Universal Commerce Will Force Retailers to Change

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Universal Commerce Will Force Retailers to Change

By Bruce Dragt, First Data Corp. - 04/08/2013

Technology advances have greatly impacted the payments industry and consumers now expect a more integrated buying experience that is not only quick, consistent and secure, but also readily available and accessible wherever they are. Convenience store operators are recognizing that customer interactions are no longer limited to the confines of brick-and-mortar establishments.

This new reality of increased information and access to sophisticated technology that is transforming today’s commerce can best be described as Universal Commerce. The driving enabler of Universal Commerce is the technology behind smart devices, mobile transactions and personalized offers, among others.

According to a report by PricewaterhouseCoopers LLP, 83 percent of U.S. consumers go online to research electronics, computers, books, music and movies before buying those items in brick-and-mortar stores. It is crucial that store operators acknowledge this new wave of technology behind the latest payment solutions and deliver the experiences that customers want and, in fact, are creating for themselves.

Offering these seamless and integrated engagement experiences, though, requires rethinking basic business models, practices, processes and the technology infrastructure that supports them.

Devices such as tablets and smartphones enable store operators to execute highly targeted promotions that are proving much more cost effective than broad, poorly focused awareness advertising. The lines are blurring between in-store commerce, eCommerce and mobile commerce. Smart devices have opened the door to prepaid mobile applications (apps), smartphone-based media purchases, and near-field communication or cloud-based technology.

Consumers are not just using their smartphones to socialize with a select few on social networks, but rather to log on to user review sites, gain knowledge from people they are connected with, and take advantage of virtual wallets to make online purchases that they will redeem in-store.


The popularity and demand for electronic promotions is another increasingly influential consideration on the payments industry because of technology. By using electronic promotions, consumers can consolidate and track personal offers, ensuring a higher redemption rate. These capabilities alter the economics of offers and loyalty programs, and also provide merchants with detailed data revealing customer shopping behavior.


Mobile devices are at the forefront of changing how consumers go about their daily lives – and in particular, how they are monitoring their finances and making purchases. Commerce-enabled mobile devices allow users to manage multiple accounts whether they are credit, debit or merchant-specific. By simplifying how resources are managed, consumers can improve financial monitoring and purchasing decisions, and experience faster, simpler transactions to eliminate dependency on credit cards, debit cards, checks and cash.

Consider that in a recent First Data Corp. study, 60 percent of consumers surveyed said they believe contactless payments translate into faster transactions, with 36 percent saying mobile purchasing is more convenient than using a credit or debit card in person at the store.

As technology matures and new options become available, consumers will continue to gain confidence in the security of mobile payments and be more aware of the technology features in place — such as the layered security concept — to protect their data. In fact, experts predict that most consumers will have embraced mobile payments by 2020, wiping out the need for cash and credit cards, according to a 2012 Pew Research Center report.


Technology is also helping to provide software developers and direct-connect merchants with a streamlined way to deliver payment-rich applications through a single interface that empowers customers to pay any way and anywhere they choose. By doing so, merchants can reduce the time, cost and complexity of integrating with their payments processor, which includes simplified testing and certification, expediting time to the market.

Businesses that accept credit or debit payments will also need to ensure ongoing heightened compliance with the Payment Card Industry Data Security Standard (PCI-DSS). But this process doesn’t have to be time consuming or difficult – especially with the right tools in place. The good news is technology exists that helps small to mid-sized merchants rapidly achieve and maintain PCI-DSS certification. This would include point-to-point encryption and tokenization solutions.

As consumers continue to demand more convenience, store operators should also consider how EuroPay, MasterCard and Visa (EMV) technology affects their businesses and look into options for accepting chip-based credit and debit cards.

In the coming year, non-cash payments will continue to be a significant component of most businesses’ receivables. Beyond traditional debit and credit, transactions made by mobile devices and contactless cards will gain popularity. Proactively researching and investing in smart solutions that work today will ensure that retailers are prepared for what’s to come.


Like financial institutions, c-store retailers must recognize they need to adapt to the new ways of doing business in order to survive in today’s marketplace and embrace technology as it becomes available. By adopting the same Universal Commerce attitude as consumers, customizing it to their business and choosing the right partners to integrate cutting-edge technology, c-store operators will be able to create more innovative solutions that can help increase customer loyalty, boost repeat business and leave more customers satisfied.

Bruce Dragt is senior vice president and division manager of payment acceptance at First Data Corp. He is responsible for driving product development globally across the company’s suite of merchant products. These products include core acquiring, eCommerce, International Currency Solutions, Leasing, TASQ, TeleCheck and security products.

Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.