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Convenience: Bad for Payments, Good for Loyalty

A recent study from WorldPay covering the payment trends and habits of UK Consumers (Optimising your OmniPayments) not only highlights the adverse perception of ‘very convenient’ payment methods amongst many consumers, but also highlights recent ‘hyper-convenient’ payment innovations that are positively perceived amongst consumers.

What’s interesting here is that whilst many consumers exhibited a distrust of payment methods that are ‘too convenient’, due to the belief that a ‘hyper-convenient’ payment method must by definition be insecure and unsafe, the inverse was observed when it came to loyalty related innovation, where ‘convenience’ was clearly the name of the game.

When consumers were asked to pick which recent payment innovation they’d ‘most like to use’, the following ‘convenience-based’ innovations came out top.

Linking a payment card to a loyalty scheme 

We’re all familiar with the tried and tested loyalty card used by many supermarkets and large retailers, but with 1 in 3 respondents indicating that they forget to bring their card with them when they purchase, the reality remains that a separate dedicated loyalty card is not the most convenient way of identifying a consumer, at least from the consumer’s perspective.

As card usage continues to replace cash for many retail purchases, it’s not surprising to see that the most favoured payment innovation among consumers is the ability to link a payment card to a loyalty program.

With 75% of the respondents indicating this as a desire, there is clearly an opportunity for many retailers to uplift and enhance their existing loyalty programs to support payment card linkage, or at the very least ensuring that a fallback mechanism exists if the consumer forgets their loyalty card.

Loyalty cards have served the industry well, but they were conceived in a time when payments were predominantly made using cash or cheque, long before payment cards became the norm for many consumers and retailers.

The potential of ‘big data’ to offer ‘relevant’ vouchers based on payment history 

Coming in second but still following the ‘hyper-convenient’ theme is the concept of retailers tracking the individual expenditure of each consumer and then offering ‘relevant’ vouchers based on past expenditure.

This is nothing new for Card Issuers, with the likes of Cardlytics dominating this space in the US, but it remains a relatively unchartered territory for individual retailers.

However, when it comes to ‘relevant’ vouchers there is a narrow line between ‘convenient’ and ‘creepy’, as Target discovered the hard way last year when news broke that the well-known retailer was able to predict pregnancies based on changes in the purchase behaviour of a consumer.

The key lesson here is that whilst some consumers consider purchase tracking to be a value-added convenience factor, there are others who consider it as a violation of their privacy.

Retailers planning to provide ‘relevant’ recommendations and offers should at the very least give the consumer the option of either opting-in or opting-out of such initiatives.

With all the talk about ‘big data’, it’s not surprising that some consumers would like to see this data being used in a way that actually makes their lives easier.

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