Credit Card Tokenization leads to Better Customer Experiences

Written on 21 Jul 2016

Note: I am highly aware, as a Brit, that I’ve sold out and used a Z in tokenisation.

As retailers we are still dealing with cash, so any claims of the credit card being a thing of the past are dramatically premature. Whilst we have digital currencies evolving in parallel, we still continue to see innovation and development on top of card scheme infrastructures. This further entrench credit cards in our lives.

The thing to watch, however, is HOW WE USE credit cards.

I’ve struggled to put this concept in to words, but was greatly helped by a recent article on credit card tokenization (N.B. Alas I can’t find said article, I know it was shared by JudoPay on their LinkedIn page).

Briefly, tokenization is way of inputting your credit card details ONCE, through a browser or an App, and enabling a retailer to charge the card in future without needing anything more from you. Yes it can sound a little unnerving, and you are still protected by the card schemes (and hopefully responsible retailers), but this is ultimately the main enabler for t creative customer experiences in physical shops.

Tokenization forms the basis for most stored value account systems, including the award winning experience we created at Harris + Hoole, and has the added benefit of offloading PCI compliance concerns to someone who really knows what they’re doing.

How we WILL use credit cards

I’ve bemoaned the fallacy of mobile POS previously, whereby you’re really just muddying the waters of how you’d expect to move customers through a transaction flow in a shop.

Ultimately, credit card terminals are also a major blocker to the empowerment of customers ordering the way they want to. Even if you remove cash as an accepted payment, you still need to go and swipe, insert or tap a credit card somewhere to pay for goods rendered.

Tokenization, however, presents an opportunity to centralise payments and empowers retailers to deliver NEW customer experiences. Imagine a world where you can walk in to a cafe with friends, grab a free table - and not worry about losing it whilst you order - whip out your phone (with said App), place and pay for your order and have it brought over to you.

From Tokenization to Customer Experience

Whilst cafes and quick service restaurants will likely place incredible value on front of house to help educate customers, their time would be far more valuably spent helping those customers who need it, and letting their regulars just get on with it - no queue building up, no dropping off the back of the till queue, and front of house team members who don’t have to put up with the quirks of a thumping the screen of a creaking E/mPOS system.

The key to designing truly customer centric experiences - especially in hospitality - lies in this ability to integrate payments in a way that is seamless for the customer and reliably secure for the retailer.

The mPOS Fallacy

Written on 13 Jul 2016

Retail is an old concept; provide goods or services in exchange for other goods or services. In modern times the exchange is typically for money - items are for sale.

As customer expectations have accelerated - perhaps skyrocketed - in the last few years, it’s become clear that retail innovation and theatre in physical (e.g. brick(s) and mortar) shops has lagged. Sympathetically so, though. For any sizeable business (or even a small one), keeping up with the retail experiences that mobile + technology COULD enable is an impossible feat; a line has to be drawn somewhere, but conversely retailers should be making some efforts to move the retail needle forward.

Yes there have been improvements in the way we pay (contactless, Apploid Pay), and the design and functionality of the technology we find in shops, but ultimately the concept of “Point of Sale” is a blocker to any future innovation in the world of retail, especially so in the world of quick service + food and drink.

As cash registers have evolved to POS and POS evolved to EPOS, so we see a lot of buzz around mPOS - mobile point of sale.

Frequently preached (by vendors) as the next big thing in physical retail spaces, they allow freedom-of-movement to serve tables, queue bust and potentially play with the retail space and introduce new concepts.

Unfortunately this concept seems to be, at the core, just a more accessible EPOS with - potentially - an integrated card reader.

I have no doubt that we’ll see a good adoption of these concepts, but even the somewhat-disruptive iPad/tablet based POS startups (ShopKeep, Revel) will frequently be found on a docking arm where it can reliably (a) control the cash drawer, (b) print receipts and (c) not run out of power. It’s hard to see how the retail-tech incumbents will avoid this same fate with their mPOS solutions.

mPOS + Coffee Shops

Arguably the world of quick service restaurants (and by extension coffee shops, for which I can write with experience) are one of the best formats to see mPOS succeed.

Unfortunately there are still some hard realities that prevent this happening. Cash still accounts for a major chunk of sales (in the UK) - people don’t want to walk around with cash belts, nor return to a cash-drawer every second transaction. Retailers are concerned with loss prevention. Retailers will also struggle to allocate labour to a roaming mPOS function; when do you serve tables, is there a backup POS somewhere?

Customers still expect to queue; or at least coagulate at a point of sale then drift to a service point.

