If you have an in-store retail operation, you will need to think creatively in a bid to optimise sales. There are many reasons for this, with the primary example being the rise of online shopping and the flexibility that this has offered to consumers. When allied with traditional market forces and the intense competition that exists between brands, it is easy to understand why bricks and mortar retailers have been forced to diversify their approach and offering a wider range of payment methods.
There is ample evidence to support this too, with the latest industry figures confirming that Western economies processed more contactless payments in the first half of 2015 than during the whole of 2014. In fact, Â£2.5 billion more contactless transactions were completed during this time, and this underlines how the proliferation of contactless payment methods such as Visa debit and Apple Pay have altered the course of the consumer market.
The core Benefits of offering Contactless payments to customers
While this should be incentive enough to offer contactless payments to customers, it is important to consider the additional benefits of this in the current, real-time market.
Here are three of the most prominent:
The Cost of Interchange rates of Consumer Credits has been capped
Recently (on the 9th December, to be accurate) Visa and MasterCard announced that they would be reducing the interchange rates applied to consumer credits to just 0.3%. This is part of sweeping EU regulations that have been designed to assist consumers, as financial leaders have looked to cap interchange rates and forced service providers to tailor their charges accordingly.
While we have yet to see how this pans out, it is likely that business-owners will benefit from a flat pricing fee and that reduces the amount that they pay to service providers such as MasterCard and Visa. In turn, this affords businesses the opportunity to share these savings customers, helping them to drive a higher volume of sales while optimising profitability.
Contactless payments offer greater Flexibility to consumers
Increasingly, we have seen customers come to rely on and become accustomed to the flexibility offered by contactless payments. Given that not all customers carry huge amounts of cash or even their debit cards in some instances, the option of contactless payment solutions makes it easier for consumers to complete impulse purchases at the register. This can accumulate to a potentially large sum of money over time, and the low-cost of implementing such solutions makes it a no-brainer for firms.
Another thing to consider is the limit applied to contactless spending, which until recently was fixed at a maximum Â£20 per individual transaction. This is a relatively small amount, but the decision to lift this creates even greater opportunity for profitability. Over time, contactless spending will become increasingly prominent and trigger higher profit margins for businesses that ultimately choose to accept this method of payment.
Contactless payment solutions are more secure than ever
Historically, firms may have been loath to sell products and services online due to potential security issues. This was in the day of 40-bit encrypted sites, however, which were extremely vulnerable to the machinations of hackers and cyber-thieves. Modern sites are equipped with 128-bit encryption, however, which is the industry for financial and gaming outlets that generate billions of pounds online annually. The same principle can be applied to contactless payments in-store, which initially raised concerns over security and transparency.
This is no longer the case, however, as contactless payment methods are not only secure but also have a reputation of placing consumers at ease in 2015. Business who capitalise on this can ultimately diversify their income stream successfully and offer the kind of flexibility that their consumers demand in the modern age.