In 2008, Dutch entrepreneur Thomas Brinkman was sitting in a café. After waiting some time without being served, he decided to phone up the café to make an order. He was served promptly. But then when he wanted to pay his bill, he was again left waiting. So he once again phoned up, and was again successful.
This led him to think: ‘This could be a business!’ Today, MyOrder helps hundreds of thousands of customers in the Netherlands place orders with thousands of merchants, streamlining the retail experience, saving both sides time and resources and applying existing technology in a new way: shifting the flow of information.
Consumers’ expectations are changing: they can expect more speed and responsiveness from merchants by making use of new technology to connect and interact with them. Moreover, merchants realise that they stand to gain by encouraging these connections, developing the capacity to receive pre-orders and to fulfill them according to consumers’ wishes.
What’s also notable about MyOrder is the role of banks. Dutch Rabobank took on the enterprise as a start-up and helped persuade both its banking and merchant customers to adopt it. By 2014, there had been more than 300,000 downloads of the MyOrder app and more than ten thousand merchants accepted it.
Rabobank was prepared to take a chance on an untried technology because it identified a gap in the market and could see that it would benefit everyone, with Rabobank as the central connecting factor – and customers would place greater value on their relationship.
The MyOrder story is a sign of what we, at SIX, believe will be a growing trend, with banks stepping in to support transactions in an open and appealing fashion. Banks already have strong relationships with their customers, which they can use in new and innovative ways. A future value chain will be one where banks can match up information from merchants and consumers (as Rabobank has done with MyOrder) and create a novel offer between the two sides, with added value. Paymit in Switzerland is a similar approach, where SIX currently facilitates smartphone users to conduct person-to-person payments in a bank agnostic approach. This means that customers can use Paymit regardless of who they bank with. Only recently, mobile giant Swisscom joined the Paymit partnership, and supports the vision of a nationwide alternative to cash in retail as well.
In the UK, the Doddle service, where customers make online orders and then pick up goods from a local collection point, is another similar initiative. And there are parallels with new, disruptive services such as Uber, where customers can order taxis online based on their geographical location.
MyOrder is interesting because it emerged from virtually nothing to become a widely used technology in the Netherlands, whereas in other cases, these new payment systems originate with giant chains such as Starbucks or McDonalds. It is typically harder for smaller merchants to adopt online payment systems.Merchants are grateful that they can forge contacts with dozens of new customers and are happy to pay a surcharge on transactions if it encourages people through the door to increase sales. It’s a similar model to the way Google ads work, paying a charge for all the clicks that a merchant collects. Once a merchant works out its conversion rates, they’re willing to pay a certain amount for these.
For consumers, the rewards are easily measured: they save time, they can place their orders while they’re waiting in queues, at home or on public transport, timing their collections of goods or services to coincide with their own schedule. And by using smartphones, these transactions can be integrated with other technologies such as payment services.
A good example of this is Beacon technology, which has already been developed but is not yet widely available. This service works within a physical retail store, identifying a returning customer and providing them with useful information, such as new offers, or the location of their favourite goods. Providing this wealth of information helps to smooth out retail glitches: a consumer can still order and receive their preferred goods even if they’re out of stock in the physical store.
We believe that Beacon technology will become widespread, but it has to overcome some technical development issues first. Nevertheless, Beacon projects have been running for some time, with sample stores introducing the technology and experimenting with its capabilities. It certainly offers potential benefits to both consumers and merchants, although you wouldn’t want to receive intrusive alerts every two or three meters as you walk through a store. The idea of being ‘spammed’ by retailers is a danger that they will need to guard against.
Many consumers still value visiting shopping districts or malls simply for the experience, without a specific purchase in mind, and being excited by the serendipity of random opportunities.On the other hand, many shoppers become frustrated by visiting stores where there are no sales people, or where they have to spend time queueing for information and there is a lack of clarity.
A positive solution to this is the model adopted by Apple Stores, where sales people are equipped with iPhones with which they can provide full and up-to-date information to customers, take them through the sales process and complete a transaction on the spot. It even goes so far that customers can use their own iPhone to scan the barcode of a product and pay for it immediately. This removes a lot of unnecessary delay and enhances the communication and experience between merchant and consumer. We think this model will be more widely adopted as retailers embrace mobile technology. Some may even encourage sales people to use their own devices (BYOD).
At SIX Payment Services, we engage with all of these new technologies and view them as part of a converging retail environment. We serve all channels in a frictionless way, ensuring that our services fit neatly into each channel, as one complete and integrated whole. Where merchants need help and added value, we are there to provide them with these multichannel services, for their benefit and for the benefit of consumers.
We are playing our part in shifting and streamlining the flow of information, so that unnecessary waiting becomes a thing of the past, whether in cafes or anywhere else.
Sascha Breite is Head of Future Payments at SIX Payment Services