We at Mercator have been writing about what we are calling the Paradox of Payments: as consumers become more aware of the growing number of options that they have for payments, the payments themselves are becoming invisible, disappearing as separate workflows and combining with the workflows that created them. Amazon pioneered this with their “Buy Now” button that enables consumers to bypass the standard ecommerce flow of shopping cart review, payment selection, and shipping choice. One click completes your purchase using your saved preferences, including payment type.
As this article from CIOL points out, the race for omnichannel shopping solutions has the raised the bar for payment expectations. Merchants have long integrated operations and marketing with payments to ensure a positive buying experience for the consumer. Enabling omnichannel commerce at its most basic level enables the consumer to shop in-store, online, and via mobile, and most merchants have accomplished that. True omnichannel, however, means recognizing the consumer across all commerce channels and leveraging data across channels to get a 360° view of the consumer, their value to the merchant, and their potential value to the merchant. Since many of the vendors that merchants use to support their marketing and operations are channel-specific, this creates a huge integration challenge.
Omnichannel commerce continues to challenge legacy payments companies because making the purchase is only part of commerce; you also need to consider the fulfillment and potential for returns. Buy Online and Pickup In-Store (BOPIS) is only the start… you have to consider BORIS (Buy Online and Return In-Store), BISRO (Buy In-Store and Return Online), and BISHIS (Buy In-Store and Have It Shipped).
For merchants using multiple payment providers with channel-specific or region-specific advantages, investing in a payments orchestration layer in their tech stack is a must-have. In any of the above scenarios, consumers expect a refund to be processed to the card they used for the purchase, without having to provide the card credentials again. Fraud prevention algorithms running on the e-commerce site should be able to tell if the online buyer has shopped in-store before and access that payment history.
In the payments space, seamlessly integrating payments technology across an omnichannel environment is a much heavier lift than simply enabling purchases across multiple sales channels.
Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group