How are retailers diversifying their payment offerings?

The pandemic is affecting all businesses. Many companies have had to rethink their business model to accommodate the changes brought about by the pandemic. With mobile ATMs, online doctor consultations, home delivery of medicines and groceries, we entered a digital world almost instantly. One sector that saw many changes was retail.

Due to the rapid spread of the virus, many consumers changed their purchasing behavior and quickly switched to online platforms for all their shopping needs. Consumers who were used to buying everyday necessities from kiran Cash shops started to opt for digital means of payment. While many retailers were already equipped with digital payment acceptance points, the others needed to integrate digital offerings to meet the changing needs of their customers. E-commerce has also experienced a huge upswing since the pandemic. According to an industry report, India’s e-commerce industry is projected to grow 84% to $111 billion by 2024.

In addition, the pandemic prompted consumers to buy essential products, and their purchasing behavior towards non-essential goods was changed for a long period of time. In such a scenario, it became almost imperative for retailers to diversify their payment offerings in order to retain their existing customers and attract new ones.

Let’s look at some ways retailers are diversifying their offerings:

Inclusion of value-added services at the PoS

PoS devices play an important role in helping retailers diversify their payment offerings. While card payments have already been accepted in many retail outlets, different retailers have integrated various value-added services into their PoS devices. For example, a leading payment provider offered auto insurance renewal at gas stations via PoS machines. Offers like these not only save the customer time, but also offer an enhanced experience in the outlet. Additionally, retailers have started running loyalty and rewards programs through PoS.

Cash@PoS was created as a further offer at the PoS. With many customers reluctant to use ATMs in times of Covid-19, a retailer offering Cash@PoS facilities can have an advantage over the others. In the coming period, this facility will be offered by many retailers to enhance their customers’ shopping experience.

Loyalty Cards/Gift Cards

The adoption of digital payment methods has been accelerated during the pandemic. This growth is due to the spread of e-commerce. From online shopping to buying groceries and essentials, the e-commerce industry represents the primary use of online prepaid cards. These cards offer customers the ability to pay without worrying about carrying a wad of cash have to. Additionally, gift cards are seen as a substitute for cash during the festive seasons. Gift Cards may be used by customers to make preloaded purchases at certain retail locations.

Seamless contactless options

Contactless payment alternatives such as UPI, QR code-based payments and AePS have seen rapid adoption in the recent past. For example, in large retail stores, UPI-based payments are in demand to speed up the billing process. In addition, tap-and-pay cards are preferred by customers for smooth, secure, and faster low-value transactions. The increasing acceptance of mobile payments, internet availability and the need for convenience have also led to a rise in QR-based payments. Many PoS providers have installed upgrades that allow merchants to accept QR-based payments on the device itself. This reduces the need to bear additional costs for the acceptance infrastructure. For example, Ongo POS machines are equipped to accept all modes including closed loop cards, UPI and QR code based payments, eliminating the need for OMCs to have multiple POS machines. Solutions like these help retailers diversify their offerings by providing an enhanced customer experience.

Easy payment options

Consumer purchasing behavior has evolved over the years. This has led to an increase in easy payment options such as Buy Now, Pay Later (BNPL). According to a global payments report, BNPL’s e-commerce market share is expected to grow from 3% in 2020 to 9% in 2024. This loan instrument helps customers to repay the amount within the stipulated period. With low or no interest rates, a solution like this makes payments more convenient and smoother for customers.

However, retailers are now exploring different offerings from the country’s diverse payment infrastructure. In addition to improving the customer experience, this diversification helps retailers streamline their payment processes, reduce reconciliation time, and mitigate theft. Additionally, the evolving nature of PoS, changing customer behaviors, and the addition of newer payment types have encouraged retailers to go beyond traditional channels and embrace digital payments wholeheartedly.

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