Flexibilité numérique dans un monde physique

But this efficiency and flexibility in digital payments has only highlighted the cumbersome and outdated processes associated with physical payments, which still represent a significant portion of transactions today.

The customer journey at the checkout point remains a one-way process, based on unchanged card payments (apart from the addition of contactless) and fragmented due to necessary adaptations and local regulations. Payment devices themselves are constrained by the specifics of local card processors, meaning merchants are tied to these providers and cannot offer the flexibility enjoyed by online customers. The all-analog design and legacy of physical commerce dates back to the last century and is in dire need of an overhaul.

The emergence of “digital native” generations who grew up using Internet technologies is pushing us to review existing systems. Customers expect more flexibility and customer-centric benefit systems, seeing the once static point of sale become a mobile interaction point, allowing them to pay with their preferred payment method, rather than that offered via the terminal.

A good example can be found in mobility environments. What started with paying at the pump with a credit card is now moving towards digital payment methods, such as PayPal or BNPL. The move to electric vehicles will further reinforce this change, forcing retailers to rethink the entire customer experience, as the car becomes the mobile point of interaction.

Retailers need to respond to changing customer behavior. The rise of digital payments and new lifestyles and consumption patterns, accelerated by the pandemic, are making the boundaries between physical and online payments increasingly blurred. They must align their physical payments offering with their e-commerce offering to benefit from a single source of information, regardless of how or where payments were made.

To do this, they must be able to consolidate transaction data regardless of the channels used and the countries, introduce and evolve their partners, and deploy new initiatives and functionalities globally. And this is where the analog nature and silo structure of physical payments becomes their Achilles heel, being very expensive with a significantly reduced speed of innovation. Yet they are not the only ones experiencing difficulties, as payment providers – new entrants and traditional players, as well as Internet service providers and even acquirers as merchant agents – suffer from the same limitations.

Until now, they had no choice but to accept the current situation, largely due to the physical presence of the payment terminal. Changing providers would mean replacing the terminal itself with another, creating an inevitable delay and potential loss of business for merchants, as well as inconvenience for customers.

This is where “orchestration” comes in. Previously only attributed to e-commerce, there is now an alternative available, providing digital flexibility to physical, local commerce. By combining digital design principles and the latest cloud-based technologies with open standards (such as Android or NEXO) and a partnership-based approach, the orchestration platform logically separates the payment terminal from the processing that is done in the background and separates secure card payments from the use of data relating to the value-added services offered.

In short, the platform eliminates the complexity associated with the physical nature of the payment terminal, thereby reducing the friction between the payment terminal and the processor. This provides platform stakeholders the freedom to choose and/or change trading partners and processors without interrupting merchant transactions, and to dynamically route payment flows and data across countries, channels, partners and different endpoints.

By offering such flexibility for physical payment, suppliers will be able to quickly increase their customer base, by accelerating their establishment in other countries for example. For merchants, international expansion will also be greatly facilitated, without depending on a payment provider or a local acquirer operating in isolation. Finally, this will make it possible to adapt new payment methods to the constant evolution requested by customers, in a very flexible and rapid manner.

As the platform addresses an industry challenge, it benefits not only merchants, but all providers across the payments value chain, from traditional acquirers to PSPs, Payfacs and Internet Service Providers. All benefit from more streamlined operations, better processing stability, significant cost reductions, faster time to market, better business insights and access to innovation.

Providing such flexibility around physical payment allows suppliers to quickly increase their customer base, including by exporting to other countries. Merchants, for their part, will find it much easier to expand their business internationally without being dependent on a local payment provider or acquirer operating in silos. This allows them to adapt payment experiences to ever-changing mindsets flexibly and quickly.

The lines between physical and online payments are blurring. It is time for payment service providers to catch up and position themselves to offer flexibility similar to that found in digital payments in the physical world, thereby offering more relevant solutions for merchants and growing their own business in the process.

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