Global Briefing

Retailers Encroach on the Payment Landscape

| Pages: 57

Price: US$1,200

About this Report

The role of the retailer in the payments ecosystem is evolving quickly, due to an ever-changing payment landscape, as well as the rise of new technology that can be used to enable payments, and macro trends in retailing such as the expansion of modern retail formats and growth in e-commerce.

Several drivers leading to retailers moving further into consumer finance

The state of the card market and the ever-changing payment landscape, as well as outside factors like the advancement of technology, are providing opportunities for retailers to move beyond their core product offerings.

Retailers taking advantage of technology advances to conduct payments

Retailers are taking advantage of the enormous ability of new technology like smartphones and tablets to connect to the consumer both before, during and after the sale.

Changing role of the retailer in a mobile-dominated world

While the in-store retail process has remained largely unchanged for years, retailers, consumers and payment executives now find themselves in a brand new world thanks to the rapid proliferation of new technologies, such as the smartphone, tablet, NFC chips, QR codes and cloud computing.

Consumer payment experience has evolved

Besides the impact on the consumer-merchant relationship, mobile devices – and technology, in general – have been the catalyst for an entire revolution in the consumer payment experience. Consumers can now use these devices to initiate payment at the POS terminal, in the aisle or while on the go.

Strategies of retailers operating in consumer finance differ

Besides selling core products, retailers may also offer financial service products of their own, or by partnering with financial services providers to do so. In addition, retailers have developed their own propriety mobile payment systems and card products that circumvent the traditional card infrastructure.

Table of Contents



Key findings

Drivers Leading to Retailers Moving Further into Payments


Drivers leading to retailers becoming more entrenched in payments

Spread of modern retailing already boosting card payments globally

Growth of modern retailing making card usage more prevalent

Internet retailing becoming an ideal channel for card payments

Rapid expansion of internet retailing bodes well for card payments

Retailers are taking advantage of technologies to conduct payment

A look at the changing landscape of mobile-enabled devices

Two categories of mobile payments: Proximity vs remote payments

NFC-driven mobile payments slowly gaining momentum

Fractured payment industry provides opportunities for retailers

The Evolving Payment Experience


US retailers have been in the cards space since the beginning

The evolving role of the retailer in the new mobile-dominated world

New technology is enriching the merchant-consumer relationship

Mobile will dictate new store sales and drive digital couponing

Case study: Mobile could spell the end of traditional cash register

Mobile phones and tablets now replacing bulky cash registers

Phone interacts directly with POS terminal to execute the payment

PayPal enables consumers to make payment with phone number

Item-level RFID tagging could lead to a faster checkout experience

Case study: Mobile devices changing the experience in the aisle

Shoppers check out in the aisle via store-provided handheld device

Mobile apps make it possible for consumers to scan as they shop

Employees now being armed with mobile POS devices in aisles

Case study: Mobile devices changing the on-the-go experience

QR-code activated virtual stores in high-traffic urbanised areas

Technology enabling consumers to skip the line via pre-ordering

Merchants also use location-based discounts to drive purchases

Strategies Used by Retailers in the Financial Services Space


Some of the strategies taken by retailers in consumer finance

Case study: Retailers morph into consumer finance providers

New grocery list includes milk, bread and financial products

Retailer launches bank to offer insurance, credit cards and loans

UK supermarkets become more entrenched in consumer finance

Case study: Retailers use close relationship to target unbanked

The retailers-turned-bankers trend most prevalent in Latin America

Brazilian retailers first to offer services to low income consumers

Mexico’s retail outlets become popular bank channel for unbanked

Case study: US retailers join together to create mobile wallet

More than 30 big-name American retailers are involved in platform

Merchant-led network about cutting costs, retaining consumer data

Retailer-led mobile platform could reduce card processing fees

Case study: Retailers like Target offering cards with direct debit

Target offers its cardholders 5% everyday discount, free shipping

Target’s REDcards allow it to manage loyalty and drives sales

Pluses and minuses of store-issued card products

Prospects for Retailers in Payments


How retailers could disrupt the long-standing payment structure

Benefits and potential conflicts for retailers and payment providers

The prospects of retailers in the traditional financial services space

Report Definitions

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