Retailers tend to use certain digital payment providers.
A new survey reveals retailer preferences in areas including digital payment and buy now pay later (BNPL).
According to “The State Of Retail Payments,” a biennial study by the National Retail Federation (NRF) and Forrester that profiles US enterprise retailers’ views and decisions about payments, three digital payment types dominate retailers’ efforts to provide digital/contactless payment options. Online, 64% of respondents offer PayPal, 62% offer Apple Pay, and 37% offer Google Pay. These three solutions also dominate in-store digital payment, in different order: Apple Pay (67%), Google Pay (47%), and PayPal (33%).
The study also reveals relatively low implementation and planned deployment levels of popular buy now, pay later (BNPL) solutions. Online, 23% of respondents offer PayPal BNPL solution and 14% plan to in the next 18 months, followed by Afterpay (20%/6%) and Klarna (20%/4%). In-store, store-branded BNPL or installment financing leads (21%/17%), followed by another third-party BNPL solution, such as FlexPay or Sezzle (16%/6%) and a PayPal BNPL solution (11%/7%).
Existing and planned cryptocurrency deployments are extremely low, both online and in-store. Four percent of respondents accept bitcoin with 2% planning to, followed by other types of cryptocurrency (2%/2%). Responses are similar for in-store implementations of bitcoin (2%/4%) and other cryptocurrencies (2%/2%).
Top challenges respondents have faced related to accepting cryptocurrency include lack of consumer demand/adoption (64%), regulatory uncertainty (59%), exchange rate volatility (42%), and risk and complexity associated with know your customer and money laundering regulations.
The survey also examined retailer attitudes toward and experiences with payment fraud. Findings include:
Two-thirds (65%) of respondent fraud rates remained the same from the year prior. However, fraud was still among the top payment-related challenges according to respondents, with 30% including fraud in their top three biggest challenges this past year. Seventeen percent of respondents lost more than 1% of their online web (card not present [CNP] desktop and mobile web) sales to fraud.
On the other hand, mobile app sales (CNP native mobile app) seemed to be more secure: Only 3% of respondents lost more than 1% of their app sales to fraud.
More than four in 10 respondents (2%) said improving security (fraud, management encryption) was among their organization’s top three priorities. Close to six in 10 (57%) respondents said that requiring PINs improves transaction security, but that’s down from 71% in 2020 and 95% in 2018. Instead, interest is growing in other areas: 43% of respondents said they would implement PIN and 43% would implement biometrics for credit card transactions if banks enabled them (compared to 30% and 22%, respectively, in 2020).
Two-thirds of respondents saw their mobile remote payments volume increase in 2022 as a percentage of their total e-commerce sales since 2021 More than eight in 10 (83%) are either regularly using or in some stage of planning or implementing an optimized payment experience for smartphones. In addition, 55% are at some stage of planning or implementation of an optimized payment experience for tablets and 47% for smartwatches.
Roughly half (51%) of respondents are in some stage of planning or implementation of payment acceptance on chat on their mobile website or app, followed by 44% on SMS/mobile text messaging and 36% on third-party instant messaging platforms.
Roughly one-third (35%) of respondents reported that live chat innovation is something they expect to invest in or plan for in their payment strategies over the next 24 months Thirty-two percent report that they expect to focus on the ability to purchase through social media over the next 24 months. Other innovations related to payment strategies include artificial intelligence (31%) and RFID technology (24%).
Forrester fielded an NRF study, “The State Of Retail Payments 2022,” to 75 retail professionals.