How retailers can use the power of fintech to keep their customers and employees safe

Throughout history, one of the impacts of major crises has been the acceleration of change. Trends that were edging forwards before suddenly pick up pace in the advent of a crisis.

Take payments, for example. The decline of cash is not a new phenomenon. One report from 2019 showed that 10% of UK adults are choosing to live in a largely cashless way, with 17% of those aged 25 to 34 making no more than one cash payment per month. Another study said that “a straight-line trajectory of current trends would see an end of cash use by 2026. However, we believe that cash will still be here in 15 years, but potentially accounting for as few as one in every ten transactions.”

This was pre-COVID-19. The last few months have seen years’ worth of change take place in just weeks as both businesses and consumers have reacted to the pandemic’s far-reaching effects. For the former, this has meant putting measures in place to keep both customers and employees safe while still operating. For retailers in particular, these have ranged from enforcing social distancing in queues and introducing staggered opening times, to installing screens around checkouts and increasing the amount of contactless options for taking payment.

Now, as more of life becomes unlocked, these kinds of businesses are facing significant challenges. How do they maintain cash flow and keep customers shopping, without compromising the safety of either employees or customers, at a time when foot traffic is expected to increase?

Overcoming speed bumps on the drive to success

While lockdowns are being lifted, and life is easing back to a semblance of what it was like before the pandemic, measures still need to be in place. For retailers, that means minimising contact between employees and customers. How much contact is expected depends on the sector that the retailer operates in – budget supermarkets have minimal moments of contact, whereas high-end clothing stores may have traditionally provided a more hands-on experience. However, there is usually at least one consistent moment of contact, irrespective of what’s being sold: the point of sale.

This is where the declining use of cash can, in the right circumstances, help keep both employees and customers safe. By moving to contactless and mobile payment methods, retailers can easily limit the amount of physical contact that takes place.

In theory, this drive towards digital forms of payment is the perfect balance between re- establishing the physical shopping experience and adhering to the latest safety guidance.
However, it also brings challenges that could seriously delay, if not completely derail, retailers’ efforts to generate revenue.

While established retailers will have the infrastructure to move away from cash and towards more digital payments, smaller brands may struggle. The cost of additional payment hardware is one obstacle, as is integrating the tech into existing systems.

What’s more important is the time it takes for digital payments to convert to cash flow. With physical money, once the coins and notes have been handed over they belong to the retailer, are collected from the till at night, and are deposited at the bank during the next payment run. But with digital payments having to go through the payment provider’s systems before ending up in the retailer’s account, the delay could be significant, even if it is only a matter of days. For retailers that have seen their cash reserves dwindle during lockdown, this could be the difference between survival or closure.

The key here is to implement the digital infrastructure needed to incorporate new forms ofpayment. Not only will it allow retailers to continue trading while keeping staff and customers safe, but it will aid them if they’re looking at deploying or ramping up an e-commerce operation. Many retailers that previously didn’t provide an online outlet have had to offer a digital service, whether formally or in an ad hoc manner. And with the possibility of future waves of lockdowns, even if just regionally, having an e-commerce operation that can be scaled up is going to be vital for their ongoing success. As part of that, having a payment system that can easily switch between bricks and mortar and online is critical.

So who is responsible for delivering this capability? Clearly, retailers need to be open to this new approach, and will undoubtedly have been exploring their options. However, fintechs also have a role to play. Many retailers may have resisted previous attempts to digitise elements of their operations due to a perceived lack of time or knowledge. Now, fintechs need to demonstrate how their offerings fit seamlessly with existing systems, how easy they are to use compared with established players, and how their solutions are as suitable for an independent bookshop as they are for a multichannel national retailer.

Retail in the socially distanced era

Retailers have to seize the opportunities that the relaxing of lockdowns offers, but they have to do so in such a way that it does not compromise the safety of their staff or customers, and which makes them feel comfortable in a retail environment once again. Fintech-led digital solutions can deliver that balance, but it requires both retailers and vendors to work together. With small businesses, in particular, in danger of missing out, everything must be done to help them build the digital infrastructure they need to continue to offer a safe, yet profitable, shopping experience.

Brad Hyett, CEO of phos