It’s been nearly two years since the October 2015 deadline for US merchants to become EMV (chip and pin card technology) compliant passed. While the US was considerably late to join the party (Europe and Asia have implemented this technology years ago), payments have become safer with a marked decline in fraud. Amidst this shift lies a hidden opportunity for online retailers and merchants to not only improve a broken checkout experience but also deliver a personalized shopping experience.
Though cash has been historically the de-facto mode of payment, the last few decades have seen a gradual decline in its use. Consumers in advanced economies are migrating over to cashless alternatives through the EMV-enabled point of sale (POS) systems and more recently mobile payments such as Apple and Samsung Pay.
While EMV-based cards do away with cash, they have two major flaws they’re slow and very impersonal. Average checkout times hover around 16 seconds, which gives customers time to mull over their purchase and evaluate if they want to return to your business. As it stands, customers first have to wait for their card to be identified and again for pin verification. Ideally, you want customers to experience as little hassle as possible and focus on the shopping experience to make a lasting impression. Payments made through NFC-enabled smartphones and POS machines promise to reduce this friction and improve customer experience.
Segment customers based on data at hand
Long before shoppers reach the checkout counter, NFC can be used to deliver relevant messaging to a customer’s phone based on their previous shopping history or even current location in-store. This can be seamlessly achieved with the use of a handheld POS system, which enhances the shopping experience in real-time. For example, if a customer who has previously purchased boots from your store returns to the shoe section, you could use NFC to send a product specific coupon directly to their phone. Alternatively, you can deliver helpful content related to their purchase to their phone after they have left your store.
Hassle-free incentive programs
Reward programs that provide discounts or offers to loyal customers are critical for retention and long-term success of your business. A big disadvantage of such existing programs today is that they require customers to carry physical cards or remember unique identification numbers, which only adds hassle to the process. With POS machines that accept mobile payments, you can link a customer’s profile to their loyalty program so that points or discounts are reflected automatically on their bill without any effort on the customer’s end. This improves user experience and entices them to return and shop with you repeatedly.
Track customer trends and inventory
In addition to the collection of payments, NFC-enabled POS machines can be used to better understand consumer trends and behavior. You can track payment history to gauge which products or services are in-demand and make use of big data analytics plan your inventory accordingly. This helps you avoid situations where customers are unable to complete a purchase either due to poor planning or lack of prior knowledge on your part. If customers experience the out-of-stock scenario enough times, they’ll be reluctant to return and shop again from a store.
Save money on fee
With multiple mobile payment companies and gateways in the market, you’ll be hard-pressed not to find one that charges a lower cost per transaction than those associated with card payments. This gives you the freedom to investigate different mobile payment programs and choose one that is cost effective for your business rather than having to go with the status-quo.
As the shift towards mobile payments continues to gain traction, it’s important to recognize the range of benefits it can provide besides faster checkout. Beyond just convenience, adopting mobile payments provides your business with data that you can tap into to improve user experience and retain customers.