Q&A: PayPal on the Future of Payments

1. May 2018.

Essential Retail speaks to Rob Harper, director of mobile commerce at PayPal UK.

How are consumer habits changing in the way they pay for goods?

Consumers buying habits are continually changing, but one thing is constant: people are always thinking about convenience, speed and security as key factors when paying for goods and services. This tech-savvy, convenience-focused consumer is shaping the retail landscape, based on his or her own preferences and behaviours.

In fact, whether it is the phone alarm waking you in the morning or that last minute Whatsapp to a friend before you go to bed, the smartphone is central to most people’s lives. Research we’ve carried out shows that nearly 60% of ‘millennials’ are browsing for new purchases on their smartphone every day*. In fact, 30% of Brits expect to use their smartphones to shop more often in the next 12 months, rising to 44% for 18 to 25-year olds.

At the same time, consumers are shopping across multiple devices, across multiple channels and they are looking for frictionless ways to pay when they get to the moment they want to complete a purchase. The evolution of payments has to keep pace with the evolution of shopping, and in many cases this means moving away from cash and focusing more on digital payments, in-store, on-line and mobile.

What is the future looking like for retail payments?

Firstly, not only has the blurring of the lines happened between online and offline shopping but the lines are now blurring between search, shopping and payments. All payments, not just retail should be a frictionless experience. Payments should just happen.

This leads us to mobile payments – the fastest growing part of our business. The smartphone is becoming more and more central in our lives and yet we still see many businesses have not capitalised on this revolution. We hope to see more businesses grasp the mobile opportunity, and adopt the many innovations that are already available.

There is then the coming together of bricks-and-mortar shops with digital retail; there is an opportunity for a retailer to expand its inventory in-store by enabling online purchases at the point of sale. If a customer cannot find the size or colour of item they are looking for in-store, in many cases the sale need not be lost but an online purchase taken in-store instead with the offer of click and collect or delivery to a home address.

Through working with businesses in this way, we have seen a transformation at the physical point of sale. Businesses are abandoning the traditional, cumbersome till set-up, in favour of tablet computers and handheld card readers that let staff roam and make a sale on the spot. Our PayPal Here card reader and app has completely transformed some businesses: allowing those that used to rely on cash to start taking card payments; and allowing larger retailers to reduce customer queues in-store.

Another significant innovation that will become more mainstream is contextual commerce. This evolution of mobile shopping will reduce the consumer shopping journey even further. Businesses will be able to make a sale at the point of discovery – whether that is in an email, on a Pinterest page or in a messenger app – rather than needing consumers to click through to an online shop or switch between apps.

We will be happy to hear your thoughts

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