The Evolution and Future of Payment Systems
As transactions are increasingly digitised and customer expectations continue to evolve, the concept of seamless omnichannel experiences has become more important than ever. Earlier this year we had the opportunity to sit down for an enlightening discussion with Lee Jones, the CEO of Worldline Merchant Services UK. Our discussion helped to shed light on the digital transformation that’s currently shaping the payment industry. It also offers insight into the future of payment systems and payment services.
Empowering leadership: igniting innovation in retail
Something that Lee Jones places particular emphasis on is the pivotal role of leadership in driving innovation. He focuses on creating an environment that empowers employees to excel. This highlights the crucial balance between removing obstacles and providing guidance. Lee’s perspective resonates with the understanding that an empowered team translates to better customer service and innovative solutions.
Beyond Worldline, UK retail leaders have harnessed similar strategies, fostering innovation by encouraging diverse thinking, embracing risk-taking, and promoting cross-functional collaboration.
For example, Burberry, under the leadership of Angela Ahrendts and later Christopher Bailey, leveraged technology to transform its customer experience. The company incorporated digital innovation by merging online and offline experiences, such as live streaming fashion shows and enabling customers to personalise products. Burberry’s leadership drove a digital-first strategy that revolutionised the luxury retail landscape.
And of course there’s John Lewis, renowned for its democratic leadership approach. The company operates as an employee-owned business, encouraging staff involvement in decision-making processes. This unique ownership model empowers employees, encouraging them to contribute ideas and suggestions, fostering a culture of innovation.
The UK market: opportunities and ambitions
Lee Jones considers the Uk market to be something of a cashless powerhouse. He believes that the UK holds immense potential and is a key focus area for Worldline. Their vision extends beyond maintaining their current customer base to venturing into new vertical markets, signalling the company’s ambitious growth trajectory.
“As an organisation, it’s our duty to look after the customers that we’ve got. But also we’ve got ambitions to continue growing… We’ve got clear objectives as to where we want to be over the next few years. For me, it’s about setting the right plan of action and having the right people around to execute on that, because we see the UK as a massive opportunity for further investment and growth.
“So while there are a lot of strong players already in some of the areas that we operate, we believe we’ve got a lot of areas for differentiation and we think choice is a good thing to people.”
Supporting merchants amid economic challenges
Covid and the costs of living crisis has undoubtedly impacted retail businesses far and wide. As well as the pressures this has put on retailers’ bottom line, it has also brought into focus the critical role of pay-tech businesses like Worldline in supporting merchants.
Lee Jones comments: “One of the things that we learnt, even through Covid, was that people rely on us to issue all their revenues. At times, we found that people actually need us to make sure our systems are up, to make sure that people actually get fed, because we have a lot of supermarket customers.
“And there’s an obligation and a duty there. You make sure your systems are reliable, resilient, the processes that you need are in place. You can’t underestimate how important that is to a business like us in terms of your credibility, because people put a lot of trust in us.”
This resonates in particular with Worldline’s customer-centric approach. They rely heavily on customer feedback when it comes to deciding how best to invest in the customer experience:
“I read recently… if a customer has one bad experience with a merchant or a retail brand they’ll abandon that brand potentially forever. So keeping the customers that you’ve got loyal is really important. So you have to invest in the experience you’re giving them across all the different channels.”
Digitalisation and its impact on payments
There is no question that the digitalisation of payments has become increasingly important in shaping the customer experience. The changing payments landscape has made transactions more convenient and accessible for both retailers and customers.
Payment methods such as contactless payments, digital wallets, and online payment platforms are now ubiquitous. Retailers have leveraged this technology to offer seamless and personalised payment experiences, from one-click purchases to tailored recommendations and easy checkout processes. All of which help to foster customer satisfaction and loyalty.
But beyond the payment mechanism, banks and cards, there’s an even greater product that payment systems provide to retailers. That’s customer data.
The fact is that digital payments are generating vast amounts of data. Successful retailers can and are leveraging this data to gain insights into consumer behaviour, preferences, and buying patterns. By drilling down into this data, retailers can gain invaluable insight to help inform targeted marketing strategies, optimise inventory management, and enhance product offerings to align with customer demands.
Worldline has also seen their customers using data in this way, emphasising its significance in fostering agility within organisations. This agility can help retailers identify and capitalise on new opportunities swiftly.
Future trends in payments
Looking toward the future of payments systems, there are still so many potential avenues of expansion in which to better serve the customer. One of these is the growing importance of mobile payments and enhancing customer experiences within retail environments.
Lee Jones comments: “Some of the technology that we’re now very heavily involved in, is where customers will come into a store and they will actually use their own device to pay for things. So coming in with an Android device that allows you to build a basket and then actually do the checkout on your own device itself, in a way that actually sits outside of a normal native app that you might more commonly associate with loyalty applications. I think it’s a huge piece around that and making it a quicker, more seamless, smoother journey for the customer.”
He also stresses the need for continuous innovation and adaptation, foreseeing advancements over the next three to five years in areas like cryptocurrency. He forecasts cryptocurrency as potentially playing a larger role in mainstream payments, such as account-to-account payments, and open banking.
Of course, advancements and innovation in payment systems and processes rely on not just the merchants, but the customers too. We all remember the original proposal to completely phase out cheques by 2018. However, due to public demand, The Payments Council reversed the decision in July 2011, stating that cheques will continue to be used as payment for as long as customers require them.
So too, does the future of payment systems rely on customers and retailers to buy-in to their innovation. Lee Jones cites how Chip and Pin was originally met with some scepticism by UK retailers on its introduction in 2004, but now the contactless market is flourishing, with the ability to pay on a number of different devices from mobile phones to smart watches.
What is clear is that digitalisation has had a transformative power on payments and will continue to revolutionise the way we shop and pay in years to come. The ideal future suggests that technology, customer needs, and business acumen converge to create seamless, efficient, and customer-centric payment ecosystems.