The future of payments is all about convenience – and cash – say Morrisons and M&S

Retailers will continue to increase the speed and convenience of payments while using data to improve customer interactions and relationships – but cash will also remain surprisingly important, according to experts from Morrisons and M&S.

Speaking during a discussion about the future of payments at the Retail Technology Show this week, Kate Lavery, head of technology at Morrisons, said that while the pandemic has led to dramatic increases in the use of digital payment methods by customers, many retailers will continue to need to offer a broad range of payment options.

“Yes, contactless is great, but cash is still there,” she said. “We need to make sure that when we’re driving innovation for payments we’re looking at all the options that customers want.”

Jamie Korda, principal architect at Marks & Spencer, said the events of the past two years show how quickly the retail sector can drive change when necessary, but they have also altered consumers’ expectations significantly. “Customers now expect one-touch payment online,” he said. “How do we bring that to life in store?”

His view is that the answer will be tied to identity: to being able to use technology to link transactions to individual customers’ profiles and loyalty schemes much more seamlessly than at present.

Lavery agreed, suggesting that services enabled by the Open Banking initiative may end up forming part of the answer.

She also highlighted the need for retailers like Morrisons to invest in technologies that will enable digitisation of cash management processes to increase efficiency and remove risk – but she also suggested that many solutions available at present are not yet cost-effective. “A grocery retailer like Morrisons needs those costs to come down, to be able to automate that cash office activity,” she said.

An audience member, noting that many of the exhibitors in the main hall were selling card reader solutions, asked the panellists if they thought there would still be a need for these technologies in five years’ time.

Korda said that if he could remove that process and complete transactions seamlessly via mobile applications that would be wonderful – again noting that a link to an individual customer’s identity would make this easier.

But Lavery pointed out Morrisons has just rolled out new PIN entry devices across its stores and petrol stations and asserted that this was “exactly the right call” for the retailer, as 80 per cent of contactless payments are still made using cards. “If [customers] are telling us that they like to use their cards then we’ll continue to use them,” she said.

For all the innovation underway in the digital space, it appears that cash and plastic will be with us for some time to come.

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