A new report from Juniper Research shows that retailers using smart checkout technologies, especially contactless payments, are expected to benefit from higher transaction value, as customers look for a fast, safe, and more effortless checkout experience.
Additionally, retailers’ use of Artificial Intelligence, including smart checkout systems and chatbots, will be critical in ensuring that retailers can deliver a compelling omnichannel experience to consumers. The drive for efficiency will lead to investments of over $23 billion by retailers in AI by 2025, up from just over $5 billion in 2020.
Almost all point of sale (POS) and payment terminals accept contactless card and mobile wallet payments in Europe. In China, where mobile payments are the standard now, most merchants accept either Alipay or WeChat Pay.
Unfortunately for US consumers, many merchants, especially small ones, are still not processing contactless payments. The heavily fragmented card payment market and the expense to replace old POS terminals is delaying adoption. One reason is the 10-year delay of US banks and credit card companies to adopt the EMV Chip+Pin standard coming from Europe, which was quickly embraced in other countries.
Additionally, as most European countries went into lockdown in March this year, contactless payments became the norm. Banks increased the minimum amount where customers need to enter their PIN to €50 and £50.
According to Juniper Research, “Smart checkout technologies provide much simpler user experiences by removing traditional checkouts, embracing a ‘just walk out’ approach. The rapid growth will be driven by retailers seeking sustainable business models in the wake of the COVID-19 pandemic. However, the pandemic’s impact is only an acceleration of a long-term decline in the fortunes of traditional retail.”
Research co-author Nick Maynard noted: “To compete with eCommerce disruptors who heavily rely on AI, traditional retailers must adopt AI rapidly to boost efficiency. If they fail to do so, they will face a highly commoditised retail market with an outmoded, uncompetitive business model.“