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10 Ways the Consumer Payment Experience Has Evolved Most Recently

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Michelle Evans Bio


For years, the bricks-and-mortar shopping experience has centered upon the consumer selecting a tangible good on a shelf and paying a clerk at the front of the store for the item. Over the years, the only part that has really changed about this process was the method of payment that was used to pay for it.  But now the consumer payment experience is in flux as new technologies not only transform how retail and payment players operate, but also the entire shopping experience.

Retailers and payment execs are in the process of redefining this brand new world. New technologies, like smartphones, and overarching trends, such as e-commerce growth, are driving this revolution. Ultimately, these changes will provide for a more immersive, personalized and cohesive brand experience.  In addition, they will offer new ways of capturing, measuring and understanding consumer behavior that until now was just a marketer’s dream. Lastly, there’s the potential for these changes to drastically change the way people physically pay for a good or service. Not only will consumers likely be able to send payment directly to the store from their mobile device, but the payment could happen in an aisle or while the consumer is on the go.

Here’s a look at 10 ways the consumer payment experience has evolved most recently:

  • Mobile phones and tablets are now increasingly replacing the bulky registers often found at the front of merchant outlets. Square is the fast-rising US start-up that popularized the “dongle” concept, which enables a smartphone or tablet to accept card payments. These products have become popular with small businesses and aspiring shop owners that may have found establishing a merchant account through the traditional card networks daunting, if not impossible. Square now has dozens of counterparts both in the US and abroad.
  • Now instead of giving a clerk a cheque, cash or even a plastic card to make the payment, the transaction can be executed entirely through the mobile phone. Consumers can tap an NFC-enabled mobile phone at a POS terminal to transfer the payment wirelessly or flash a QR code for the clerk to scan for the connected payment information. NFC commercial services are present in a number of markets, including the US, the UK, France, Poland and Canada among others. One of the more successful mobile payments systems to date is the QR-code based system from Starbucks Corp. After just two years, Starbucks reports that a fifth of all card transactions are conducted using the mobile app and that the coffeehouse chain processes 2.1 million mobile payment transactions weekly.

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  • Over the last year, PayPal, the e-payment division of eBay Inc, has begun offering an alternative payment method that does not require a wallet or smartphone — let alone one equipped with NFC technology. Consumers can fund purchases from their PayPal account by simply typing in their phone number and PIN at the POS terminal. It also entered into a partnership in August with Discover that would enable merchants on the Discover network to accept this PayPal method of payment.
  • Scan-as-you-go mobile devices are the next logical step after the self-checkout lanes. Scan-as-you-go shoppers literally scan the products as they pick them off of the shelf and then either go to a self-checkout station to upload their bill or hand the device to a cashier to pay. The Netherlands-based Royal Ahold NV has been a pioneer of this technology, dating back to its first trial in 1993. Now its Albert Hejin B.V. brand in its home country and its US brands of Giant and Stop & Shop offer such a handheld option.
  • In this scenario, a consumer scans the goods via a barcode reader on their smartphone instead of a store-issued device. Once the consumer has finished selecting the items, the consumer waves their phone over a receiver at the checkout to pay. The process is similar to the self-checkout process except for when the consumer scans the item. UK-based Sainsbury’s supermarket is trialing a new service called Mobile Scan & Go that allows users to shop with their smartphone in the aisle and then pay for the purchase at the POS terminal. Retail giant Walmart is testing a similar system in more than 200 stores across a dozen US cities.


  • RFID tags, which rely on radio-frequency technology, can be used to track individual items through a supply chain. There’s a lot of promise in terms of what item-level RFID could do to streamline the checkout process. In one scenario, an RFID sensor attached to a grocery cart would automatically detect the items as they were added to the cart. Essentially, shoppers can pay for a variety of products with just a single scan at the POS terminal. Walmart, American Apparel, Macy’s, J.C. Penney, Chico’s FAS Inc and Target in the US, as well UK’s Tesco and Germany’s Metro Group, all have conducted RFID trials or rollouts of item-level RFID tagging.
  • At retailers like Nordstrom, Apple and Home Depot, mobile POS devices are slowly beginning to supplement, and even replace, traditional POS terminals. Employees are being armed with these mobile POS devices to enable them to accept card payments from anywhere in the store. Nordstrom, for example, has deployed more than 6,000 mobile POS devices throughout their 100-plus full-line stores. The devices are a modified iPod Touch with a merchandise scanner and card slider that enables employees to check out consumers anywhere in the store.
  • Retailers have used technology to create virtual stores in highly trafficked areas like malls, airports, movie theatres and bus stops through the use of posters that display available items for sale and the respective QR code. Shoppers scan the QR codes associated with the desired items and then the consumer pays and schedules delivery via the mobile app. Once the order is complete, the retailer delivers the order to the consumer’s doorsteps. The virtual store blends a mobile-based shopping experience into people’s everyday life. UK-based Tesco has used this concept in its home market and also South Korea.


  • Technology is enabling consumers to skip to the front of the line by pre-ordering anything from lunch to movie tickets. The ability to pre-order food via a mobile app and then skip to the front of the line upon pick up at the physical restaurant has become a trend in consumer foodservice. For example, quick-service restaurant chains like Burger King, Five Guys and Chipotle allow consumers to place orders and pay for them using their mobile.
  • Retailers also are using location-based discounts to initiate sales while the consumer is on the go. For example, the location-based social networking site, Foursquare, has signed deals with Visa, MasterCard and American Express. The partnership aims to reward individuals with deals by checking in at a participating location. Users must sync a card to their profile, use it to pay for the purchase and then the discount will appear as a credit on their statement. Foursquare earns a fee from the offers redeemed. The first deal that debuted in February 2013 offered Burger King’s customers a $1 discount to those that had checked in and spent at least US$10 at the fast-food chain.

Evans recently spoke about retailers in the payments space in a presentation entitled Retailers Encroach on the Payments Landscape at Card Forum and Expo. For conference highlights, visit her Twitter profile.

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