The presentation provides perspectives on the evolving merchant payments landscape. Recent years have seen a marked evolution in PoS systems across two major fronts: (1) channels and (2) functions. The presentation explores how merchants can seek to integrate next-generation PoS systems to enhance customer journeys and how payments solution vendors can best capture growth opportunities in the years ahead.
The merchant payments ecosystem consists of various players, including credit issuers, payment aggregators, payment processors, merchant accounts, and network providers, each with different responsibilities to help enable and execute consumer transactions
Merchants implement Point of Sale (“PoS”) systems in store (both physical and online) to accept payments from retail consumers, via various channels
These PoS systems have evolved over time, both in terms of the payment channels (e.g. cash, card, NFC, digital) and function (e.g. payments, sales, merchants, and experience), to enhance the customer journey
However, PoS systems still present various pain points to both consumers as well as merchants, in terms of: (1) customer journey (e.g. sales fragmentation, channel limitations, and customer service); (2) business operations (e.g. system integration, hardware defects, and service cost); and (3) technological systems (e.g. internet connectivity, maintenance & upgrades, and security / fraud risk)
To address these pain points and enhance customer experience, the industry has been exploring next-generation solutions across three directions: (1) feature upgrades (e.g. QR payments); (2) frictionless checkout (e.g. Amazon Go); and (3) Software-as-a-Service (“SaaS”)-based PoS (e.g. smartphone PoS)
In addition to upgrading the PoS system itself, merchants have also been looking to integrate the PoS with their various operational processes, including accounting, inventory management, talent management, customer relationship management (“CRM”), and business analytics
However, merchants need to consider how their PoS systems should be upgraded, taking into account decision factors such as brand positioning, consumer behaviour, existing pain points, implementation complexity, and PoS system scalability
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