September 28th, 2020 - Payments
By Brian DuCharme, TNS’ Vice President of Product Management, Payment Solutions
At a time of such change and uncertainty for us all I thought nothing could surprise me; so, I was shocked when I walked into a local convenience store recently and saw a sign asking me to pay by contactless mobile payment, credit or debit card or exact change due to the nationwide coin shortage.
It’s not the first time I’ve seen such a sign but asking for change is usually down to the pandemic not a coin shortage. The irony is that I had only gone to the store to make a small purchase to enable me to get some change which I needed to use a vending machine which didn’t take mobile payments.
Upon my return to the office I hit up Google to see what was happening and indeed it seems that the coin shortage is prevalent in the US and even has its own hashtag #GetCoinMoving. This wasn’t in my 2020 predictions for the payments industry but who could have foreseen this? With shops and banks closed because of the pandemic there has been less cash in circulation leading to this shortage.
Cost to the Retailer
So how are retailers affected by this? Some of the smaller retailers could be hurt more as customers may avoid small purchases if they don’t have the exact change; the retailer, on the other hand, will be affected if they can’t provide the correct change.
Stocking a store with cash and coins comes at a cost. If this situation leads to an increase in electronic payments, then retailers will then see a rise in interchange fees which can already be costly for small stores. Thus, an increase in customers paying by card for small purchases can be an added expense for the business.
Future-Proofing the Checkout Process
Considering the cash shortage situation and these uncertain times, I would ask retailers to look at the opportunity and future-proof their checkout experience to stay ahead of what’s to come.
COVID-19 is forecasted by health experts to be with us for the foreseeable future, in fact this week, Bill Gates speaking on behalf of the Bill & Melinda Gates Foundation noted we shouldn’t expect a return to normalcy until 2022. Obviously, this has and will continue to affect the way we shop. By offering shoppers electronic payment methods you can set up checkouts in different areas of your store that don’t require coins to be exchanged. Checkouts can be sited away from staff allowing shoppers the chance to browse and then scan and go without the need to interact with staff which complies with social distancing rules.
Is Self-Serve the Answer?
Self-serve has been on the rise in recent years as more and more outlets offer consumers the chance to order via touchscreen and then pick up their purchases. McDonald’s is one example of this and offers consumers a frictionless checkout without the need to have contact with staff, other chains are following suit with mobile order ahead apps also gaining in popularity.
Retailers should consider similar options which offer different buying experiences for consumers with unattended payments like self-serve kiosks, contactless payment terminals at the soda fountain and designated POS terminals at counters instead of the main checkout.
Offering electronic payments like Apple Pay, WeChat and Venmo, contactless cards and other smart payments will entice consumers to spend especially among the most vulnerable who are concerned about touching public surfaces. And, if the coin shortage continues, the impact will be minimized.
Retailers who have upgraded their stores will see the immediate benefit during these difficult times. For those that haven’t they should be considering how to improve the checkout experience for their customers with a fast, frictionless and safe shopping experience. As a trusted payment specialist, TNS can help alleviate some of the pressures and take away the complexity involved by updating your payment systems.
Brian DuCharme is Vice President of Product Management for TNS’ FinTech Payments business and has over 20 years’ experience in the telecom and payments industries. At TNS, he leads a diverse global team and is responsible for driving product innovation for safer, more secure commerce.