COVID-19Technology

Retailers Connect With Customers Using Touchless Payments

By November 12, 2020 No Comments

Smartphone apps, some using QR codes, give customers another way to pay without touching keypads or swiping a card.

Members at a recent meeting of NeuGroup for Retail Treasury reported a significant drop in cash transactions since the start of the pandemic, and some are turning to what they’re calling touchless methods of payment to meet consumers’ needs.

  • These innovations depend on using smartphone apps and the internet instead of so-called contactless payments including Apple Pay and Google Pay. Those require a device or card which then charges the transaction to a digital wallet or bank account.
  • Contactless methods, though, require retailers to invest in technology that most US consumers do not yet use.

Finding new paths. Some members have embraced a simple approach: allowing customers to pay with the company’s own, so-called first-party app and then pick up their goods in person, while others sought out partners to allow smartphone payments at the register.

  • One of those partners is a member who works for a digital payments company that worked with retailers to introduce QR code-based payments. These allow a customer to pay by scanning a custom code on the retailer’s screen with their phone, accessing a credit or debit account.
    • “We worked with existing ecosystem partners, so we don’t have to have the merchant install a new terminal or have specific hardware or software to enable solutions,” the member said. “We’re integrating within the solution.”
  • One member, who heads electronic payments at a US-based global retailer’s treasury team, said his company partnered with third-party payment apps in Asian markets for in-store checkouts, which “have really taken off.

A gift. Another member said he has found success in encouraging customers to purchase gift cards and load them into the retailer’s first-party app, eliminating fees paid to card issuers while enabling a touchless experience.

  • “Pre-Covid, our app had been about 40% of our [customer payments]; now we have about 50%,” he said. “I’m a true believer, and it may take a while, but we are going to go from that 50% to an 80% mark in the next few years.”
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Justin Jones

Author Justin Jones

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