A new study from Juniper Research has identified a range of strategies for payment providers to deploy if they are to maximize their opportunities across both the offline and online space.
The research group found that retail spend is expected to increase by $6 trillion globally between 2018 and 2023 (taking total spend to $30 trillion), with growth driven by a combination of alternative payment mechanisms (most notably wallets) and online spending.
However, stakeholders face a host of competitive and regulatory challenges if they are to take full advantage of the opportunity. According to Juniper, reducing friction at checkout remains a key hurdle, with online cart abandonment rates high.
Meanwhile, the research group highlighted that, in many markets, in-store spend will plateau or even decline. This increases the likelihood that major retail chains may be obliged to scale back their physical presence even further. Juniper also assessed strategic approaches of over 40 payment processors, mobile wallets and telco payment providers; comparing their capabilities, breadth and depth of their service offerings and future prospects in a series of heatmaps and Juniper Leaderboards.
The research group says cart abandonment rates can be reduced by a combination of measures, including implementation of card-on-file, one-click payment solutions and ensuring that both popular local payment currencies and checkout procedures are on offer. Meanwhile, a Juniper fraud mitigation return-on-investment analysis found the scale of potentially lost revenue, either through false positives, costly manual reviews or chargeback costs, was substantially greater than the costs of robust FDP (Fraud Detection and Prevention) solutions.
“Service providers must focus on highlighting the bottom-line benefits of identifying genuine transactions as a priority over simply promoting the ability to reduce transaction or account fraud,” said research author Windsor Holden.