The Future Of Payments Is On Its Way – But How Can UK Retailers Stay On Top?


Klarna CEO Niklas Adalberth tells TechWeekEurope how British businesses can ensure they capture their mobile audience

Increasingly, the UK is a nation of convenience consumers – and expectations around convenience are growing. The online-everywhere convenience of smartphone and tablet apps have combined a mass of interconnecting technologies which speed up inventory management and delivery to create a world where a few taps can have lunch delivered to our desks, or our laundry collected, washed and returned, and retailers are competing to deliver products not just on the same day but the same hour.

The demand for convenience extends to the buying experience. Customers want a seamless shopping experience, no matter where or how they shop. They want to find an item, have it delivered to their house and pay for it a way most convenient for them.

Zapp - App mobile paymentsRecent statistics from the British Retail Consortium (BRC) and Google show British shoppers are increasingly using smartphones to shop online, especially when it comes to shopping for clothing. According to the research, in the first quarter of 2015 searches for clothing on mobile devices has increased by 54 percent year on year. According to IMRG Capgemini a total of £104 billion was spent online in 2014, with forecasts set to grow another 12 percent throughout 2015.

To keep up with the demand, retailers are scrambling to make their sites more attractive and functional on phone and tablet screens. In turn, new payment technologies are being developed in the market to close the conversion gap between mobile and other forms of retail.

Take Apple Pay’s planned UK launch last month – this is an enabling technology that promises to authenticate payments using a fingerprint read by the TouchID sensor in Apple devices. As these technologies become increasingly popular and the mobile web becomes simply the web, retailers will need to ensure their checkout solutions are compatible with payment systems available on mobile devices.

Below are my top tips to keep in mind when looking at new payment options.

Is it simple? By taking simple steps, such as removing the need for customer registration and passwords, businesses can increase mobile conversion rates by up to 80 percent. Buying online should be a simple experience.

Does it add more than simplicity? Simplicity is the table stake for a modern payment solution. What else does this payment solution offer the convenient consumer? For example, Klarna reduces friction at the moment of choice – when a customer will either complete or abandon their transaction – by taking on both the payment and the risk, then allowing the customer to complete their payment at their leisure within 14 days.

Is it secure? Look out for a payments system that only takes on full risk for both retailer and consumer. But also has a number of different processes to keeping your customers data secure and has a dedicated team who solely manage the payments security and risk processes.

The move to mobile-first, and the adoption of new payment processes and philosophies, can seem daunting for retailers. Managing a multi-channel operation, while still offering consumers a smooth and integrated service, is a challenge. However, retailers are missing out on a huge opportunity if they do not remove the barriers and make it as simple for customers to buy online as it is to walk into the shop, pick up an item and purchasing it. To be able to cash in on the potential of mobile commerce, retailers need provide simple and seamless payments. With payment fulfilment removed as a blockage to sales, retailers can sell on the strength and quality of their brand, range and customer experience – just as retailers always have.

Niklas Adalberth is CEO and co-founder of Klarna

All clued up on mobile payments? Try our quiz!