Small coin to big data – changes at the checkout

Digital disruption of retail point of sale is a prelude to bigger changes. How businesses capture and derive value from consumer transaction data, the experience consumers have through whatever channel(s) they prefer, and how stuff gets paid for and processed are all up for grabs.

A recent Wall Street Journal article concerning Amazon’s plans to offer Kindle tablets as a future checkout system for SME’s could well upset more apple-carts than just which point of sale (POS) systems businesses use.

“The game of mobile payments is going to be won or lost at the physical checkout, that’s where nearly all of commerce is done today.” Richard Crone, chief executive of Crone Consulting. Wall St Journal online (29/1/13)

I’m fascinated how customer experience can be enhanced by reducing the time and disjointedness of the transactional aspects of consumer purchases. One under-represented aspect of the rise in popularity of online shopping is convenience/ time-saving. Very few retailers take the approach of consciously designing an ‘ideal’ interaction as one of their key products, and yet it is user experience (UX) engineers who have driven online advances.

Growth of omni-channel retailing means that the key (only?) advantage that SME’s and niche retailers maintain – nimbleness, could be used to good effect in an increasingly data-driven environment. Implementation of smarter and simpler POS systems, combined with considered design of the in-store interaction process means that independents have a fighting chance at remaining competitive. For example, well regarded NZ-based Vend software gets out of the way while providing sophisticated analytics tools, and runs seamlessly cross-platform, whether Mac, PC, or tablet-based.

I have high hopes that independents of all retail persuasions can deliver a compelling brand offer as a seamless experience through whichever channels a consumer prefers. The historically cosy bank intermediary payments/ authorisation element of the equation is the ultimate target of POS disruptors, and it’s getting closer to reality every day. For the incumbent banks I’d be wondering where both my historically juicy intermediary/ authorisation card commission, and all the valuable transactional data will be headed. Probably through someone like Braintree who have been speaking startup language ever since their own beginnings in 2007.

We will still be transacting in the future, but the rate of digitally inspired change at the checkouts is looking decidedly non-linear, and I wonder if banks are ready for the new kids barging into their party?

©David Binstead  2014

Honourable mention to Coin, who have looked at payment from a different angle by storing 8 ‘dumb’ magnetic cards on one ‘smart’ master card. With the recent mass data breach through Target in the States, it seems that they’re going to have to drive forward chip and pin (EMV) compatibility, as the US is finally pushing for implementation of the extra security it offers by 2015.


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