Paytech has become an integral part of company processes since the onset of the global pandemic, and the adoption of this technology has influenced every corner of operations for businesses large and small.
Here to discuss this transition, and how it has altered payment processing for those at the forefront of technological advancement is Ethan Anderson, the CEO and Founder, MyTime; a software that handles scheduling, point of sale, customer engagement and business analytics.
Over the past year, we’ve witnessed a major shift in how payments are collected and processed due to the COVID-19 pandemic. Mobile and contactless payment became the preferred methods over swiping credit cards and signing paper receipts with common pens. This change in behaviour has sped up the development and adoption of enhancements to Point of Sale (POS) systems such as the ability to pay for services and tips via native apps or text message when a tokenized credit card is stored on file or contactless card readers when it’s not.
While these changes were not directly spawned by the pandemic, it certainly helped to hasten the changes. In 2018, a Pew study showed that three out of ten adults made no cash purchases during a typical week. Credit card loyalty points and cashback programs have also encouraged card spending over cash, and the more consumers pay with a credit card, the more perks they typically receive. In order for small and large businesses to stay competitive and maximise revenue, these changes in consumer behaviour should drive a new strategy.
To attract new customers and keep them loyal, retailers today must provide multiple, easy ways to buy and pay for goods and services. Providing a contemporary and seamless checkout experience means modernising the payment infrastructure to include contactless payment options, mobile and online payments, and upgrading payment hardware at brick-and-mortar locations. It’s not just nice – it’s necessary to appeal to younger customers. Many service-based retailers in the beauty, pet and fitness spaces, for instance, collect payment upfront to help minimise cancellations and streamline the check-in/checkout process.
Some small businesses can be hesitant about even a slight increase in payment processing fees, especially as they are struggling to ramp up to pre-COVID revenue levels. While accepting cash incurs no interchange fees, the US Consumer Payment Study conducted by TSYS (updated in January 2021) shows that consumers spend up to 83% more when using a credit card versus cash. Additionally, modern payment options are one aspect of providing great customer service that can be coupled with programs like memberships, gift cards, referrals, and loyalty points to negate the initial investment in system software upgrades and increased fees.
If a customer purchases a gift card or package at one location and uses it at another, payment tracking, reconciliation and reporting become even more challenging. When businesses process thousands of transactions in a week or a day, there is no feasible way to properly manage finances unless a system-wide solution is in place; the standalone card terminals from years ago don’t cut it in the modern world. While the upfront costs and maintenance fees may initially deter companies from making the investment, the payoff of an integrated POS system with an integrated credit card processing system is worth the upgrade.
Investing in a modern payment solution provides multiple direct and indirect benefits. Companies value efficiency, time savings, and reduced human error and they want to provide the best experience for their customers as possible. But the real value from modern POS applications comes from the deep insights that can be gleaned about which products, services, employees, and customers provide the most value. Automatic flagging via reports and dashboards can highlight areas that need immediate attention, while high-performing areas can be studied and replicated across more locations. The most successful Point of Sale solutions today use data science and AI to extract valuable information from aggregated transactions that companies can use to take action in previously unexplored areas.
Unlocking Long-Term Growth and Customer Satisfaction
Customers expect more than just an announcement that a store accepts Apple Pay, or that they can add a tip from their cell phone; they also need to feel safe and secure making these transactions. Modern, sophisticated solutions offer more secure payments as well as monitoring and risk mitigation. Companies and customers can rest assured that their personally identifiable information (PII) data is protected, and copious investments of people and money are put into monitoring any potential security breaches.
As companies strategise and plan for future growth, an overhaul of payment processes and Point of Sale software may not be the obvious top priority. However, implementing a modern payment system instils a single source of truth for financial data across all locations, provides customers with a more frictionless shopping experience and establishes the foundation for more accurate financial planning and growth.