12. April 2018.
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Retailers have been asking themselves and their vendors for some time how to get to omni-channel. “I wouldn’t start from here” is the flippant response. Yet retailers do start here. They start from all different places and plot different routes. We examine the most important practical considerations on the journey to omni-channel.

It is a truth universally acknowledged that a consumer in possession of an internet-enabled device must be in want of an omni-channel experience. And when it comes to this experience, the more frictionless, the better.


Retailers have long been striving for the holy grail of ‘omni-channel’, a term reflecting the blurring between the offline and online worlds. Customers should not be able to see or feel the join as they buy online and collect in-store. Or order in-store for delivery to their home, office, a store or locker. Or buy in-store and order items for delivery later.

The blurring of previously separate channels is only set to continue. According to research firm Forrester, purchases that customers begin using a digital channel but do not complete online will reach €704 billion by 2020, up from €457 billion in 2015. Combined with online sales, these cross-channel sales are expected to reach €947 billion, or 53 percent of total European retail sales by 2020.

One of the main drivers of omni-channel is mobile. 2017 was a year of continued growth in the mobile industry. There were around 7.8 billion mobile connections, representing five billion unique subscribers worldwide, according to mobile industry trade body the GSMA. When the smartphone is the device of choice for accessing the internet — and is the only means a consumer has of getting online in some countries — this cannot but change customer retail journeys and increase mobile-enabled commerce.

M-commerce will account for a greater share of sales, partly due to the number of different ways to pay on a mobile device. These include web- or in-app-based mobile payments, mobile wallet payments enabled by banks, technology companies or retailers, person-to-person mobile transfers, contactless payment via either NFC or QR codes, and carrier billing.


Aside from mobile technology, another main driver of omni-channel is changing customer expectations. “Consumers are willing to purchase at anytime, from any channels, with any payment means. This is driving complexity for retailers since it means supporting new payment means, new payment channels, new technology, and adapting to new ways of doing things,” says Sebastien Slim, head of marketing and innovation, HPS, a global cards and payment technology company.

“Consumers are looking for simplicity. Yet we all know that when something appears simple, it is actually because all the complexity is hidden behind the scenes.”

– Sebastien Slim, HPS

Big tech companies have set the bar high on user experience. Two of the most cited examples have removed the check-out and payment experience altogether. At the end of an Uber journey, the passenger just gets out of the cab. There is no check-out and payment happens in the background. Similarly at the Amazon Go store in Seattle, customers choose the items they want from the shelves. When they have finished, they leave. Amazon charges their online account and sends a receipt.

Too often such experiences are described as ‘frictionless’ and held up to be models. But is this appropriate? Surely designing a user experience involves acknowledging what is being sold, to whom, how and where. Then applying the right level of friction, depending on the particulars of the transaction. It is not always a case of the more frictionless, the better. Nor is it trading security off against convenience, or vice versa. Rather, striking the right balance: fit-for-purpose security, appropriate friction, and acceptance of the payment methods customers most frequently use.


Commerce is borderless in theory. However, in practice there are different tax and import regimes. Payment is a highly fragmented landscape of different domestic debit schemes, alternative payment types and protocols. There is a lot of friction. There is always bureaucracy, history and legacy, even if this is not of a retailer’s own making. No organisation starts with a green field.

Retailers have a few key pain points they are looking to address. “They want to be able to innovate at point of sale, which means being able to support any payment means from any channel,” says Slim. “Many of them do not have a true omni-channel platform. Frequently, they have one platform for face-to-face and one for e-commerce.” As a result, retailers lack insights. They want to better understand customer purchasing behaviour, how their loyal customers behave versus competitors and so on, explains Slim.

Then there is the multiplier effect. The need to support an ever-increasing number of new payment means. The multiple deployments and certifications, particularly when trading across multiple countries. When it comes to the practical reality of omni-channel, back-end capability really drives the front-end interface to customers and staff.

Not all omni-channel offerings are equal. And some are decidedly less equal than others. Trade-offs between providers is also inevitable, as no supplier is strong on every element. When evaluating payment providers, some of the practical factors to consider include:

› Architecture

Architecture is fundamental in that it acts as the foundation to any solution. The right technology architecture helps payment providers think as well as act differently. Legacy systems foster legacy thinking. No organisation can hope to take the future by storm on a mainframe or with mainframe-based thinking.

The ideal underlying systems architecture should be modular, agile and cloud-based. This aids quicker integration and deployment of new changes, plus helps cut project risk and launch times.

› Cloud

Those operating cloud-based systems can scale quickly as volumes increase or with sudden trading spikes or seasonal peaks. This supports day-to-day retail operations, but also retailers’ plans to expand across new channels or geographies.

