Whether you like the term ‘omni-channel payments’ or not – indeed whether you even think of distinguishing between payments, the channels you offer to your customers and your overall retail proposition – it appears to have stuck, for now.
But what does it mean? I’d prefer not to get into a huge debate about this here, because it all seems to boil down to a personal point of view. For what it’s worth, I’ve refined my own definition to “any electronic payment, anywhere”.
However, I’ve spent the last 18 months looking at all the options in the market, distilling page after page of marketing information and product information down to the point where I’ve reached a conclusion: Omni-channel payments don’t exist.
I didn’t imagine when I started my voyage that I would be searching for Atlantis, but that’s the journey I find myself on – and I haven’t found it yet.
Yes, you can have solutions cross online and in-store . Yes, there are solutions which work in any country. But they all have their failings, and I was surprised at just how obvious some of these are; for example, why would I not be able to get the same token returned when a customer used the same card through different channels? What use is that? Similarly, global acceptance does not mean the same thing as support for Visa and MasterCard… there are other cards out there.
I’ve now reached a point in my journey – a nautical crossroads you might say – where I have to make some decisions. The easy option would be to make a U-turn and forget about having to support and integrate tens of different systems to get what I want. Alternatively, I could continue my search in the vain hope that I have missed the prize somewhere along the way, or simply not stumbled upon the solution provider out there who can give me all I need. Or I can think of a way to build it myself.
Before I decide, I thought I would make a plea: If you have stumbled upon a solution which demonstrably delivers omni-channel payments then please share it with me. If you provide such as solution then don’t be shy. I hate doing U-turns and I’m loath to try and build this myself.
 PayPal integration in store and online is integrated into the BT Expedite & Fresca solution through iStore and Fresca Commerce.
 A token is an alternative reference for a card number as part of a transaction, as provided by a tokenisation solution, used predominantly for online payment processing and recurring payments but increasingly more valuable in all electronic payments for retailers in their endeavour to keep track of customers whilst simplifying their PCI DSS.
By Kevin Burns, Head of Payments & PCI, BT Expedite & Fresca
With many UK retailers struggling to keep their heads above water and others stuck in a seemingly endless sale period, the need to plan and pay for compliance is slipping down the list of priorities.
Now there are also additional pressures as many of the first and some of the second phase Chip and PIN Entry Devices (PEDs) reach end of life.
If PCI DSS is a burden and PED replacement a challenge then combining the two may, on the surface, appear to be a total nonstarter but there may be some merit in taking both challenges head on.
Why, I hear you ask; well not least because not every retail IT team has enough people today to deal with business as usual, so finding two of the team to deal with PCI DSS is a problem before you start.
Then there is the need to continue to keep up to date with the standards and keep on top of the retail estate which is in scope for the PCI DSS.
Defining a cost-effective way to get and retain PCI DSS certification
Over the last couple of years I have been out into the market looking at how to find ways to reduce the PCI DSS burden and over the past six months I have been helping some of our retail customers come to terms with compliance in a number of ways, focussing on cost and ROI as much as ensuring that we find the best solution for their business.
Taking a step back from this process we have some lessons which apply generally to retail and some results which I think will surprise many including:
• Redesigning integration layers to ensure that Point of Sale environments no longer has full Primary Account Number (PAN) stored or used as a key to the transaction / customer.
• The same level of information can be derived truncated card data combined with tokenisation or hash values used
• Working with truncated data instead of using full details will satisfy most reporting requirements and analysis
• Moving to a hosted solution may be more cost effective in the short and the long term
And with the anticipated further clarification on emerging technologies (Point to Point Encryption) due in September you may find my new white paper an opener to the ensuing debate that I am sure many retailers are about to reignite within their businesses over the next three to six months.
