Retail Payments: Consumer Control & Need for Speed
When it comes to payments, times are changing. Fast. Retailers find themselves in an uncertain world: after a few rough years of data breaches, theft, and fraud, retailers are already feeling pretty beat up. But despite a resulting emphasis on data security and privacy, retailers find they have no room to pause while they secure their enterprises as tightly as they would like. Consumers are moving fast, and retailers must keep up.
RSR’s recent benchmark study on the state of payment processing in Retail, entitled “Retail Payments: Consumer Control And The Need For Speed,” reveals that retailers find themselves being driven by both new payment methods and innovations as well as new risks and vulnerabilities. But as a result of escalating risks associated with payments handling, retailers have shifted their focus. In past years, keeping up with customers was the priority, but this year it's all about security and privacy (Figure 1).
Figure 1: Customer Goals Succumb To Hacker Fears
Source: RSR Research, April 2015
There are some differences in priority depending on retailer size and vertical. For example, grocers, slow to sell through digital channels, have something of a sheltered view of payment strategies and their role in their businesses’ future, while fashion retailers see payments, particularly Apple Pay, as a way to differentiate their brand. Retailers who bring in most of their revenue online see even the definition of "security" very differently than their store-based peers (they worry more about fraud through identity theft, rather than exposure to hackers). This shapes both their perceived opportunities and their technology investment plans.
But as RSR’s research has consistently pointed out in other studies, retailers that out-perform their competition – “Retail Winners” – tend to see things differently, and payments strategy is no exception. RSR has found in past benchmarks on customer data security that retailers traditionally put data security and consumer privacy in two separate buckets: security was all about PCI and securing payments, while consumer privacy was much less of a concern. But after the Target data breach, and subsequent phishing attempts using the stolen email addresses, that perspective has changed. Retail Winners are now giving consumer privacy equal weight with security (Figure 2).
Figure 2: Heavy Weights
Source: RSR Research, April 2015
This shouldn't be a surprise. RSR consistently finds that Retail Winners are more focused on the customer experience in general and on making sure they deliver what customers want. But when it comes to payment strategies, this manifests in a point of view around payments that is fundamentally different from their peers. Across the board, Retail Winners place more emphasis on multiple factors that drive their payments strategy – this highlights the overall importance they give to the subject.
To read RSR’s recent benchmark study, Retail Payments: Consumer Control And The Need For Speed, click here.