News Feature | May 19, 2014

Goodbye Checkout? The Future Of Payment Processing And The Internet Of Things

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By Hannah Ash, contributing writer

Internet Of Things Checkout Lines

Seamless Shopping Means No Lines, No Checkouts

Imagine customers walking into stores, grabbing their selections, and leaving with them. No lines. No waiting. No paying? Just in and out, the way a customer might grab an extra napkin at the food court. Seamless, yes. Shocking, yes. However, the future of payment processing could leave checkouts in the dust. As retailers like Amazon continue to innovate new ways to reduce payment friction, focus is being placed on the idea of just taking out checkout from the equation. Michael Chiu, partner with McKinsey Global Institute, recently said the future of payments isn’t too far away.

This seamless way of paying will be an extension of the Internet of Things (IoT), or a way of linking actual objects to corresponding online information and data. QR codes, digital watermarks, and barcodes are all examples of objects linked to digital files.  How will checkout be eliminated via the IoT? Using a series of sensors, stores will gain access to certain shopper information upon a consumer’s entrance into a shop. Information stores will have access to will include any previously stored payment information, making it easy for customers to simply walk in, select an item and walkout with it - their cards are charged automatically. Chiu notes, “people have said when checkout is working really well, it will feel like stealing.”

The fabric of how payments are processed is already undergoing significant changes. For more than two years now, some restaurants have offered self-checkout at the table using iPad like devices called Presto. Apple Stores launched Easy Pay a few years ago, which lets shoppers pay using the information attached to their itunes accounts. Stop & Shop supermarkets have provided their customer base with intelligent carts, or scanners to total up purchases as items are placed in the cart, for years. How well received theft-like shopping will be remains to be seen. David Dorf, senior director of technology strategy at Oracle Retail, is quoted as having said some customers may find it “creepy” that the store knows so much about them, and that stores will need to play up the helpful, butler-like role and play down the more off-putting stalker-like role. If stores can do this effectively, Dorf says, “the Internet of Things has a lot of potential to make the customer experience more rich and engaging, and loyalty will ensue.”

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