The future of payments in petrol retailing

By Mark Goldspink | 3 November 2017

Retail experts believe there’s a tremendous opportunity ahead, as the worlds of online and offline commerce begin to converge. “We will see more disruption in the next ten years of retail than we did in the previous one thousand,” said Doug Stephens, founder of Retail Prophets.

I believe this convergence of bricks and clicks will feature several changes, namely:

a) Technology will further its role as the new sales assistant via automation - technology will increasingly automate a lot of routine and mundane work that happens in retail institutions.

b) Analytics will be commonplace in physical stores - by 2020, offline retailers will have the same tools available to them, as their online peers and will employ them widely. Whether it’s using analytics to better position products in the store or tracking shoppers, at device level, to target promotions, data will be used to understand customers and increase sales.

c) Retailers will make better use of sensory technology – by 2020, retail stores will have more awareness of our emotions and will have the tools excite our senses and drive sales.

d) Retailing will finally embrace showrooming, as consumers demand a connected experience - showrooming is the practice of shoppers using retail stores to discover products they’d like to buy, then completing their purchases online, where they can find better deals.

e) Payments and transactions will become totally transparent. The goal to make the payment process as seamless as possible, and invisible to the customer, will come to fruition. Global e-commerce sales hit $1.9 trillion in 2016, with double digit growth forecasted until 2020.

From petrol to payments  

I have worked in and around the petrol retail sector for 30 years, it is one of those businesses that simply gets into your blood. Over the last 17 years, my career has moved into the world of payments and my team and I work with some of the world’s largest merchants and banks.

Despite all the hype and the excitement, I have always believed that petrol will remain the fastest consumer moving good. As a result, not being able to make a payment is essentially an operational disaster. The internet may operate in real time, but if a payment transaction fails while you are sat on your sofa, you simply go to another website.  That doesn’t apply to a petrol purchase.   

Future of payments

I started selling payment solutions to petrol retailers in 1990, with Texaco Card Services, and it is only when you see payment practices in other sectors, that you realise how innovative the petrol retail sector has been. As a result, the industry has a strong track record of innovation, but is it prepared for the future?

I would say that the last 2 years has seen the biggest changes in the retail payments sector. To be honest it is hard to keep up with the plethora of new payment types beyond debit/credit cards and cash. Recent forecasts suggest by 2026, global payments revenue will increase by USD 0.9 trillion as emerging markets continue to grow and cashless transactions become more widespread.

I believe the main reasons for this change are as follows:

a) The investment that has taken place in the financial technology space (fintech). Digital tools, technologies and capabilities are changing the way customers purchase goods and services.

b) New and easier ways to manage point of sales devices

Unlike Doug Stephens, I am not a prophet, but as someone who lives and breathes payment and fraud management every day, I can categorically say that the payment landscape is changing – payment digitisation is here to stay.

Just like the evolution of payment cards, new payment methods are being developed and used in other sectors. Some of these are card based, but others centre on the adoption of mobile payments.

Unlike many articles, this piece is not intended to frighten retailers, but is meant to be a helpful nudge in the right direction and a guide to future proofing retail technology to stay aligned with the wider retail market place. As I mentioned above, I believe payments should become invisible, so you can focus more on managing customers and less time worrying about:

a) Managing and maintaining IT requirements and hardware

b) Changing financial and security regulations

c) Data security

d) Managing fraud and identity.    

e) Complex governance and managing multiple suppliers

What this means for petrol retailers

When selecting a retail automation solution, you need to carefully select an omni-channel payment provider, which gives you and your customers the control you need to make payments invisible. Pay as you go cloud-based services, which are based around well-defined service agreements are imperative. If you are looking to accept new mobile payment types, and you should, it is important to ensure your provider has a state of the art fraud prevention solution.

In order to take advantage of the mobile payment revolution (taking either banks cards or fuel cards) it essential your payment technology provider has a robust fraud solution and can help you navigate through new payment types as they appear in the market place.

Even though, the quest of seamless payments may seem daunting, from what I have described above, the reality is that your chosen provider should be helping you. These elements coupled with well documented functionality roadmaps, will help ensure that your business is future proofed.