The pandemic brought major changes to c-store retailers, especially when it came to the checkout experience.
“The most notable payment change resulting from the COVID-19 pandemic has been a much more rapid deployment of contactless payments than was expect- ed prior to the pandemic,” said Perry Kramer, managing partner, Retail Consulting Partners. “Contactless payments include two major categories — contactless credit cards and mobile wallets stored in consumers’ phones or other personal devices.”
The big driver toward contactless payments for c- stores has been a “dramatic focus on safety” during the pandemic, Kramer pointed out.
On the EMV front, retailers were also working to meet the now-passed April 2021 deadline for EMV compliance at the pump ahead of the liability shift. “The contactless EMV transaction is a win-win for retailers and consumers,” Kramer said. “When implemented correctly, the customer does not need to sign anything (paper or the terminal). This can cut the payment process time in half, be perceived as being safer and reduce chargebacks.”
Retail Consulting Partners’ “2021 POS & Customer Engagement Report” found 78% of retailers have implemented the hardware and software to enable EMV transactions. The survey further found that contactless payments are becoming an expectation of consum- ers. Contactless payments accounted for less than 2% of transactions in 2018 and have grown to almost 80% today in segments such as grocery and drugstores.
“This can be seen in the New York City metro system, which reported over 1 million transactions in the first 69 days that it enabled contactless payments in a small sub- set of pilot locations,” Kramer said.
Pittsburgh-based GetGo Café+Market is seeing cus- tomer demand for contactless payments at its c-stores. “Customers want to get in and out of our GetGo locations fast and are increasingly more open-minded about self-checkout and mobile app checkout experiences,” said Rug Phatak, chief of staff and senior director of marketing for GetGo, which operates more than 260 locations in Pennsylvania, Ohio, West Virginia, Maryland and Indiana. “The pandemic and the desire to reduce touches and face-to-face interactions have accelerated those trends.”
GetGo recently added new Invenco G6 and G7 Pay-at-Pump terminals, iNFX retail microservices and cloud services management platform at all existing locations to address outdoor EMV, while also offering a more robust media experience at the pump.
“EMV compliance with the liability shifting to us as the retailer was certainly an important consideration, but more important was providing customers with even more security for their transactions,” Phatak said. “What we liked about the Invenco solution was that it not only provided EMV compliance, but also enabled us to display dynamic and rich video content vs. static signage and opens the door for future innovation and integration with other payments and programs.”
The new touchscreens support future integration of touchless payment for contactless payments — like Apple Pay, mobile wallet credit cards and Google Pay at the pumps — which is expected to be added later this summer. “This technology is already enabled inside the store and is becoming increasingly popular as customers reduce touches and rely more on their smartphones and smartwatches to act as virtual wallets,” Phatak said. “AdvantagePay is another form of payment customers can already use at the pump; by securely linking their checking account to our Advantage Card loyalty card, customers can unlock an additional fuel discount of five to 30 cents per gallon on every fill-up, every day.”
GetGo is also taking contactless a step further, piloting Grabango autonomous checkout technology at one of its Pittsburgh-area locations.
“Grabango technology and cameras monitor what customers pick up and put down to maintain an active virtual basket,” Phatak explained. “When a customer is ready to check out, they scan the code in the Grabango app, payment is processed in a matter of seconds, and customers can skip the line and walk out the door.”
Customers can also link to their Advantage Card in the Grabango app to take advantage of various promotions. “Amazon Go and the pandemic have accelerated inno- vation around alternative payment and checkout solutions. With Grabango, we were able to pilot and retrofit an existing store vs. building a store around the technology,” Phatak said. “Allowing customers to skip the line and check out themselves saves them time and also helps us redeploy that cashier labor to other value-added tasks around the store: cleaning, sanitizing, stocking and assisting in Café+Market MTO kitchens.”
GetGo is currently exploring the possibility of expanding the pilot.
Saving customers time, reducing touches and reallocating labor as needed make payment innovation a valuable consideration for retailers, Phatak noted. “All these technologies integrate with our current point-of-sale system and allow us to leverage our best-in-class fuelperks+ loyalty program.”
Another significant trend for retailers to watch is growing competitiveness in the payment processor industry. “Many of the traditional processors have been forced to improve their service and adjust their fees to react to newcomers like Aurus and PayPal, who have very competitive offerings built on new technologies,” Kramer said. “They can offer more competitive pricing because they are not supporting many of the legacy systems that the longtime players have.”
What’s more, many retailers are coming up to the life span of their payment terminal hardware, making it likely these retailers will be reevaluating their existing payment vendors in the next few years.
Indeed, Retail Consulting Partners’ “2021 POS & Custom- er Engagement Report” found 41% of retailers indicated that their payment terminal hardware was more than five years old. “These terminals traditionally have a life expectancy of six to seven years,” Kramer noted. “The survey supports this as it also shows that 48% of retailers anticipate replacing their payment terminals in the next three years.”
Surprisingly, a former burning-issue topic — payment security — dropped down the chart in terms of its importance to retailers responding to the survey. Only 15% of retailers responding to the survey ranked this as one of their top three priorities, Kramer pointed out.
“I would suggest that the maturity of the payment- processing solutions in the market have provided retailers with a significant level of comfort around payment security,” he said. “COVID has forced retailers/c-stores to focus attention on more flexible order fulfillment, including digital integration, which was also another big reason payment (security) took a bit of a dip.”