This article is brought to you by ACI Worldwide.
ALEXANDRIA, Va.—The COVID-19 pandemic accelerated the demand for omnichannel commerce at convenience retailers. Consumers want (and expect) frictionless payments and mobile-app driven loyalty programs, and some retailers are excelling in this arena, while others are still playing catch-up.
“In a span of two years, the c-store customer leapfrogged all of the merchants,” said Dan Coates, evangelist for ACI Worldwide, which provides mission-critical, real-time payments software. “All of the sudden, the consumer had digital payments, and merchants were kind of stuck where they were.”
Many retailers have separate payment methods for different aspects of their businesses (in-store, forecourt, backcourt, carwash, etc.), especially retailers with legacy systems that can be decades old. Payments are siloed, and it’s difficult, if not impossible, to harvest meaningful customer data and ensure frictionless payments for customers.
“I like to think of payments as the third rail of IT,” said Coates. “You don’t want to get zapped by it. You have all of these PCI concerns, so it’s very hard to share data.”
Delivering on customer expectations is crucial for convenience retailers, as the competition for their wallets is coming from not only the convenience retail industry but also other channels—think, Amazon, Costco and Walmart. These types of retailers are increasingly offering convenience to their customers, and they’re able to cater to the individual through loyalty.
Loyalty goes beyond using promotions to influence sales—it’s all about tracking and influencing the customer journey, according to Coates.
“You have these fractured payment experiences where retailers have one provider they’re using for e-commerce, one provider for mobility and another one for in-store,” said Coates. “That does not create an effective payment experience, especially if you're trying to mine that data to really understand your customer’s journey.”
So how can retailers create a frictionless payments system and gather customer data with the least amount of disruption and complexity? Tokenization may be the answer.
This is the first installment of a two-part NACS Daily series on using tokenization to create frictionless payments systems and drive customer loyalty. Read a primer on tokens on the ACI blog and learn more about ACI Worldwide tokenization.