Helping customers make touchless shopping a reality in their stores:
1. Using existing self-checkout software capabilities to keep users from touching screens and terminals. Examples include:
- Encouraging shoppers to scan the first item to start the transaction instead of touching the ‘start’ button to begin
- Recommending they insert cash into the self-checkouts note and coin slots instead of touching the ‘pay’ button and then the ‘cash’ button to make a cash payment
- Reconfiguring the self-checkout software to allow electronic payment entry to start when a shopper inserts their debit or credit card into the payment terminal, rather than touching the “credit card” payment button on the self-checkout screen.
2. Emphasizing mobile wallets and mobile payments. This can include the retailer’s mobile payment solution or NFC-based payment options like Apple Pay, Google Pay or WeChat Pay, configured for self-checkout.
3. Recommending attendants use barcodes to clear and approve interventions in the self-checkout lane so they don’t have to touch the screens. Use NCR FastLane Remote Attendant Program (otherwise known as RAP) technology to enable attendant remote approval of self-checkout interventions, where applicable.
Finding the next normal
As the crisis plays out, we will get more clarity about the depth and duration of the pain. One thing is clear now: there will be no return to the norms of 2019; the impact on the behaviour and expectations of customers and businesses—indeed the entire fabric of the economy—will be profound. So it is critical not only for the payments ecosystem but also for the economy as a whole to develop, today, the payments solutions that will allow economies to emerge from the current crisis efficiently and define the post-COVID-19 future.
Here we highlight ten fundamental changes that require us all to be prepared. These are not only things we believe the industry should predict or anticipate but also things that we should all ensure will happen for the effective and lasting relaunch of our economies.
- Rationalize cash. Physical means of payments, such as cash and checks, have been actively discouraged through the crisis for their potential of carrying the virus. Banks have closed branches for security reasons, and clients and staffs have readjusted to changed interaction models, either over the phone or by appointment only. Some branches will never open again. Now is the time to promote and design digitization programs for commerce and the economy.
- Ensure universal access. The current crisis is highlighting the fact that not everyone has the same level of access to the necessary new technologies and digital tools. Moving away from cash affects unbanked citizens disproportionately. Merchants without access to digital payments lose out more as remote buying increases. Now is the time to design setups where all merchants and all consumers, irrespective of finances and education, will have access to the tools of the future. Limits in the payments infrastructure or prices should not be used as an excuse.
- Stabilize digital currencies. With values collapsing and trust eroding, digital currencies have proved incapable of delivering on their promise of a universal payments solution in a time of need. The crisis is reinforcing the importance of governments in maintaining the global financial system. Consider, for example, the momentous currency swap lines of credit made available by the US Federal Reserve to global central banks.
- Make the leap to omnichannel payments solutions to support omnichannel commerce. The growth of online commerce has accelerated and will continue to do so, especially as markets, such as those in Southern Europe, close the gap with more advanced Northern European or Anglo-Saxon economies and China. Some smaller retailers forced to close in the crisis may not reopen physically but seek a digital future instead. The rapid build-out of omnichannel capabilities—which will bridge payments in any environment, physical or digital—will become an essential requirement for all payments players in most geographies.
- Make all payments touchless. The fear of contact with contaminated surfaces has given a real boost to the use of contactless payments, card and wallet based. Cashiers are being trained not to take cards from customers and to promote the insertion of cards into readers by customers. The educational impact of, say, local shopkeepers who actively encourage customers to use contactless payments and refuse to take cash will convert some of the more reluctant users. As this habit becomes further engrained, it will become the key to removing barriers to further growth.
- Expand digital-wallet solutions beyond payments. Payments using digital devices—phones or wearables—had already started to emerge before COVID-19 struck. Enabling wallets to offer other features, such as digital IDs and transaction monitoring and reporting, will promote even more growth. Your phone could tell you when it is too crowded to go shopping or alert you when your goods are ready to pick up when you arrive. Such capabilities will make a difference to the reopening of some stores. Companies that provide viable options for integrated and contactless payments, to both customers and merchants, will probably have a distinctive edge over competitors.
- Deploy data as protection against fraud. The COVID-19 crisis has opened new avenues to use data. In China, phone data were used to help people understand “safe corridors” for movement and to track contagion cases rapidly. Even in Europe, consumers are more open to the use of data for their own benefit. The protections against fraud that can be developed should benefit users, not providers, in the weeks when activity resumes. Benefits delivered then will carry the mindset to change forward. Fraud prevention is likely, more than ever, to be the priority here.
- Promote a new era of cooperative competition. The universal disruption of our societies is triggering a new wave of innovation, with a cooperative mindset not common in past crises. The liquidity and profitability crunch provoked by the crisis will lead to a shakeout in the fintech industry, eliminating initiatives that lack clear long-term economic viability. We believe this development will lead to a new fintech landscape, geared more to marketwide cooperation and win-wins and less to challenge the incumbents. Given the change in valuations and market expectations, market consolidation and the development of local and regional champions may continue. In that context, companies will also be reviewing their prospects for growth, as well as considering partnership models and organic and M&A growth, to support their strategies.
- Transform bank-payments operating models. Banks will also have to readjust to the new normal. Payments today are a major cost burden for many banks, and most spending maintains existing systems instead of creating change. In the postcrisis world, banks will need to reflect on how to organize themselves for change, possibly by running some of their payments businesses in a completely different way. They could, for example, consider structural moves on the use of onshoring versus outsourcing, cloud-based infrastructure, automation, and analysis-driven decisions to reimagine scale or the realignment of products. Payments-as-a-service business models, in their infancy before the crisis, are likely to get a boost, particularly where they can provide relief for reduced IT budgets.
- Redesign the regulatory model. In a time of change, we must move to setups that solve real-world problems—guaranteed by regulators but not imposed. This will require a new model of collaboration between the payments sector and regulators—a model focused on innovation in payments, adapted to the new economic reality in a sustainable and resilient fashion. Early indications are hopeful: for example, the US Federal Reserve, the FDIC, and the OCC announced, on March 27, that they will allow companies to delay the adoption of current-expected-credit-loss (CECL) standards on regulatory capital for two years. This will support lending activity in the wake of COVID-19 while maintaining the quality of regulatory capital.10
Managing the immediate threat to people’s health and well-being is currently the highest priority, so not all these reforms can be achieved immediately. But we do believe it is imperative to balance short-term crisis management today with thinking ahead to the restart of the economy and preparing for the new normal. Keeping one eye on the road ahead could allow us to exit the crisis with a more customer-focused, efficient, and resilient payments industry.
– McKinsey How payments can adjust to the coronavirus pandemic—and help the world adapt