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Using New Payment Technology to Improve Customer Experiences

October 04, 2017

Every retailer and e-commerce system strives to make transactions as smooth and painless as possible. The goal, of course, is to make it easy for shoppers to make a buying decision and initiate a transaction. Many retail purchases are made on impulse, especially online, and the more seamless the transaction process, the greater the number of sales. However, the simpler the payment process, the more complex is the technology behind it. New technology can improve the customer buying experience, but retailers will need solution-provider help in designing a frictionless payment system.

Promoting Frictionless Shopping


Consider trends in e-commerce. Ever since the first online catalog started accepting payments, e-commerce retailers have talked about abandoned shopping carts as a measure of e-tail success or failure. As more shoppers go online using their computers and smartphones, tracking trends in abandoned shopping carts has become even more important, and a large number of those abandoned sales take place at the payment stage.

Internet Retailer reports that a large number of shoppers still walk away from purchases after they have made their buying decision:

  • 46.1 percent of online shoppers walk away at the payment stage.
  • 37.4 percent of abandonment happens at checkout log-in.
  • 35.7 percent walk away when shoppers see shipping costs.
  • 20.9 percent abandon the transaction when they have to enter a billing address.
  • 20 percent abandon the transaction when they have to add a shipping address.

Note that most of these stumbling blocks have to do with the buying process, not price. The more steps that are required in a transaction, the more likely it is that buyers will walk away.

The in-store buying experience is evolving to streamline payments as well. Ninety-four percent of total retail sales are still made in the store, although an increasing number of shoppers are “showrooming” (i.e. checking goods in the store before shopping online). Research also shows that 72 percent of young shoppers research online before buying in the store, and two-thirds of in-store shoppers use their smartphones to check prices before buying in the store. With the lines between in-store and online shopping continuing to blur, more retailers are striving to deliver an omnichannel shopping experience, making it just as easy to buy online as at the cash register.

Streamlining Online Payments


Just as technology is driving the omnichannel shopping experience, it is also streamlining payments. Looking at the statistics cited above, there are a number of ways to streamline the online checkout process. For example, registered accounts with secure log-in keep the customer’s shipping and payment information on file so that he or she doesn’t have to enter it more than once. However, any time a company starts to store payment information and personal data, it is opening itself up to attack. Just ask Target, The Home Depot, or T.J. Maxx.

To simplify online shopping, more vendors are adopting secure third-party payment systems, such as PayPal. Rather than requiring customers to enter their credit card and payment information, they simply opt to pay via PayPal. Payment is almost seamless, and PayPal becomes responsible for secure storage of payment and shipping information, and none of that data actually crosses the network or has to be stored at the e-commerce site.

Although PayPal may be the most popular third-party payment system, there are others such as PaySimple and LightningBuy, to name only two. Most of these services take responsibility for the transaction itself, including securing personal information and credit card or bank account information and completing the transaction with the customers’ bank or credit card. The advantage to customers is that they have a single, secure payment system that lets them control which sources of payment they want to use.

Improving In-Store Purchases


Taking a lesson from successful e-commerce sites, retailers are finding ways to streamline transactions in brick-and-mortar stores as well.

Rather than carrying multiple credit cards, shoppers are increasingly using mobile wallets loaded onto their smartphones. Google Wallet, Apple Pay, Samsung Pay and other mobile wallet apps are making it more convenient for consumers to make purchases at the cash register. Mobile wallets have a “cool factor” and, when used properly for merchandising, can help promote customer loyalty and repeat business. The challenge for merchants is that there are so many mobile wallet apps, it’s hard to know which one(s) to support at checkout.

Many retailers are not waiting for the mobile-wallet battles to play out; they are taking the transactions to the customers instead. Sales associates equipped with tablets are now working the retail floor rather than standing behind the register, engaging with customers to answer questions, checking inventory and handling credit card transactions on the spot. Bringing the cash register to the customer increases customer satisfaction and increases sales; it’s harder to refuse a deal when you can make an immediate purchasing decision.

Smartphones also are becoming an essential tool for both shoppers and merchants. Consumers routinely use their smartphones for comparison shopping while in the store or for taking photos of merchandise to research online later. Merchants are taking advantage of customers using smartphones in the store by setting up proximity merchandising. Shoppers can walk past an item on the shelves and a coupon or offer is immediately transmitted to their phone.

And while all these emerging technologies empower both retailers and consumers, there still needs to be a secure infrastructure to handle transactions. E-commerce sites need secure servers and transaction systems that minimize exposure from malware or hackers. In-store purchases need to be supported with secure wireless networks that can protect over-the-air transactions. Retailers have to start rethinking their network infrastructure to support new payment systems, and they will be relying on solution providers for education, guidance and strategies so that the choices they make today will continue to pay off in the future.