Evolving payments tech challenges merchants to keep pace with shoppers' expectations

As payments technologies continue to evolve from year to year, some merchants are left wondering how best to keep pace with changes that might affect their bottom line. 

Buzz words such as artificial intelligence, blockchain, encryption and tokenization now pepper almost every conversation about the evolving payments environment. And while each of those concepts continue to change and become more advanced, it's vital that big-name merchants, restaurants and hospitality companies monitor any developments in their quest to enhance and improve the customer experience. 

That was the overarching message to retailers from a group of executives that participated on a panel Tuesday at the Oracle Industry Connect in New York City. Executives from 3C Payment, FreedomPay, MasterCard and WorldPay shared opinions on how retailers can keep pace with evolving payments technologies. 

At the heart of the issue is how retailers can be sure they are changing with the times with the right technologies in order to provide the best experience, which help leads to a more loyal customer that will do business with a brand again and again. 

Andy Meadows, senior leader at Worldpay, mentioned the tried-and-true Uber example, but managed to do so with a salient observation about the ride-sharing company.

"Why are we picking Uber over the taxi stand at the airport [when the taxi stand] is right in front of us and might be less of a wait?" Meadows said. "It’s because of the automated payments experience, the ability to make the payment without physically have to [pull out a card].

"Merchants have to start thinking about [those experiences] or they will get left on the curb."

Betty DeVita, the chief commercial officer for MasterCard, took the Uber example a step further and discussed the added "perks" that come with the automated payments experience.

"Just delivering the same experience is not an incremental value, but different experiences help drive incremental value," she said. "Uber is about the enhanced experience. You can see where you are; see the route; see the driver's rating."

But which technologies can help retailers, restaurants and hotel chains deliver a better customer experience?
Blockchain is something that is brought up countless times at such industry gatherings. The panel's moderator, Oracle's Stuart Taylor, asked the executives whether blockchain, with "this big mythical promise to solve all sorts of problems," is a technology retail brands should watch.

"It's a tech that's not going away and from a payments perspective, we're keeping track of it," Matthew Donnelly, vice president of security and solutions for FredomPay, told audience members. "It's a critical tech to the industry."

Donnelly added he believes blockchain can be a tool in protecting against fraud and enhancing security because of how data is stored. Cryptography protects data stored on specific blocks within the chain. Data in the block can't be altered without altering all subsequent blocks. 

Worldpay's Meadows believes that can lead to some innovative ways certain merchant types could use blockchain with the help of another emerging technology: artificial intelligence.

For example, Meadows said theoretically hotel chains could store in the blockchain a traveler's identification and payments credentials so that information essentially stays with the person no matter where they travel. That, in turn, would eliminate check-in and check-out steps for the traveler at a hotel to improve the customer experience. 

Another topic the panelists discussed near the end of the session was the NFC versus QR code/barcode argument. 

In general, NFC-based mobile wallets such as Apple Pay and Samsung Pay haven't struck a nerve with consumers and merchants in a way many industry executives thought would happen by now. On the other hand, companies such as Alipay, Starbucks and WeChat have found resounding success with mobile payments that rely on QR codes/barcodes.

Part of the reason for this, at least in the case of Alipay and WeChat, is based on "the landscape and history of the marketplace and where they are now," DeVita said.

QR codes have worked best in India for a number of reasons. The technology works with any smartphone and merchants can display a QR code sticker to accept payment. That helps lower the barrier to use over something more advanced like NFC.

Meadows then took the conversation in a different direction and commented on NFC's lack of urgency, so to speak, compared with something like the EMV transition in the U.S. The card networks mandated the move to EMV, which forced banks to issue chip-enabled cards that consumers learned how to use. 

No such "force" exists with NFC-enabled mobile payments, Meadows said. 

"NFC needs adoption on both sides," he said. "You have the consumer who needs to adopt the wallets and the merchants need to accept it. There's no 'force' to accept or use NFC payments."