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Merchant Payments Ecosystem, February 18-20, Berlin
Barraclough & Co
Strategy | Proposition Development | Market Research & Insight
Retail Technology | Payments
Geoffrey Barraclough | @geoffreyb | www.barracloughandco.com | +44 7808 14202
Merchant Payments Ecosystem, February 18-20, Berlin
The Context of Contactless
Geoffrey Barraclough | Barraclough & Co
Merchant Payments Ecosystem, February 18-20, Berlin
Two nations. Two stories
Barraclough & Co | Strategy | Proposition Development | Market Research & Insight | Retail Technology | Payments
Merchant Payments Ecosystem, February 18-20, Berlin
Successful payment innovation requires the needs of all stakeholders to be aligned
QuickNo hassle
FreeWidely
accepted
Shoppers
QuickGreat CX
Hassle free implementation
Cheap
Retailers
VolumeMarginShare
Payment industry
Barraclough & Co | Strategy | Proposition Development | Market Research & Insight | Retail Technology | Payments
Merchant Payments Ecosystem, February 18-20, Berlin
Yet contactless is (slowly) gathering momentum in some markets
Visa focusing on UK, France, Poland, Slovakia & Spain
Potential user base established: •20% of Visa cards are enabled •50% of new cards are enabled (Smartcard Association)
Acceptance network established: •1.5m enabled terminals. •All new ones must be enabled by 2016
Result:•460m Visa contactless tx in 2014•of which >60% were in UK
4.4% of al l transactions are now contactless. ATV = £8.26. Very l i t t le fraud
Limit increases to £30 in September 2015
It’s a London thing•50% of contactless tx are within M25•30% of low value tx in London are contactless
Driven by
• TFL & multiple convenience stores• BarclaysBarraclough & Co | Strategy | Proposition Development | Market Research & Insight | Retail Technology | Payments
Merchant Payments Ecosystem, February 18-20, Berlin
From traditionally very simple shopping journeys…
Marketing Visit shop
Geo message sent to mobile
Make purchase
Share on FB
Post review
After sale service
Barraclough & Co | Strategy | Proposition Development | Market Research & Insight | Retail Technology | Payments
Merchant Payments Ecosystem, February 18-20, Berlin
…..to today’s much more complex ones.
Respond to marketing
Visit shopping
mall
Geo message sent to mobile
Share on FB
Post review
Loyalty points
Customise product
Visit website
Read reviews
Search recommendations
Research product
Download app
iBeacon message
Marketing Visit shop Make purchase
After sale service
Merchant Payments Ecosystem, February 18-20, Berlin
But each retail sector is changing at its own pace
High
Low
White goods
Researchedpurchase
Researchedpurchase
Habitual purchaseHabitual purchase
Impulse purchaseImpulse
purchase
Fashion F1 Grocery Fast food Petrol Rapid transit Indicative graph only. Source: Barraclough & Co
Merchant Payments Ecosystem, February 18-20, Berlin
Payments and shopping is best understood through behavioural economics
Barraclough & Co | Strategy | Proposition Development | Market Research & Insight | Retail Technology | Payments
Merchant Payments Ecosystem, February 18-20, Berlin
Our research showed five behavioural factors determining the speed of adoption of new ways of paying
Reflex Pay – how easy is it to break into long standing payment habits?
Speed is relative – shoppers and the payment industry have different concepts of time
Shoppers are easily discouraged. The first transaction has to be good.
Confirmation – needs to be clear and consistent.
There’s a strong pessimism bias with smartphone payments. Apple Pay may overcome this
Geoffrey Barraclough | Barraclough & Co | www.barracloughandco.com | +44 7808 14202
Merchant Payments Ecosystem, February 18-20, Berlin
Meanwhile retailers are focused on transformation programmes delivering a much broader and enriched customer experience.
Get me in/out quick
Kiosks and self-service
Retail as theatre
Mobile point of sale
Barraclough & Co | Strategy | Proposition Development | Market Research & Insight | Retail Technology | Payments
Merchant Payments Ecosystem, February 18-20, Berlin
Retail transformation based on three key IT programmes. Contactless and and other F2F payments will now need to integrate
with web platforms
The speed of process change will accelerate the move to the cloud.
Head office systems centered around single versions of truth
Extension of e-commerce platforms into store
Geoffrey Barraclough | Barraclough & Co | www.barracloughandco.com | +44 7808 14202
Merchant Payments Ecosystem, February 18-20, Berlin
Some questions for the discussion
Is London blazing a trail or will it continue to be unique?
In which retail sectors will shoppers genuinely value contactless enough to make the effort to learn a new way of paying?
Which retail sectors can gain competitive advantage, higher customer satisfaction or lower costs by promoting contactless?
Does the payment industry understand its customers well enough to position contactless in context of their other transformation programmes?
Are contactless cards a short, intermediate, step on the road to mobile/NFC instead?
Geoffrey Barraclough | Barraclough & Co | www.barracloughandco.com | +44 7808 14202
@geoffreyb
Report available on my website
Merchant Payments Ecosystem, February 18-20, Berlin
Barraclough & Co
B2B Strategy | Proposition Development | Market Research & Insight
Experts in Retail Technology & Payments
Geoffrey Barraclough | @geoffreyb| www.barracloughandco.com | +44 7808 14202