Apple Pay, NFC, mobile payments, digital wallets, EMV, payment security and fraud - retailers are being hit from all sides by a host of new challenges related to payments. Here are 5 things retailers - and the solution providers who serve them - need to know.

1. 5 Things to Know About
The State of Retail
Payments in 2015
5
Things
To Know
About
The State of Retail
Payments
2015

2. 1.
Payments are
growing more
complex for
retailers to
manage
2
At least 1/3 of
retailers in our
Payments survey
reported accepting
as many as 6
different kinds of
payments
Retailer-branded credit card
Digital gift card
Plastic gift card
Online card-not-present
International payments
Mobile payments

3. What this means for retailers
This complexity will only grow.
• CNP fraud is growing as EMV
becomes more widespread
• Cross-border transactions are
growing – particular challenge for
smaller retailers who grow global
before they saturate their home market
• Going local doesn't resolve complexity
– payment types online are a visible
way for consumers to gauge whether
a retailer is genuinely "local”
• Digital gift cards combine with
digital wallets to create complexities
all their own
3

4. What this means for retailers
Evaluate and prepare your payments
infrastructure today.
• Are digital and physical payments
infrastructures one and the same? Or
two different animals? Should they be
one common one?
• What is your company's current long-
term mobile strategy? Does it have an
impact on payments?
• What is your company's current long-
term loyalty strategy? Does it have an
impact on payments?
• What is your company's current long-
term promotional strategy? Does it
have an impact on payments?
4

5. PCI has slowed retail
payment innovation in
the past.
5
But those days
are gone
2.

6. • A growing number of retailers recognize
that payment security and customer
data security must go hand in hand
• Smaller retailers (<$50M revenue) see
payments as a way to be perceived as
innovative by consumers
6

7. Are you evaluating data security holistically?
Emails can be just as valuable to thieves as credit cards...
7
What this means for retailers

8. As large retailers tighten up their
security, smaller retailers are
becoming more attractive targets –
which means they must bake security
concerns into any evaluation of
payment innovations.
8
What this means for retailers

9. But all is not roses
for payment
innovations:
• Under-performing retailers focus
on payment costs over the risk
of costs associated with data
breaches
• Payments is a critical part of the
customer experience, but not
considered as part of retailers'
omni-channel strategies
9
3.

10. 10
What this means for retailers
Omni-channel strategy MUST
take into account payment as
one of the critical moments in
the customer experience.

11. Many retailers are looking at a potential
convergence between eCommerce
platforms and point of sale – payments
needs to be considered as part of that
evaluation, especially because there are a
lot of complex rules around the timing of
order acceptance, payment authorization,
and shipment.
11
What this means for retailers

12. Mobile payments is a
bright spot
• Retailers see mobile and digital
wallets as an opportunity to offer
differentiated customer
experiences
• 52% of retail respondents say
making it easier for
consumers to pay with mobile
is a top operational challenge
• Fashion retailers drive the
perceived value of digital gift
cards and Apple Pay
12
4.

13. How far are you willing to go to
create a differentiated experience?
• Starbucks has been a pioneer in
payments innovations.
• But you can outsource your payment
process too – there are lots of vendors
out there who are experimenting right
now.
• Just be careful how much or how little
you outsource – you still need to own the
customer experience.
13
What this means for retailers

14. Follow the process from your
customer's perspective.
• The payment experience across channels
should feel as similar as possible – do the
same people own payments across your
touchpoints? Have you sat down and looked
at your payment process from the customer
perspective across all of your digital channels,
side by side?
• For example:
• Why can I buy an e-gift card, but I can't
add one to your mobile wallet?
• Why does a search for “gift card” on
mobile yield a 404 error, when you sell
gift cards on the full site experience?
14
What this means for retailers
Gift card

15. Apple Pay is in the
spotlight
• Retailers rate Apple, VISA, MC, and Paypal as payments thought
leaders today
• Apple Pay wins the branding war over NFC payments – 30% of
retailers say Apple Pay is very valuable vs. only 21% for the non-
branded NFC option
15
• There is still much more
room for Apple Pay:
Retailers' interest in
Apple Pay far exceeds
their current adoption
5.

16. Retailers want a modern
message from payment
networks and card
issuers. But retailers
shouldn't be passive
about the changes
coming their way. They
have opportunities to
influence the future.
16
What this means for retailers
Apple gets a lot of credit, but
retailers want to hear from
established industry players too

17. What these payment trends
mean for solution providers
• You have a leadership opportunity to help retailers
sort through the noise
• Provide future-proofing checklists for retailer
payment infrastructure
• Make sure to talk about costs AND risks. Some
solutions providers are combining both by creating
"breach insurance" services
• Get ahead of POS/eCom convergence – is it real?
Who will the players be?
• Have a strong story around mobile payments
17

18. Where did these insights come from?
Retail Payments: Consumer
Control And The Need For Speed
contains analysis of the business
drivers, opportunities, and
organizational constraints
surrounding payments' role in
retailers' overall customer
engagement strategies.
• Detailed retailer pain points
around payments
• Adoption plans & budgeted
projects
• Survey of 117 retailers worldwide
• 17 charts and accompanying
analysis
Download your copy today!
(Registration is required)
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19. What Is RSR?
• Market Intelligence, focused on retail
• Context: the business challenges &
opportunities that drive technology
investments
• Pragmatic insights
• Powered by extensive retail experience
• Fueled by a deep bed of research data
• We help retailers keep their IT strategies
aligned with corporate objectives
• We help solution providers align their
products and messages with retailers’
needs
19
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20. 20
Thank You!
www.rsrresearch.com
Report Authors:
Nikki Baird
nbaird@rsrresearch.com
Brian Kilcourse
bkilcourse@rsrresearch.com