Payments: Redefining 'The Moment Of Truth'

By Brian Kilcourse, RSR Research

For retailers, the "moment of truth" comes at that exact second in time when the customer gives the clerk money in exchange for merchandise. Retailers know that tendering the transaction is the last impression that the customer has of the shopping experience, and a poorly handled ring-out can undo all the goodwill created with beautiful displays and friendly staff. For this reason, retailers' payment processing capabilities tend to be the most reliable, albeit inflexible, systems in the application portfolio. But, retail payment systems are undergoing a revolution. Alternative forms of payment are emerging, offering new flexibility to consumers both inside the store and in new shopping channels and causing a shift from cash and checks as the primary tender in favor of credit and debit, stored value and gift cards, and even innovative payment structures like PayPal and eBillMe. This revolution is driven by consumers' increasingly omnichannel shopping behaviors — when a customer uses more than one "channel" to complete a single transaction. For example, a customer may investigate a product on the Web, select a product using a "smart" mobile app while they're out shopping, go to the store to pick up the product based on promised availability — and increasingly, use their mobile phone to trigger a debit or credit payment at the POS, perhaps even claiming a digital coupon as a loyalty reward.