Improving the customer experience should be at the top of every company’s strategic objectives list in 2019. To win new business and keep current customers, every aspect of the purchase process should be scrutinized to see where improvements can be made, including retail engagement strategies.
Since customers want to complete their purchases as quickly as possible after making the decision to buy, payments have become a focal point of in-person, online, and mobile transactions. If a line is too long or the checkout experience is taking too much time, many customers will abandon their physical or virtual shopping cart.
This need to improve the payments part of the customer experience has led to the development of what’s called frictionless payments. This article explores what that means and how you can incorporate and automate this process while delivering a better customer experience.
Defining Frictionless Payments
Frictionless commerce leverages data from devices, apps, and websites to integrate buying opportunities in a seamless way that feels natural for customers. Frictionless payments include mobile applications like those used by ride sharing companies, as well as Amazon’s Just Walk Out technology and a host of on-demand platforms.
It also involves a mobile wallet that digitally stores credit card, debit card, and rewards card information on a mobile device. The third type of frictionless payments are contactless cards that allow a customer to wave their credit or debit card near a payment terminal to pay without swiping or using a chip card reader.
Statista estimates that frictionless payments will grow to approximately $500 billion annually until 2021.
How to Offer Frictionless Payments
To provide a frictionless payment experience, it’s important to start with an overall customer experience strategy that addresses all aspects of a customer’s journey, including the payment component.
This means defining the various types of journeys your customers take and what defines a good experience. Take the journeys yourself and think about how you act as a consumer to incorporate those behaviors and expectations.
Determine how you can leverage technology and be on channels where your customers are buying, including through voice-assisted devices. Incorporate the payment processes that integrate with all these channels and provide the tools you need to shorten the checkout and payment process. This may mean looking for a payment service provider that has already constructed a frictionless payment process that you can plug into your business model.
Mobile Frictionless Payments
With more shoppers opting for mobile payment options, it’s important to integrate a frictionless payment process on this channel. Leading the way are companies like Amazon, which is offering a benchmark illustration of how mobile frictionless payments work through its Amazon Go stores.
Here, customers can scan an app to enter, select their items, and leave while they are automatically billed for what they selected. No one has to stand in line to wait for each item to be scanned and then pay.
There is a single viewpoint to frictionless payments that offers a checkout free experience in retail stores. Similar options can be added to kiosk businesses, quick serve retailers like 7-Eleven that is adding a test Scan & Pay program, and even fast food restaurants where orders can be plugged in online, paid for, and just picked up.
Addressing the Fear
Despite many consumers enjoying this type of experience, many admit they are still afraid of frictionless payments, primarily concerned about security and data privacy. Half of consumers cite fraud, while the other half are concerned about how their data is used. Also, a majority of consumers believe voice-activated systems are not secure or think they will be overcharged. Many also believe checkout-free stores are risky.
Yet, there are signs that some are gaining confidence and it may just be a matter of time and trust-building before more enjoy the benefits of frictionless payments. Growing in numbers, Americans have used frictionless payment in apps, tested a voice-activated payments system, or made a payment through their smartwatch or mobile device.
By exploring frictionless payments now and sharing how you can secure the transactions, your customers may start realizing how this option can enhance their experience with your brand, while saving themselves a significant amount of time.