Fintech enthusiasts everywhere are a little jealous of their Seattle colleagues as Amazon Go, Amazon’s first convenience store opens its doors today in the downtown area.
The customer experience titan has introduced an unforeseen level of convenience by replacing the traditional check-out process with…well…nothing. Instead, shoppers simply walk out of the store with their goods and their stored Amazon payment method is charged once they leave. No cashiers. No registers. No need to pull out your credit card.
How does it work?
First, Amazon shoppers enter through a row of gates (think: subway turnstile) and scan their Amazon app on their mobile device. Then, shop away! Customers make their purchase selections as usual. Hundreds of strategically placed cameras throughout the store paired with sophisticated computer vision and machine learning software keeps a watchful eye on your shopping activity. Each item you pick up is automatically added to your virtual shopping cart in your Amazon account. Put an item back, and it’s removed from your account. Amazon sends you a receipt for your purchase once you walk out of the store.
What does this mean for payments processing?
Not a lot, yet. This sort of forward thinking is already top of mind for traditional payments service providers, but much like everything else set to take off in fintech, it really depends on how well customers take to this type of technology. Amazon hasn’t released any plans to implement this at their recently-acquired Whole Foods stores, but there is speculation that they could sell their automated checkout technology to other retailers as part of their cloud computing services.
If we can expect trends in consumer behavior to dictate the future of payments, we can certainly expect small businesses to adapt more in-store contactless solutions over the next few years based on recent research. In 2017, Vantiv asked 500 US shoppers if they’ve used their mobile phone in-store to pay for goods or services (like Apple Pay and Android Pay) within the past three months, and 56% said yes. As quickly as consumers have adopted that payment method (first introduced in 2015), SMEs have adopted digital and mobile methods just as fast. In October 2017, Wells Fargo asked 602 SMEs the types of digital and mobile payment methods they currently accept. 33% accept payments on a mobile Point of Sale (POS), 29% accept online payments, and 12% accept digital wallets like Apple Pay and Android Pay.
Should you adopt new payments technology?
As more options become available, it’s important for SMEs to consider if new payments methods are right for their business. Our Payments Landscape Report research shows customers are more likely to frequent businesses that offer their preferred way to pay and tend to spend more money with these businesses. When considering adding more payments options:
- Ask for customer opinion. This is the best way to gauge if your customers desire a more convenient way to pay you. It may not be worth your while if your customer base is content with traditional payment methods.
- Keep your customers informed. The checkout/payment process is an integral part of the overall payment experience. Customers expect to be able to pay you seamlessly, so any hiccups in the payment process will be highly visible. Be sure to let your new and (especially) existing customers know when a new payments process is coming, what changes they can expect, and how the new method will make paying easier.
- Phase out old methods slowly. Assume it will take your customers a bit to adapt to your new payment options and keep your traditional methods available temporarily. Use any communication touch points you have with your customers to remind them of the upcoming changes in payment methods and where they can go for support.
What do you think of Amazon Go and automated checkout technology? Let us know in the comments below.
