Rationalising payment processing fees in an omnichannel environment

The current inflationary environment has prompted retailers around the globe to examine cutting costs, in particular fees related to payment processing. Cutting these payment processing charges has come under scrutiny due to the increase in interchange fees by major credit card companies, not to mention popular digital payments platform PayPal is increasing the fees it charges US merchants or sellers for accepting payments for goods and services through its peer-to-peer payment system.

While global retailers and merchants are on one hand examining how to reduce payment processing fees, on the other hand they are having to provide an omnichannel retail approach of selling through multiple channels via an integrated unit. In the US alone, McKinsey research shows that more than one-third of Americans have made omnichannel features such as buying online for in-store pickup part of their regular shopping routine over the past few years, and nearly two-thirds of those individuals plan to continue. Moreover, most younger Gen Z consumers prefer to evaluate brands and retailers on the seamlessness of their experience, without giving traditional channel boundaries another thought.

The situation facing retailers becomes even more pressing considering that the rate of instances of fraud via digital payment methods have risen since 2021. The JPMorgan “2023 AFP® Payments Fraud and Control Survey Report” shows that, “commercial card fraud increased by 10 percentage points in 2022, fraud via ACH credits was up by 6 percentage points and fraud via virtual cards also increased by 6 percentage points during the same time frame.”

Turning technology into strength

By adopting the right technology, retailers and merchants can not only confidently deal with the pressures described above, they can also turn the situation to their advantage. By consolidating data transactions, spending behaviours can be more easily analysed, which can provide invaluable customer insights and potential cost savings. And by optimising omnichannel experiences, retailers can offer an enhanced customer experience, for example, by starting a purchase online and subsequently finalising it in store.

By facilitating a single centralised payment platform rather than having to manage fragmented systems, retailers and merchants can more easily deploy value-added services, plus have the ability to launch innovative digital card and wallet products in real time. In addition, such systems ensure that big data is kept secure and compliant with PCI-DSS standards, which maintains the processing, storage or transmission of credit card information within a secure environment.

Lowering costs, increasing insights

The HPS PowerCARD solution reduces the cost of payments by being agnostic of devices and acquirers. It also offers retail support for any customer type, and provides a better designed, insights-driven, omnichannel experience that accepts all payment means.

HPS PowerCARD provides omnichannel management and consolidation of any payment in a flexible, transparent and reliable manner and, as a consequence, can increase knowledge of a customer’s spending patterns. PowerCARD can also optimise the routing of authorisations and transactions to the acquirer by using smart and dynamic rules to get the best individual cost for each transaction. It can also  convert easily from one protocol to another, as required. The solution is made secure via a PCI-DSS-certified and high-availability platform.

In addition, HPS can help retailers build a centralised, open and flexible retail payment platform via the HPS Retailer Open Payment Platform. The platform allows their customers to shop by whatever channel they choose, 24-hours-a-day, and offers a seamless customer journey by accepting transactions from any channel, within a secure payment environment.

Innovate for today and tomorrow

Retailers and merchants can innovate both for today and tomorrow by using the adaptable HPS platform to support any existing and new payment means, which can be tokenized to securely store payment credentials required for innovative customer journey use cases. 

For more information about how HPS can help support retailers and merchants in optimising performance and costs, visit https://www.hps-worldwide.com/your-business/retail-payment.