Where is the retail industry headed next? In previous parts of this series, we discussed how the user experience is driving innovation, new technology, and omnichannel marketing across different retail verticals. Tailored, seamless digital/mobile environments and platforms are helping brands offer an immersive experience to shoppers both in-store and online. Payments are critical to the update of this user experience.

Customers expect retailers to accept more and more forms of payment. From Apple Pay to bitcoin, chip cards to wearable devices, retail customers are driven to be the primary drivers of new payment innovation.

How is the payment process changing?

The way we pay for things has changed throughout history as technology becomes better and more sophisticated. The history of commerce has seen payment change from a simple bartering system to one where some cities in Sweden and India are driving toward going completely cashless.

Early societies adopted currency in the form of metal coins, shells, and other precious metals beginning in ancient Rome. The Chinese developed paper money, Italians invented the banking system, and from there, modern economies grew rapidly. Globalization and commercial trade spurred the need for a common currency, and in 1913, the United States established the Federal Reserve to protect the financial interests of the nation and to unify currency. When credit cards were introduced in the early 20th century, Diners Club became the first way to make spending more convenient for everyday consumers.

It wasn’t until the 1990s with the rise of the internet that e-commerce and online payments became necessary. Paypal is widely regarded as “the poster child of e-Commerce payment system,” processing $56.68 billion in payment volume in the third quarter of 2015 alone. Today, Paypal still accounts for a huge number of transactions, but new innovations in mobile payments are catching up. Apple Pay, Google Wallet, and more wallets out there are competing for market share. According to industry analysts, “the mobile payment market is anticipated to grow at a CAGR of 33.8% from 2017 to 2023 to attain a market size of $4,574 billion by 2023.”

What’s driving the change in payment method? Today’s customer has different expectations of their retail experience.

How does the payment process influence the user experience?

Customers now expect a great retail experience more than ever before. According to some estimates, almost 74% of Americans prioritize experiences over products. Payments are a critical piece of building a frictionless, user-friendly experience.

When a customer has a hard time navigating a retail store, whether online or in a brick-and-mortar location, they’re far less likely to return to that retailer. Data shows that almost 21% of the online shoppers abandon their cart when faced with a long and tedious check out process. When designing a store’s UX, brands must consider the entire journey: from entering the front door or home page to final checkout, and then the return path. The payment gateway is one of the biggest opportunities to enhance customer experience. As Milton Santiago, founder of FinTech Advisors LLC, describes, it’s all about using technology that makes the experience more human. A seamless, trustworthy checkout experience builds trust with the customer and makes it easy for a retail shopper to complete their transaction with confidence.

There are a few things retailers can do during the checkout process to reassure customers and build trust:

Display familiar logos and payment methods so customers know what payment options are available

Host the payment portal within the company’s e-commerce site (rather than sending them to a different page)

Provide a consistently-branded payment gateway both in-store and online. Your check-out location should look like it belongs in the shopping context

Follow up the transaction with a branded receipt and thank you email confirming the payment went through securely

When the payment process is slow, requires many steps, or is misaligned with the rest of the environment, customers will quickly start to question their trust in the brand. Technology can impact these factors and help retailers provide a smooth checkout process.

How can technology influence the payment process?

Where are payments headed next? New technology is changing the payment process to make it more user-friendly. From integrating digital identity to optimizing the checkout page, retail brands are focusing on making payment more efficient, engaging, and easy to learn.

One example of how technology helps retailers void cart abandonment: single-click payment. A customer can save their card details, solely using the CVV to authenticate a purchase after the page pre-loads their payment information. Autofilled forms help returning users quickly input their shipping and billing address, email, and more. These features are just the beginning of making the payment process more user-friendly.

Overall, the retail industry is seeing the rise in popularity of integrated payments. Customers demand the ability to pay however they want: via verified identity, mobile device, wearable tech, or by saved card. Retailers need to be flexible, efficient, and secure in the way they accept payments in the future.