Point-of-sale suppliers operating cloud-based systems can also deploy terminal upgrades, changes and key injections remotely. This simplifies roll-out, and maintains the consistency, uptime and reliability of the terminal estate.

› Payment methods

Payment habits are strongly national. The growth of e-commerce is driving take-up of local alternative payment methods (APMs). Bank-account funded payments, real-time payments, mobile and other digital payments are actually the default way to pay in many countries, so the term ‘alternative’ seems a misnomer. Retailers must support the preferred payment methods of their target market and sector.

A good payment provider should make integration to new payment methods easy. They should be able to offer advice on best payment bundles by market and sector. Plus be able to turn payment types on and off quickly, depending on customer take-up.

› Reconciliation

No retailer wants to spend their time reconciling payment across different payment types, currencies and settlement dates. Nor do they want to be in a position where back-office inefficiencies and overcoming them dictate the pace of business expansion.

A good payment provider should be able to streamline various payments into one statement and settlement date with one set of rates. They should be able to offer reporting or integrate an API call to give an at-a-glance position on sales.

› Gateway

Not all gateways are created equal. Some providers expose extra data fields in the transaction message to allow a deeper integration at the gateway level. This enables functionality, such as better payment tracking to aid reconciliation.

Some providers are able to offer a single payment gateway combined with a single point-of-sale gateway (for inventory management, loyalty etc.), which may be suitable, depending on individual trading circumstances.

› Data security

Storing, processing and transmitting card data comes with risks. It is difficult to give general advice on how to manage these risks, as it really depends on individual circumstances. This may act as a guide when selecting a partner. Be cautious of any payment provider offering ‘silver bullet’ data security solutions.

A good partner should tailor their advice to the specific set-up of the retailer. On that basis, retailers may be able to evaluate potential suppliers by the nature of their questions as opposed to their suggested solutions. As a general principle, do not spend more to remediate the risk than the cost of the risk itself.

› Tokenisation

Tokenisation replaces sensitive card data with a token, which can be used across various front- and back-end systems instead of the real card data. It is a way to reduce data security liability and PCI DSS scope.

There are any number of vendors who can tokenise card data in the face-to-face environment. And those who can tokenise card data in the online environment. Yet relatively few can offer cross-channel tokenisation. This is significant for omni-channel retailing, so quiz potential partners as to their arrangements for token management across different channels, geographies, payment brands and acquirers.

› Reporting

Retailers can judge a potential payments partner by the quality of their reporting. Sales reports by country, channel, store or even individual terminal level in real-time enables effective performance tracking and

decision making.

Ask what reports are available in the standard reporting suite, how and how often they are available. Not all providers are able to accommodate API calls from customers or use real-time or near-real-time data. Some reports may be available, but at extra cost.

› Agnostic

Any retailer who has been in business for any length of time has a legacy point-of-sale estate. If the terminals are compliant and work, there should be no need to upgrade them. The hardware or applications retailers runs should not matter. Nor should the financial institutions they work with. A good payment provider should be agnostic to terminals, gateways, acquirers and so on.

› Expertise

So much of payments is commoditised. Differentiation often comes with the partner’s knowledge, skills, experience and expertise. Payments is strongly national, so partners who have good local knowledge are valuable. However, they must balance this with good international, sector and technical knowledge.

Choosing the right payment providers is not just about conducting due diligence on the partner’s financials, legals and competence to conduct the contracted services, although this important. Nor is just about agreeing a scope of work, a robust contract and project plan. Choosing the right partners is also about the strategic fit and chemistry between organisations.

Are strategic goals aligned? Are there synergies between leadership teams, governance and cultures? How much time and resource will be dedicated by the partners to communicating effectively and managing the partnership? It is the people and partnership-related factors, rather than the process and procurement-related ones that contribute most to a successful working relationship.


Customers are as different as the businesses that serve them. Not every customer interacts with a retailer in the same way every time or wants to. Retailers must serve a broad customer base across various ages, social demographics and geographies. One size definitely does not fit all. Retailers are increasingly having to cater to a range of different customer needs, so much so omni-customer as well as omni-channel strategies are now a must.

In the same way, retailers are as different as the businesses that serve them. They have different strategies, business objectives and risk appetites. They start their omni-channel journey from all different places and plot different routes. And the starting point is as important, if not more so, than the destination. It is back-end technology that so often shapes the customer experience retailers can offer on the front-end. This is what makes turning omni-channel theory into practice so tricky, and the selection of the right omni-channel partners so important.

Note: Findings from the report The Challenge for Retailers – Building an Open Retail Payment Platform by PCM Research and HPS will be presented at the Retail Business Technology Expo 2018, 2-3 May 2018, Olympia, London.

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