While cash remains king as a means of payment in emerging markets, the proliferation of technology and the ever-increasing demand for instant and fast payments are changing the way businesses, retailers and consumers transact daily.
And with Black Friday just around the corner, Barry Williams, head of sales and strategic retail relations at Payat, looks at the various payment options available to both customers and retailers:
According to Mastercard’s New Payment Index 2022, the adoption of a broad range of digital payment methods is accelerating in South Africa. The study also reveals that 95% of people in the country have used at least one emerging digital payment method in the last year.
The Covid-19 pandemic accelerated the shift from cash to contactless digital payments which was already underway, and e-commerce continued to grow and evolve as lockdowns occurred across the globe. While these evolving digital payment options provide convenience for consumers, we must not forget the impact that technology has had on the customer-retail experience.
With the annual Black Friday fast approaching, and the uncertainty of South Africa’s economic standing, retailers need to not only prepare themselves for in-store purchases, but also the ability for capacity of online purchases.
From a retail point of view, we can see that when consumers enter retail outlets to pay their bills, they’re likely to also purchase essentials such as bread or milk, or other groceries, and this presents an opportunity of hope for the retailer – that the consumer will increase their basket size and, in turn, add to the revenue stream. For a consumer, this means that they reduce their time by paying a bill and combining it with their day-to-day grocery pick-up – bringing convenience to the consumer.
Offering a convenient way to pay for your goods and services in-store, for retailers, can help one keep more leads committed to shopping and checking out.
While the use of emerging digital payments is gaining momentum, consumers still often prefer interpersonal interaction where they are able to look into the eye of the agent/cashier and receive a tangible receipt for the purchase during the transaction.
However, we are reaching the point where consumers are venturing to making payments/purchases from the comfort of their homes through the use of digital retail apps such as Shoprite’s Mobile Money Market. This allows customers to skip long queues and save on high service fees at automated teller machines by depositing and withdrawing cash at any till point at Shoprite, Checkers, and USave supermarkets nationwide.
While this is convenient, many still do not have trust in digital payments and prefer going into a physical store where they know exactly who is there and would possibly be able to see them every time they enter the store to pay a bill or make a purchase. To build trust, retailers and payment providers must ensure they are compliant and follow rules and regulations.
Look out for retailers who have partnered with organisations that they trust and who are trusted by the financial services environment.
The advantage of having these two options of digital or in-store is that, for example, South African and foreign nationals can make use of these financial services either by using mobile wallets or by loading cash directly into the wallet for the use of family or friends in need – making it convenient and cost-effective.
The difference, however, lies in that digital transactions are fast and efficient whereas in-person retail payments provide more of a customer-retailer experience, building a relationship of trust between the parties involved.
Therefore, retailers must consider venturing into digital as this provides alternative payment for billpayers and consumers alike.
Using a retail payment processing solution like Pay@ can provide you with the following benefits:
Save time: Moving to a more modern, digital service allows you to automate many of your processes. It can also help customers move through the sales funnel faster.
Review transactions: Online service providers track sales for you and make them searchable, so you can efficiently serve customers when they have questions or need refunds.
Security: Many online retail payment solutions don’t just help consumers keep their payment information secure. They can also help you get more seller protection against reversals, chargebacks, claims, and general scams, thus assisting you with risk management.
Take the lead: Many retailers are likely to already be taking advantage of digital payment solutions, but by implementing these systems, you’re better equipped to stay a step ahead.
By choosing a suitable retail payment system, it creates an easier and more robust user experience which results in an increase in engagement with consumers both online and in-store.
At the end of the day, the system will encourage consumers to pay quickly and on time. Retailers can then profit and meet financial goals faster and spend less time dealing with late payments.