This Week in Payments: Friction-Free Grocers, Disbursement Choice, and Longer BNPL Terms
Nary a day goes by without reports of some new development aimed at removing friction from the consumer shopping journey. This week, for example, grocery chain Aldi deployed its computer vision checkout system at another European location in the Netherlands, in a move that is set to become a budding rivalry with Amazon Go’s “Just Walk Out.”
Tom Davis, partner at Centana Growth Partners, told PYMNTS that the cashierless trend, no matter whose version is in use, is a friction-fighting tech that is here to stay and ready to grow. “I think people are constantly thinking about how to make it easier for people to pay and for payments to be seamless,” Davis said. “And this just seems like the next iteration.”
On the payout side of the coin, there are also changes in the works, such as Bank of America’s rollout of a new solution that lets customers choose how they get paid. Called Recipient Select, the new service removes a different form of friction by allowing companies to streamline business-to-consumer (B2C) payments.
See also: Bank of America 'Recipient Select' Allows Consumer Payments Choice
It’s a development, Davis said, that was being driven by consumer demand, from individuals who have developed entirely new expectations of how they want to pay and be paid – all of which is instant.
“They want to be paid in ACH, they want to be paid in Venmo, they want to be paid in PayPal,” Davis said.
'Everyone Wins'
The explosion of buy now, pay later (BNPL) is never far from the headlines, with new merchants coming online and new providers, such as major credit card companies, getting into the mix with programs that will approve installment funding at existing point-of-sale terminals.
“It’s a fascinating topic to me, because I think everyone wins,” Davis said. “Retailers win because there’s that point-of-sale enablement to actually extend to the consumer and what they can buy, and the consumer wins because it’s a different form of credit than a credit card, and comes with lower rates and allows for a much longer duration.”
That said, Davis noted that potentially rising consumer default rates, evolving funding standards and impending regulation all bode watching.
Another realm where businesses are seeking speed and the efficiency of digital tech to reduce costs is cross-border payments. To that point, EBA CLEARING, SWIFT and The Clearing House (TCH) announced their new Immediate Cross-Border Payments (IXB) partnership.
“The consortium of banks has gotten together and kind of said, 'we need to make it faster, we need to make it cheaper, it’s what people are demanding,'” Davis said. “But I think it’s coming from all that you’re seeing in crypto and the blockchain and some of these innovative companies — and so I think it’s a fantastic thing for the industry.”
Cryptocurrency, too, has been driving innovations in faster payments and the allowance of a better consumer experience. This has led to advances in areas like trading and sports betting that would have been unthinkable a decade ago.
“I think crypto has driven a lot of that generationally, and people understand that having access to something that moves money quickly allows them to trade in markets in a transparent way,” Davis said. “I think that’s perhaps the greatest legacy so far of crypto.”