We took a dozen senior IT folk from UK retailers with us to NRF. After two days trudging round three aircraft hangars full of technology, here are our joint conclusions below - you can also watch a short video of NRF 2011 Conference highlights:
1. Free Wi-Fi – Most large format outlets have a steel frame which, if you remember your O-level physics, forms a Faraday cage that doesn’t let radio waves in or out. So 3G coverage in retail is very patchy. If retailers want to encourage their customers to use their app in store (see previous post for the rationale), free Wi-Fi makes good business sense. With Wi-Fi, shoppers will always need to pass through the retailer’s landing page which is a terrific opportunity to promote their products. What’s more, the retailer can often get anonymised data about which other sites their customers are visiting. Free Wi-Fi will also be important for 2012 Olympics as foreign visitors hate roaming charges but like Wi-Fi. Burberry already offers it free. Tesco and Food Lion announced at NRF that they were going to. Definitely one for 2011.
2. Cloud Computing – a very confusing area complicated by there being no firm consensus on what it actually is. Long term, big picture, our customers don’t see running data centres as a core activity and welcome discussion about hosting their enterprise applications elsewhere. But, they tell us, the devil is in the detail; notably (1) how to get from where they are to a fully hosted environment without increasing costs in the short term and (2) what manner of integration framework might be appropriate.
Surprisingly, there wasn’t much talk about cloud computing at the show. Pretty much all the application vendors claimed to offer hosted or SaaS delivery models but the big SI’s such as IBM and Wipro were focusing on their software rather than infrastructure-as-a- service.
3. Digital Signage – this has come in leaps and bounds over the past five years. Intel showcased some HD screens of such astonishing quality that even seasoned signage sales people took off their hats. Our customers saw the value of being able to control point of sale messages centrally but still have two major concerns. Firstly, do shoppers really take notice of the signs or do they merge into the background as Tesco’s found with its in-store media network? Secondly, can the digital signage take a simple feed from existing content? No retailer can really afford to have to photograph its products twice, once for the web and a second time for HD 3D screens.
Intel are always good value at NRF. They don’t really have anything to sell so can put their marketing budget into showing cool stuff that they hope will increase the demand for computing generally.
4. Electronic shelf edge labels – No interest from our retailers. None at all.
5. Apple – every stand had an application running on a tablet and three out of four put you in a raffle to win an iPad if you let them scan your delegate badge. While many manufacturers have tablet devices on the market, this show was wall to wall Apple. Our customers explained how they’d spent the last twenty years keeping Mac’s out of their corporate IT but either had been or would shortly be over-ruled by their management. Apple technology is here to stay and technology vendors need to shape up to be able to offer support.
6. Payments – there was a huge amount of innovation around F2F payments ranging from fitting sleeves around iPad’s for card tranasctions to loyalty apps with embedded payment software so that customers can transact on their own devices. The business case, at least for US retailers who are incandescent about the commissions charged for credit cards, is to steer shoppers to the most favourable tender types. For example, the payment screen on your app would highlight store cards or gift cards and put Visa and Mastercard “below the fold”.
7. RFID – here at BT we’ve been big fans since we implemented the automated stock counting system in M&S stores in 2005. We see a strong role for the technology supporting cross-channel retailing as inventory accuracy is becoming of critical importance. There was surprisingly little RFID at NRF; really just Avery Dennison (BT’s partner) showcasing their fashion solution. None of the big application vendors or SI’s mentioned it.
8. Self-check out – the marmite of the retail technology world; some people are evangelical about self check-out while others see it undermining the long standing relationship between a retailer (represented by its staff) and its customers. Undeniably, the machines do tend to be rather ugly although if you can put the transaction on the customers’ phone then self-checkout hardware could be rather smaller. The verdict: we can all see advantage in reducing the queues in fast fashion but still struggle with how you remove the security tags. One to watch for 2011.
9. 3D virtual fitting rooms – Microsoft cancelled their prime stand by the main entrance two days before the conference which was very fortunate for one lucky 3D virtual fitting room vendor. Our small group wasn’t impressed. The garments don’t hang properly so you can’t genuinely see how they would look on you and (yet again) all the clothes would need to be re-photographed for this application. Maybe one for 2013.
Geoffrey Barraclough is BT Expedite’s Strategy, Marketing & Propositions Director