If mPOS is only going to ENABLE the option of a flexible point of sale, and still require a physical queue point for busy times, they will likely sit in the office collecting dust.

The dawn of noPOS

We are now in a world where you can order and pay for coffee through a consumer App, as well as paying at a restaurant table without needing someone to come over and split your bill 5 ways.

In the high volume, high frequency and relatively low spend world of coffee shops, the next revolution is going to be noPOS where you walk in having ordered already, sit down at a table and order - or at the very least not have to stand in a queue to get your drink.

It will still require big commitments from retailers to drop cash as a payment method, but the idea of removing a normal quick service transaction flow has huge potential:

Centralisation of technology monitoring/support/assurance, team members spending their time engaging customers in meaningful ways to drive better experiences, reduction in cash and card fraud, labour efficiencies as cash handling becomes redundant and ultimately a faster, smoother, more predictable and above all BETTER experience for customers.

N.B. This is obviously a highly opinionated write up and lacks significant references. Opinion is driven through retail technology experience!

Pokemon Could Be Your Biggest Marketing Opportunity

Written on 13 Jul 2016

Pokemon Go hasn’t landed in the UK yet, but when it does there’s little doubt in my mind that we’ll see the same phenomenon as other countries: people tripping over each other, stumbling across roads and scrambling to catch different Pokemon in Augmented Reality.

However for retailers, it could lead to another kind of phenomenon: incredible new footfall and customer capture.

It’s already been semi-confirmed in a Financial Times Article that this ingenious game will generate absurd amounts of revenue through sponsored places:

Alongside in-app payments, “there is a second component to our business model at Niantic, which is this concept of sponsored locations”, Mr Hanke said, where companies “pay us to be locations within the virtual game board — the premise being that it is an inducement that drives foot traffic”.

I find it mindblowingly incredible (I am in awe) that one of the most potentially lucrative marketing opportunities for brick and mortar retailers will be to have an augmented reality cartoon character tucked under their best selling products, with the hope that hordes of potential customers traipse into their shop to snag a Pokemon.

Certainly they won’t be the most relevantly engaged customer base, but given the furious passion and commitment people have already shown for the game, it’s worth a shot, right?

I’m by no means an expert on Pokemon, but it is surely only a matter of time before the 729 Pokemon characters are joined by “Tescomoth”, “Poundlandpoke” and “M&SWhirl” (this isn’t just any Pokemon character…)

Understanding the Contactless Limit Rise

Written on 04 Sep 2015

September 2015 heralded more than the slow descent to Autumn and Winter; there was a big announcement regarding a change to UK contactless limits.

This announcement was muddled in with the UK launch of Apple Pay back in July, and Apple were very keen to work with retailers who would be able to commit to a higher value contactless limits to bolster the Apple Pay in-shop experience.

General - and even retail - press have been highlighting the contactless limit is going up to £30 per transaction.

What doesn’t seem to be getting much coverage is that the contactless limits are now up to the retailer to decide. In order to take advantage of the new £30 - let’s call it a “new safe limit” - retailers need to update their card machine software (which is rarely a straightforward feature).

Any mid to large retailer is actually now in a position to define their own limits. It’s likely that £30 is being forced through for smaller retailers who aren’t in a position to a direct customer relationship with their card machine provider, but those with closer ties can set the limit to whatever they want.

Payment processors are demonstrating an increased confidence in contactless payments (or prepared to underwrite a bigger risk), so it’s hard to understand the limit only moving to £30; how many more transactions will really covered by the extra £10? It seems hardly worth the fuss unless you’re going to introduce a step change in acceptance such as paying for your weekly shop, a family meal or retail-therapy-satisfying splurge.

I suspect the bigger challenge here is consumer confidence in contactless on larger transactions, and also how you reliably communicate with the UK population that the limit has gone up. That said, Visa’s new mandate that all cards issued from December 2016 must be contactless seems to be at odds with lower confidence.

The best text expander for OS X

Written on 02 Jul 2013

After a short stint in Windows, made easier by AutoHotKey text expansion, I am firmly back in the land of Mac. I naturally jumped in to TextExpander but at $34.95 it was a struggle to justify it long term for lightweight text-expansion-only use.

So I hit the App Store.

After a brief stint with "Smart Typer" (subsequently refunded by Apple due to it being grossly incapable and buggy, I found aText.

aText accelerates your typing by replacing abbreviations with frequently used phrases you define.

It works perfectly, all for the modestly affordable price tag of $5. You can save yourself a lot of trial and error if you're looking for straightforward OS X text expansion and go straight to aText.

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