Beyond fraud, why EMV is a good thing
The Oct. 1 EMV deadline has come and gone, but for some merchants, the technical headache still remains, and continues to interfere with fourth quarter planning.
While some retailers have proactively met the challenge and are already EMV-enabled, (and to them, kudos!), data shows that by the end of 2015, only half of U.S. retailers will have made the change.
If you have yet to uproot your point-of-sale infrastructure, there’s good news. The change to EMV is about much more than fraud protection – it provides the chance to take a step back and think about the experiences you want to deliver to your customers over the next five years. Will these experiences be purely at the point of sale, or will they be anywhere in your store, and beyond?
Truth is, as we all know, sales don’t just happen at the POS system on the countertop anymore. They occur at home, on a park bench or bus, and in-store, but not necessarily at the POS terminal. In order to truly understand customers, and capitalize on that knowledge, it’s imperative to connect the dots between all of the factors that influence their purchases.
This shift to EMV can take on new meaning – providing a tremendous opportunity for merchants to lay a proper foundation for their business and connect their POS with online and mobile shopping experiences; thus, creating new experiences that surprise and delight customers. A seemingly painful EMV upgrade can actually serve as an advantage – offering the opportunity for retailers to think about POS as one piece of a larger puzzle of consumer touch points, and enabling them to pull together a broader omnichannel strategy that benefits customers and the business.
Understanding customers may sound simple for retailers, and while retailers have made significant leaps here, there is still a long way to go. Often times disconnects occur when retailers use different payment systems for each channel – a separate system for POS, mobile, and online – with none of the systems connecting with each other. Data needs to flow smoothly between all channels, and due to outdated technology, this simply does not occur in most instances today.
In a true omnichannel world, retailers would have a single solution that powers payments across a variety of touch points and provides comprehensive data on who their shopper is. Having this 360-degree view of their customers means retailers can provide shopping experiences of the future, including:
Rewarding loyalty without the loyalty program. In today’s world, why do consumers have to punch in their loyalty numbers, whether it be online or in-store? Tracking what, how much, and how often customers are buying across all channels via one underlying payments system means that retailers can reward consumers with cash back after, say 10 purchases – without a loyalty card.
Infinite aisles. What if a customer is shopping in your store and likes a specific dress, but is unable to find it in her size? With infinite aisle capabilities, you can have a tablet in the aisle for her to punch in her size and immediately order online. A system that’s already powering your e-commerce site means that you know her shipping address and preferred payment method – so it’s a cinch for her to complete the purchase on the spot.
Personalized experiences. Imagine if a customer comes into a store on a Monday and purchases a shirt. You can track this purchase and make a suggestion to purchase a matching item the next time that customer visits the company’s website – or vice versa.
Closing the loop on advertising spend. Omnichannel payment methods, like Apple Pay and Android Pay, can connect advertisements to purchases – shedding light on the return of on investment. For instance, customers can search for a coupon online for their favorite store, save it to their e-wallet, and then automatically redeem it once they are in the store.
Buying online, returning in stores. These days, shoppers don’t want to distinguish between channels, so why should you? By having the same system processing both online and in-store transactions, you can easily arrange for cross-channel purchases and returns.
So, what does all of this have to do with EMV and the recently passed deadline? Retailers’ first instinct may be to swap out their terminals ASAP because of the Oct. 1 cutoff, and of course, it’s a great idea to jump on the bandwagon and implement EMV-enabled hardware sooner rather than later. After all, no one wants to be held liable for card-present transactions if it can be avoided. But even more importantly, this shift offers a fantastic opportunity for retailers to weave the required EMV change into a larger-scale strategic move.
Data shows that retailers change out their hardware every five years, so by upgrading today, most retailers will be using the same infrastructure until 2020. Locking a business into a disconnected experience for five years – especially as more and more retailers are thinking about the benefits of omnichannel experiences – is hardly advantageous to the business, or to customers. After all, is it better to implement now and patch things along the way, or get it right from the start?
The positive note in all of this is that implementing an omnichannel strategy doesn’t have to take years and years. Technology these days allow online, mobile and in-store integration to happen within a few short months, if not weeks.
In the end, this EMV migration isn’t solely about fraud mitigation or a single piece of hardware. EMV is really about thinking beyond the obvious and refusing to limit oneself – looking to the future and being prepared for the next generation of payments, wherever people pay.