New payment methods 'must pass the bus-stop test'

Businesses behind the various new methods of payment being marketed to the retail industry must find a "killer user case" before they can gain wide adoption among consumers, according to the head of strategy & product management at payments services provider (PSP), Sage Pay.

Chris Wade said new players have a challenge on their hands to differentiate themselves from the crowd, as the next generation of retail payments technology plays out over the coming years.

Mobile wallets and payment apps are beginning to enter the retail ecosystem, and Apple Pay's launch earlier this year has been described by some in the industry as a significant move in encouraging greater adoption of mobile payment technology. But the way we pay will not dramatically change overnight – the slower than expected adoption of contactless in the UK is a case in point.

Wade explained: "In terms of payment types getting mass adoption, they need to pass the bus-stop test.

"You have to be able to go to a bus-stop and ask all people in the queue whether they have heard of payment type x – and you need a decent return from that before you start to see the landscape of payments truly change."

Mobile Wallets will have a "great deal of influence" as shopping on mobile devices continues to increase, he added, while mobile payments provider Zapp – which recently revealed a list of tier-one and two retail partners it is set to work with in the new year – is viewed by the Sage Pay representative as a company with noteworthy potential.

"New payment methods have to convince shoppers that they are worth adopting. There are instruments that will be fantastic game-changers – wallets for example," Wade noted.

"As shopping on mobile increases, the need to enter personal details on a small screen will continue to be a pain, so anything that simplifies it will be good – PayPal, and MasterPass will come into play here. The latter two have the challenge in that they are behind PayPal – why would any consumer carry more than one digital wallet? Where is the differentiation? That's what these companies have to demonstrate."

These technology providers are faced with the dual challenge of needing to satisfy consumers' needs, while at the same time making implementation of their systems as simple as possible. Wade argues that it is the same situation for retailers looking to introduce new technology.

Sage Pay typically serves smaller merchants but there are some larger and expanding businesses on the company's growing client list. Shoe retailer Office and flower delivery service Bunches provide evidence of the PSP's diverse customer base.

"There are some fairly consistent themes that have emerged for the businesses we work alongside and they are how to stand out from the crowd and how to make sure consumers want to shop with them," said Wade.

"They are doing this against a background of an increasingly competitive retail landscape."

As the pace of change in both payments and the wider retail industry continues to accelerate, Wade acknowledges that the route to success for new platforms and technology will be ensuring relevancy for retailers and shoppers alike.

He said: "Retailers are faced with competing demands; one is to provide a slick and seamless experience, which is complicated to implement, while at the same time they must present this to shoppers in a simple way.

"Businesses like Sage Pay sit between the retailer and the back-end complexity – making it as easy as possible for retailers to focus on their websites, physical store environs and to deliver the right experience to customers. The key point of any retail transaction is when the shopper pays, so we make sure we provide a service that makes conversion as high as possible – both online and offline."

Sage Pay will be co-hosting a payments roundtable with Essential Retail at RBTE 2015, which takes place at London's Olympia in March. Retailers interested in participating should contact

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