Never leave customers waiting to pay

Innovative methods of payment can drive growth among smaller businesses, as Charles Orton-Jones reports


This summer will see an absurd phenomenon. The sun will shine, the temperature will soar and, at music festivals and World Cup parties, thirsty punters will saunter over to the beer tent where they will stand in line for what feels like hours. You don’t need to have a Harvard MBA to despair at this. Customers are desperate to buy. They are ten feet deep and waving their money at the counter. But no one will take the cash.

Tragically, the same is true at pretty much any store you walk into. Customers want to pay as fast as possible. Instead they need to stand patiently in line.

Online it’s worse. They may have to input an address, credit card number and other extraneous nonsense to check out. A lot of people just abandon their virtual carts.

Fortunately, there is a deluge of new technology to make sure you never lose another customer.

A hot new trend is to use the customer’s smartphone to make the payment in-store. The high street convenience store co-operative Nisa is trialling the new Mini Checkout app produced by Retail Merchandising Services.

The app allows shoppers to scan barcodes using the camera on their smartphone. When they are ready to complete their purchases, the phone generates a final barcode which is read by the store’s scanner on the way out. The app is linked to the customer’s bank account, so the transaction needs no extra input from the customer.

The fee? Compared to credit card fees of 2.5 per cent per transaction, Mini Checkout takes 1.5 per cent. The technology is being targeted at small and medium-sized enterprises (SMEs) that lack the resources to man multiple tills or experience surges in demand creating queues.

A similar technology has been developed for purchasing goods directly from billboards and adverts. PowaTag is a smartphone app which reads QR (quick response) codes placed in adverts. Customers use their phone’s camera to scan the QR code, input a pin and the product being promoted is sent to their address. Bank accounts are linked to the app, so there is no need for the customer to mess around with sort codes or expiry dates.

There is a deluge of new technology to make sure you never lose another customer

Marketers will appreciate knowing precisely which promotions triggered a sale. The entrepreneur behind the technology is irrepressible serial entrepreneur Dan Wagner, who has signed up 365 global brands, including Laura Ashley, adidas and Carrefour.

Later this year PowaTag will be joined by a startup called Magic, launched by London-based Tedipay. Magic uses smartphone scanning to let consumers pay for goods as they shop and will include an option to tie-in loyalty points, which are automatically awarded and deducted during the payment process. The cost to retailers is £20 for the hardware and £5 a month for access to the loyalty component of the software, plus a per-transaction fee.

Upgrading your till is a worthwhile investment. The new generation of tills are based on mobile OS technology. Caffe Vergnano coffee chain recently started using the Android-based Clover Station till, created by a lavishly funded Silicon Valley startup.

The Clover Station looks like an iMac G4 desktop computer with an 11.7-inch touchscreen and comes with an app store, making it easy for merchants to add extras, such as customer loyalty schemes, discount schemes based on customers’ previous purchases, and table management apps for restaurants. The product is targeted at firms which believe iPad or Android tablets are the most desirable option, but still want to be able to swipe cards, take cash, print receipts and need a barcode scanner built in.

International customers are routinely treated as second-class citizens. China is the world’s second largest e-commerce market, yet few British retailers are set up to handle Chinese orders. Samsung, Fossil and C&A use Computop Paygate for global payment processing.

Computop chief executive Ralf Gladis says the trick is to know which methods the Chinese want to use. “The leading payment scheme for e-commerce in China is Alipay which is part of the Alibaba Group who run B2C [business-to-consumer] and C2C [consumer-to-consumer] marketplace Taobao, similar to eBay,” he says.

“With 48 per cent of market share, Alipay is very much comparable to PayPal. It claims to process up to 34 million payment transactions per day. Given that Europe only counts around 320 million inhabitants, the fact that Alipay grew from 550 million to 700 million consumer accounts in 2011 demonstrates the sheer size and growth of e-commerce in China.”

Mr Gladis adds that selling to Europeans needs the same thinking. “The German consumer expects options that include credit card, debit card and PayPal, as well as payment methods such as giropay or immediate transfer,” he says.

“A key success factor in Germany is payment on invoice which comes with high default risks that need to be addressed correctly. The French predominantly use one card, the Carte Bancaire or Carte Bleue, and that option needs to be available if an online retailer wants to sell successfully in France. If you want to do business in The Netherlands, the Dutch often use iDEAL online wire transfer, with the remaining purchases made by credit cards and PayPal, and a small number by Lastschrift.”

With such a plethora of options, it may seem tough for small and medium-sized firms to cover all bases. In fact, experienced payment partners will help even small firms cope with the full gamut. The alternative is to leave willing customers unable to pay or inconvenienced – which, as snaking queues of beer aficionados this summer will testify, is both needless and annoying.