Reinventing payments
Future trends are happening now
Over the past 12 months, we’ve reported on a host of emerging trends in the seamless payments space. We’ve now arrived at a point where those trends are becoming part of everyday life. Debit cards have overtaken cash spending and UK Finance reports that contactless now accounts for £69bn a year. Invisible payments are definitely starting to gain traction. The question is why now?
At your convenience
According to Nick Kerigan, MD for Future Payments, Cards & Payments at Barclays, the past year has seen us pass a tipping point:
“The trends we’ve been talking about for some time are really happening – and beginning to accelerate. Payments are being absorbed into the customer experience to provide seamless services for consumers. This is happening for two reasons. First, convenience is beating price as the driver for adoption of new solutions, at least at this stage of the economic cycle. Second, digital solutions are winning in the physical world. In our vision of the future, the customer will be at the centre, controlling the devices that orchestrate their lives.”
In a mobile-first world where speed and ease-of-use are everything, creating a smooth, omni-channel experience for customers is essential. Where shops and ecommerce experiences used to be quite separate, digital solutions and experiences are now winning in the physical world as well. From contactless ticketing on public transport to ‘speedy bar’ technology in sports stadiums, more and more businesses and organisations are shaping their offerings around convenience and the technology we use every day; contactless, smartphones, wearables, digital assistants and the ever-growing Internet of Things.
The future is now
In a simple but endlessly useful example of this, Costa and Barclaycard partnered to launch the world’s first contactless coffee cup, allowing coffee-lovers to make purchases with their reusable cup, top up their balance and track payments online or via a dedicated app. The result? More environmentally-friendly behaviour and less friction at the till as commuters get their early-morning caffeine fix. Elsewhere, in 2018, Barclaycard research revealed that more than a third of restaurant-goers (36 per cent) find waiting for the bill the most frustrating part of eating out. In response, we partnered with high-street restaurant chain Prezzo to create the UK’s first 'Dine-and-Dash' restaurant – tap the app to check in at your table, order, eat, then leave as soon as you are ready.
Of all consumer sectors, retail has perhaps faced the most dramatic overhaul in recent years. From in-store tablets for browsing and ordering to personalised mobile offers delivered to customers in-store, devices are becoming more and more integrated into the in-store shopping space. Next-generation retail looks set to prove that the high-street still has a lot to offer. Through a new concept store in Watford, Debenham’s Chief Executive Sergio Bucher has vowed to “make shopping fun again”, with in-store experiences and digital integration designed to attract people to the experience of shopping in physical stores, as opposed to online.
In recent months, Amazon Go has seen one of the most significant leaps forward in retail, creating a bricks-and-mortar shopping experience where the customer can go in, grab the things they want, then leave– no queuing necessary. Currently operating in just three locations, Amazon is reported to be planning to have 3,000 Amazon Go stores open by 2021. In the UK, Barclaycard’s Grab+Go experiment provided a similar experience to shop without checkout in-store, allowing consumers to scan and pay for items as they go. Tesco has been trialling “shop and go” technology, and Co-op and Sainsbury's have experimented with pay-in-the-aisle allowing customers to scan and pay for their groceries on their smartphone. It’s clear that this is a space with huge potential.
Where do we see opportunities?
We can expect to see increasingly slick and polished digital experiences popping up in our daily lives. As the growth of 5G and the Internet of Things brings integrated connected payment functionality to more smart objects, at Barclays, we see opportunities in several key areas.
Expanding on this, Nick Kerigan comments: “As we’ve covered before, the past couple of years have seen growth in mobile payments but payments alone are not enough to drive significant growth in the mobile space; after all, you can achieve more or less the same standard of convenience using a contactless card. The real potential lies in using the incremental functionality of mobile to create better experiences using variables like geolocation, identity and control.”
Championed by digital disruptors, this is being picked up in the banking space to align with customer demand for smart banking experiences enriched by technology. Many services now let you see the location of where you bought something, information only available via mobile. Over the past 12 months, we’ve upped our efforts in the space, for exampleworking with fintechs like Flux to integrate digital receipts.
The success of mobile payments relies on both sides working well – an opportunity missed all too often. We’re seeing traditional tills being traded in for tablet-like devices with integrated online payment gateways like the Barclaycard SmartPay Hub by Epos Now. Equipped with an app store, this opens up a new world of easily updateable services and removes friction for employees and their customers; most of us are used to using touchscreens and tablets. Meanwhile, in the Barclays Accelerator programme we have recently welcomed Paid; a fintech that promotes faster, smarter payments for gig economy workers.
The growth of 5G and the Internet of Things will see payment functionality added to more objects. In the future, consumers will expect to see connected payments everywhere they look – with connected cars becoming another prime space for commerce. With an increased focus on software over hardware, in the future you may be able to pay for your fuel simply by pushing a button in your car, unless of course you have a self-driving car that pays its own way. Known for pushing tech boundaries in driving, Tesla is already leading the way in connected cars, with supercharging, battery capacity and advanced summon capability coming soon.
We are heading towards a world built around the Internet of Things and machine-to-machine communication. As everything goes smart, it will be up to us as payment providers to embed payments inside all these experiences. Making payments a part of the experience rather than a separate step shows customers we value them, their time, and their peace of mind.