Regardless of the specific challenges and issues in their respective market, every merchant is highly focused on generating incremental revenue and lowering costs to drive more profits.

At the same time, they are equally focused on developing more meaningful relationships with their customers to increase loyalty program penetration and brand affinity. How are some of the more forward-looking merchants trying to accomplish all of these incredibly important initiatives at the same time? By putting payments in the front of the transaction experience.

For as long as I can remember, payments has been an afterthought and something that is more of a utility that comes at the end of a transaction. Historically, merchants focused much more on advertising, marketing and promotion programs to get customers into their stores (and eventually onto their websites) and gave very little, if any, thought to leveraging the payments aspect of the experience.

Shopper in a Target store
The debit program at Target has had an impact on other merchants, according to Adam Frisch. Bloomberg News

This was especially true for merchants in nondiscretionary areas — the every-day, every-week, every-month verticals like gas, pharmacy, grocery, recurring and QSR. They now have an incredible opportunity to lead with their own branded debit payment option (because the vast majority of their payments are in cash and debit) on their apps and websites and directly address the important initiatives of driving profits and increasing customer loyalty. Seeing the successful “private label” debit programs at Target and Cumberland Farms has inspired more merchants to launch their own initiatives. You will soon see many more examples like the following: When you pay with ABC Cash get X% off; pay with ABC Debit and skip the line; pay with ABC Bucks and get double coupons on our store brands.

The examples of how merchants can provide their customers with more value throughout their shopping experience are endless and completely customizable within each industry. The bottom line is that a merchant-branded tender gives the merchant the opportunity to create a better buying experience that the consumer associates with their brand and logo. However, for this strategy to work, this better buying experience really needs to be better.

And that leads to the second key requirement of a successful customer engagement initiative — the merchant needs to make it fast, easy and rewarding for the customers. Because cash and debit make up between 60-70% of merchants’ transaction volume on average for the merchant categories mentioned above, ACH is the logical rail to leverage for the actual transfer of funds. Fortunately, there are platforms in the payments marketplace that enable lightning-fast consumer enrollment, provide comprehensive fraud prevention tools and process ACH transactions quickly with guaranteed settlement.

So with some creative thinking, merchants now have the ability to lead with their brand and offer their customers more value and convenience on their apps and websites, while also driving incremental revenue, growing their loyalty program and dramatically lowering transaction fees and fraud costs. Amazing what can happen when you flip traditional thinking around a little bit, huh?