Today’s payment landscape is complex, from regulations to legacy infrastructures and more. Yet adding new payment methods means more than just turning one on at checkout. Factor in a U.S. economic downturn, and it’s no wonder merchants are hard pressed to deliver the payment options at checkout consumers demand.
The upside? Despite the global economic downturn, e-commerce sales amounted to almost $5 trillion USD last year, a figure expected to grow by 50 percent by 2025. As e-commerce continues to boom, retailers can adopt a new payment mindset to overcome key payment hurdles and give back to consumers regardless of economic woes. How?
Get Rid of Legacy Payment Infrastructure
Legacy infrastructures have long hindered the adoption of new technologies, especially for retailers looking to update and future-proof their payment systems. While next-generation technology is crucial for flexibility, most retailers haven’t touched their payment systems in over two years. However, overcoming legacy systems doesn’t have to be an insurmountable problem.
The future of technology is in the cloud, and it’s changing everything everywhere regarding hosting. With more than $1 trillion value in cloud adoption for Fortune 500 companies alone, retailers that move their payment infrastructure to the cloud can do away with complex central infrastructures or big mainframe servers running things.
Retailers that leverage cloud-based payment orchestration platforms (POPs) can plug in their systems — through one universal API — to solve immediate pain points. Adding new connections, advanced payment methods and workflow automation become easy with minimal developmental resources. This type of platform also provides all the infrastructure needed to scale, including an orchestration layer that can standardize all the payment methods required by consumers and even take over payment and risk connections. Optimization is attainable as well.
Optimize Checkout and Overcome Regulations
Foundry revealed that 69 percent of companies had advanced cloud migration over the past 12 months, with retailers listing it as a top priority. For retailers aiming to future-proof their payment stacks, cloud-based POPs can optimize and personalize the consumer checkout experience.
On the back end, the right cloud POP allows a retailer to test new payment types and route them to their optimal end points depending on transaction value and the geographical location of their customer. On the front end, it empowers them to dynamically filter and order payment methods offered at checkout based on the content of a consumer’s shopping cart or previous transactions.
Even better? A cloud-native POP also enables retailers to enter new markets by creating Edge Instances within a chosen country or region, keeping transactions and data secure within a local, unique Edge that’s compliant with ongoing data and privacy regulations.
Use Loyalty Tactics to Give Back to Consumers
More brands have also focused on loyalty tactics to incentivize and support consumers during difficult times. In the U.K., retailers have experimented with pre-paid systems to offset the impact of the cost-of-living crisis. Consumers make a monthly payment into a pre-paid payment system with a specific brand and can take advantage of exclusive discounts.
Loyalty is becoming a part of payments, and when coupled together with the right POP, retailers have access to rich data around customer purchasing behavior, enabling merchants to offer hyperpersonalized offers based on purchase history and a customer’s preferred payment method(s). For example, in the U.K., supermarket chain Tesco spearheaded personalized discounts with its Clubcard program, where consumers receive points and offers for regular purchases or items they might be interested in based on transaction history.
Regardless of gathering storm clouds, retailers can give customers the personalized shopping and payment experiences they want, and POPs can be just the helping hand they need.
John Lunn is the founder and CEO of Gr4vy, which provides cloud-based payment orchestration and infrastructure to empower merchants to manage and scale payments fast.
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