Retailers’ guide to navigating failed payments


This article is brought to you by Retail Technology Review: Retailers’ guide to navigating failed payments.

By Brad Hyett, CEO at phos.

With the news from UK Finance that 93% of all UK cards are now contactless, we cannot underestimate the importance of a reliable digital payment infrastructure. But what happens when traditional chip-and-pin machines fail? We all remember the recent tech outages across McDonald's, Tesco, and Sainsbury's, which forced the outlets to close down.

Instead of depending solely on one payment system, retailers need to have a backup plan to ensure that their operations stay up and running even during a crisis.

Software Point of Sale (SoftPoS) is one way. It uses existing NFC-enabled devices to offer a simpler, faster, and more convenient method to make payments. Due to its lack of reliance on traditional hardware, it provides better immunity against tech failures, making the business more resilient. It can also act as a cushion in case traditional chip-and-pin machines malfunction. 

The importance of having a plan B

Recent research by GlobalData revealed that the number of people who don’t carry cash has tripled since 2019. In such a scenario, it is only natural for businesses to incorporate cashless infrastructure. However, overdependence on digital payment systems presents challenges. 

Though card infrastructure has improved over the years, it is not flawless. This is evidenced by the recent IT outage faced by major retailers such as Sainsbury’s and Greggs. Most customers don’t carry cash and thus, were forced to abandon their baskets. Since the outlets did not have a reliable plan B, they had to shut shop. Revenue was massively impacted and in a mere two hours, Greggs’ valuation was reduced by £40 million. 

This proves that a backup plan is a strategic necessity in a tech-reliant world. Even at the time, many experts stressed the importance of having a backup in place in case businesses are hit with another tech failure. While the most obvious solution is to strengthen cash acceptance processes, retailers should also consider alternative cashless payment options like SoftPoS. This can reduce downtime, maintain customer trust and experience, boost resilience, and mitigate reputational loss. 

Economical tech maintenance 

Technology is advancing at an exponential rate. To survive, businesses must keep up with the times and upgrade their tech stack regularly. However, traditional PoS systems come with costly hardware such as chip-and-pin machines, self-checkouts, card readers, and barcode scanners, which are difficult to maintain and update. Moreover, updating hardware involves multiple steps such as transport, delivery, installation, and technician visits. Fast-paced retailers don’t always have the luxury of time, which can adversely impact their upgrades. However, software like SoftPoS, can quickly be updated and maintained online. Moreover, since it leverages existing NFC-enabled smartphones and tablets, there is limited physical wear-and-tear and no need for hardware maintenance. 

The future of omnichannel retailers

Omnichannel is the future of retail. This includes traditional forms such as shops and mobile apps, as well as newer touchpoints like pop-up stores, curbside pickups, and events. While traditional chip-and-pin machines work well for the former, they are too cumbersome for the latter, more novel outlets where hardware installation is challenging. SoftPoS, on the other hand, is an easy, portable solution that can be set up at every distribution channel. 

Moreover, long queues at traditional PoS hamper the seamlessness of customer journeys. SoftPoS opens a world of possibilities by removing the restrictions associated with dedicated checkout areas. It also makes it possible to view, order, and pay for items that might be out-of-stock, thus taking a step in the direction of omnichannel retail. 

Any piece of technology is susceptible to unexpected failure. Therefore, it pays to have a backup plan. However, that’s not all SoftPoS is good for. It is an extremely cost-effective solution that supports modern retail by suiting the demands of omnichannel distribution.

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