It may seem hard to believe now but just two decades ago most Irish retailers didn’t accept debit cards: it was cash, cheque or credit card. You couldn’t write a cheque for more than €127 (£100) and if you wanted to pay by credit card it was done using carbon paper and a device which looked more suited to measuring shoe sizes.
The idea of paying for your shopping simply by holding your phone to a device at the till would have been unimaginable. But with the launch of Apple Pay on March 7th and Android Pay at the end of last year hundreds of thousands of Irish people are able to do just that.
Add to that the ability to simply tap a credit or debit card on a reader or even to pay for goods and services using a social media account and parting customers from their money has never been easier for retailers.
Pay by mobile
The big change here is consumer acceptance of contactless payments, says Eric Hogan, country manager with Elavon. “Tap and go is really taking off as consumers get used to paying for their coffee and newspapers by tapping their card on a reader – Apple Pay and Android Pay are, in effect, payment cards in a mobile phone or wallet. The statistics we have show that more than two million contactless payments are being made every week and the number is growing.”
Three Ireland's two million customers have been able to avail of mobile payments services for quite some time. The company's Three Money product is effectively a prepaid credit or debit card rather like the Perfectcard MasterCard product.
“People can use it is a physical or virtual card,” says Three’s head of products, services and logistics, Mark Gardiner. “It’s very useful for people who are not that keen on banks but still need a credit card for things like online shopping. It’s also very useful for saving – the phone app that comes with it allows users to put their money in different buckets such as holiday or Christmas savings. The amounts in those mini-wallets don’t show up in their available balance total.”
Users of the physical card are in the minority, with 72 per cent of all transactions taking place online. Another noteworthy statistic is that 10 per cent of transactions are contactless, with cardholders using their smartphones as the payment device.
The advantages of mobile and contactless payments for retailers are significant. "Contactless brings us closer to frictionless payments, which is the holy grail for the payments industry," Hogan says. "We are constantly looking for ways to make it as simple and easy as possible for retailers to accept payments. Google has some of the best minds of their generation working on this and we have had contactless payment capability on all of our terminals for the past three years. The same near field communications is used for mobile payments."
Security
Security is another advantage, says Hogan. “Ireland is a high cash usage society, but this is changing with contactless payments. For retailers, contactless means that there is much less cash on the premises, with obvious security benefits. They get the funds into their bank account on the same day or the next day and this also fixes a problem in terms of having to make cash lodgements. That’s really important.”
This payments revolution is by no means restricted to major retailers or even those with physical premises. Advances in technology along with the development of new services mean that even weekend market stallholders can set themselves up to receive electronic payments.
Irish banks already offer the facility for customers to send payments to another individual’s mobile phone number. All you need is a mobile phone number to receive online payments.
And things will get even better for retailers as soon as social media services like Facebook payments become available on this side of the Atlantic. Facebook users in the US can use the messenger app to send payments to friends or retailers. All they have to do is attach a debit or credit card to their Facebook account. Both Stripe and PayPal allow users to accept messenger payments so it's simple and cheap.
Mobility and flexibility are also important for more traditional retailers such as restaurants of fashion outlets. Both have quite dramatic swings in terms of trade. A café can be almost empty all morning but full to capacity with long queues forming at breakfast and lunch times. Similarly, a fashion shop may be exceptionally busy at weekends or in the evenings but fairly quiet the rest of the time.
Using the Talech system from Elavon, such retailers can open and close new tills around the premises to meet customer demand trends, cutting out queues and maximising sales.
“It effectively turns your iPad into a point-of-sale device,” says Hogan. “It works particularly well in restaurants where it can be preloaded with menus and the table layout and so on.”
Avoiding bill shock
Another service offered by Elavon to retailers is a multi-currency billing option. The Dynamic Currency Conversion (DCC) allows customers to opt to pay their bills in their home currency at the point of sale.
“We offer a fixed rate on the day so customers know what they are paying in their home currency,” says Hogan. “There is no bill shock later when people find the amount on their credit card bill is higher than expected. This is very useful for the hotel trade here in Ireland, for example.”
Taking this one step further is Fexco’s Multi-Currency Pricing (MCP) service. This is a currency localisation service for e-commerce sites that allows customers to shop in any one of 101 currencies from start to finish on a site without having to wait until the end of the process to find out what the purchase might cost them in their home currency.
“The ecommerce market is worth $2.8 trillion and growing,” says Fexco head of European operations Alan Graham. “Our research has shown that eight out of 10 customers want to shop in their home currency and this service enables them to do that without fear of bill shock later.
“We also take the risk out of it for the merchants. We manage the whole transaction in the background from the moment the purchase is made right through to the payment into the merchant’s account. We also guarantee the exchange rate to the merchant and this allows them to offer psychologically attractive price points in multiple currencies in the knowledge that their exchange risk is being managed.”
Every little helps
Tesco customers in the UK can now use a dedicated app to pay for their shopping with their mobile phones. The PayQwiq app is a fast and secure payment service that speeds up the checkout process. All a customer has to do is download the app from the App Store or Google Play and add a payment card to get going.
They scan their purchases at the checkout in the normal way. When it comes to payment, they open the app which generates a barcode to be scanned to complete the transaction. This opens up mobile payments to all Tesco shoppers in the UK without having to worry about whether or not their bank supports Apple Pay or Android Pay.
The service is free to use and supports Visa, Visa Debit, Visa Electron, MasterCard, MasterCard Debit, Maestro and American Express. There is no minimum spend with the PayQwiq all and the maximum transaction allowed at present is £250.