Many of the major mergers and acquisitions in the payments industry the past few years have had an underlying goal -- improve chances to make a splash in retail omnichannel payments.
As merchants, marketers and technology companies come together to embrace the promise of customer connection through physical, digital and mobile channels, payments providers have waited in the wings for their place at that table.
The first step in making that happen is understanding that retailers are now seeking an e-commerce presence that will complement or even boost their brick-and-mortar sales.
"When you are talking about larger merchants, omnichannel is a given with online and physical stores, but when you go down market and talk to smaller companies, they tend to specialize on individual panels," said Richard Oglesby, president of AZ Payments Group and a partner at Double Diamond Payments Research. "Omnichannel for Square is very different than omnichannel for Vantiv."
Square introduced an omnichannel option to its micro merchants who were using the Square mobile card reader by offering Square Market as an easy-to-establish e-commerce site to sell merchandise, while also establishing partnerships with other e-commerce providers.
Whereas, a technology provider/processor like Cincinnati-based Vantiv is able to have a much broader view with a similar sales pitch that driving transactions, and processing and settling payments has to cover all channels in which a retailer can connect with a consumer.
"We are seeing it happening in the point of sale space and e-commerce space where a merchant needs an inventory management system and other features, and a lot of those services are integrated with payments," said Ned Canning, e-commerce product manager for Vantiv Inc.
In acquiring Mercury Payments in 2014, Vantiv made a significant move to be a player in integrating payments software into other features at the point-of-sale terminal and beyond.
As e-commerce expands into omnichannel settings for merchants, Vantiv "wants to be able to process payments for those vendors making software for a specific business case," Canning said. "It can all come together in a solution that fits the business."
As brick-and-mortar retailers aggressively invest in their e-commerce sites, there are successful e-commerce merchants contemplating brick-and-mortar sites to complement online offerings, Canning said.
"Both sides are moving similarly, so at Vantiv we are trying to combine our product set into something that can serve that much bigger multi-channel retail setting, while still having a singular Vantiv," Canning added. "Payment processing, reconciliation, funding, cash flow, all of those things we can help with are fundamental to all businesses."
As the omnichannel trend becomes larger, it will introduce another "generation" of technology to link merchants and consumers, Oglesby said. "An early generation for most payments companies means they can support both e-commerce and physical stores," Oglesby added. "But we are already seeing a lot more sophistication with larger big-box stores with order and pay ahead, and pick up in the store, or establishing technology in which a customer is dragging and dropping shopping items from one device to another."
Adobe, looking to establish itself as a company far beyond one providing Photo Shop and file reader applications, wants to become a perfect partner for retailers and payments providers in that next-generation phase through its Adobe Marketing Cloud for Retail services.
In that world, Adobe technology would be essential for bringing physical retail and digital commerce together, with an emphasis on more digital presence in a physical store, said Michael Klein, director of retail strategy for Adode.
Examples would include the Adobe Experience Manager Screens [AEMS], which the company unveiled earlier this year, a technology that allows shoppers to connect their online shopping preferences and bookmarked items and bring it to their in-store shopping experience. In a full omnichannel experience using AEMS, Adobe envisions a consumer shopping for a new car entering information and list of potential models onto their mobile devices, then using a locator app to find the nearest location with those models. Upon arriving, the consumer could use a mobile app and, with the swipe of a finger, move the details from their device to an AEMS at the auto dealer to further discuss options.
An auto deal may not be the best example in which a payments component could be embedded in the process, but the general concept of AEMS calls for a payment option capability in a retail setting.
"We are agnostic to the commerce engine and payment engine," Klein said. "We are creating an open nework, so it doesn't matter what form of commerce -- watch, screen, tablet, desktop."
Adobe does recognize that the "glass," or screen the consumer is using, is only one piece of the omnichannel experience and that the consumer "still has to transact," Klein added. "Consumers that engage with technology in a store are 20% more likely to convert to a sale. The AEMS in some settings also allows customer engagement anonymously with a touch screen and digital tech, and at the moment of interest, the ability to raise a hand and say they want help."
Adobe would be providing the "experience manager" software under the hood of various technology advancements to help merchants connect with consumers, create stronger shopping experiences and thus more sales.
"We have partnerships with payments providers," Klein said. "We control the consumer experience, they control the payment transaction."
Though Klein could not provide specific details as of yet, he did confirm Adobe is working with various partners to develop a "Connected Smart Bag," which would be a shopping bag with an RFID reader in it that could scan items as the consumer placed them in the bag.
The bag would calculate the cost of the items in the shopping bag to create a transaction that would be paid as the consumer leaves the store through beacon technology that would charge a linked account.
"It still has a lot of challenges, but it illustrates that we are working with partners on various projects to use the Adobe Experience Manager and data analytics," Klein added.
LIke other payments advancements, omnichannel offerings will grow or stall on the strength of merchant and consumer adoption, AZ Payment's Oglesby said.
"This is not like a Jetsons' world in which we are dreaming about technology that we don't have yet," Oglesby said. "The technology is here and very feasible. But it's more about the cost of deploying at scale and whether consumers would actually use it, or are ready to use it."