchless experiences with QR code payments. Without having to download an app, consumers can simply scan the QR code with a smartphone to go to a link to make their payment without cards changing hands – and without friction.

Progress Toward Frictionless Payments

Compared to payment options available to consumers a few decades ago, there are many more choices today – and consumers prefer the ones that are most convenient for them. Payments that are automatic or that take minimal data lookup and entry are the methods customers are more prone to use.

With the need to optimize customer experiences to gain a competitive edge, merchants can’t afford to add friction with a cumbersome or slow payment process. Technology is available that helps move payments into the background of customer experiences so consumers’ attention remains on the great service and products merchants want consumers to associate with their brand. Frictionless payments move cards, card numbers, PIN entry, authorization and more out of the way, still providing secure, accurate payments – and providing the great, CX-enhancing final touchpoint to the shopping journey that every retailer wants to create.

Get in touch with NMI today to learn how our solutions can help you enable frictionless payments for your merchants.