Most retailers say real-time payments will cut costs, cards

Dive Brief:

More than three-quarters of retailers are looking forward to real-time payments (RTP) processing as a replacement for payment cards over time, anticipating lower costs and improved customer service, according to a new study by ACI Worldwide and Ovum.
The survey found 78% of global merchants believe RTP, or "immediate" payments, will result in operational improvements, principally by enhancing customer service during refunds and disbursements, according to a press release about the study. Another 77% believe RTP will replace payment cards. The share of merchants interested in accepting RTP increased to 65%, up from 57% last year.
The survey also reported that 22% of global merchants experienced theft of payment data in the last year, and 61% said they are at greater risk of a data security breach than one year ago.

Dive Insight:

Payment systems have made progress in recent years, yet they remain a significant concern for retailers. For instance, EMV (Europay, Mastercard and Visa) chip cards offered a major advance in security, but they took longer than hoped for to roll out and are still not used universally. Mobile payment apps also offered speed and security, but after a period of initial acceptance there followed three years of stalled momentum, said 451 Research.

The new study from ACI Worldwide and Ovum shows merchants are again looking ahead to refinements in payments systems and processing. They see the speed of payment and customer relationship opportunities of RTP — a payment infrastructured developed by banking association and payment company The Clearing House — as most appealing.

Currently RTP is mainly a background processing function — "financial plumbing," as the study terms it — but some anticipate the system will become more prominent. For example, the iDEAL e-payment service in the Netherlands uses QR codes for consumer transactions instead of payment cards and account numbers. Enthusiasm for RTP among retailers is widespread in that country.

Thus it makes sense that the ACI/Ovum study reported that 50% of merchants will increase their information technology spending on payments and related projects, with growth strongest in the Americas, where 59% of merchants plan to increase their IT investment and 21% said they will boost budgets by 5% or more.

Operating efficiency and innovation projects are on top of the merchants' list of priorities, the survey said. Improving integration of payment and other systems is a top priority for 12% of merchants and a top-three priority for 29%. Innovation is a core objective, with 36% of retailers reporting that payment acceptance enhancements are a leading IT priority.

Point-of-sale security and payment data theft continue as significant concerns in the retailing universe. News about major breaches at Panera Bread and Hudson's Bay were reported recently. However in e-commerce, cybersecurity issues are starting to become like wallpaper, with 59% of merchants in the ACI/Ovum survey seeing abandoned baskets as a bigger concern than fraud losses and charge backs. The same number, 59% of U.S. shoppers, now think that fraud is inevitable when shopping online, according to payments company Paysafe.