Q&A: Ingenico SVP on how the pandemic catalyzed retail tech adoption — and what businesses will need from POS hardware and software moving forward

Brad Giles, Ingenico's SVP of marketing and sales enablement, talks about about the ways the brand has adapted to the shifting environment

In March, the retail industry was turned on its head as stay-at-home orders and lockdowns closed nonessential retailers and pushed much of the economy online. But even now, as all 50 states are reopening, retail looks different: Stores must adhere to capacity restrictions and social distancing requirements, and wary customers returning to stores are still searching for ways to minimize physical contact, especially as a second wave looms with cases surging in parts of the US. As a result, retailers have seen a jump in demand for touchless shopping options, like buy online, pickup in-store and curbside retail, as well as for digital and contactless payment options.

These changes have implications not only for sellers, but for the payments providers that work with them. If these providers can't rapidly innovate to keep pace with the changing environment and find ways to help retailers comply with public health guidelines, while still meeting the expectations of their shoppers, they could risk damaged relationships or attrition, especially in such a competitive industry.

Insider Intelligence spoke to Brad Giles, Ingenico's SVP of marketing and sales enablement, about the ways the brand has adapted to the shifting environment. We discussed what terminal vendors are learning from retailers right now, how that might impact the next generation of payment terminals, and what the biggest opportunity in commerce enablement will be post-pandemic.

The following has been edited for brevity and clarity.


Insider Intelligence (II): How has the pandemic changed the needs and demands of the merchants and other clients that Ingenico works with?

Brad Giles (BG): Most of the changes we're seeing relate to the adoption of technologies that have already been available for some time. Contactless and tap-to-pay is the obvious one, but we're seeing a lot more activity with organizations interested in alternative physical payment methods, such as unattended retail, [like self-service kiosks].

We were starting to see a little interest in unattended prior to the pandemic, especially in the quick-service restaurant (QSR) space, but in the past three months, we've seen increasing interest [in the entire footprint], especially from traditional retailers looking for ways to enable customers to check out on their own in-store. We've been working with some big, well-known retailers in their development labs or innovation centers on ways to free up front-of-store floor space by reducing the number of checkout lanes or making them more streamlined. Through that, we can create more unattended lanes or reduce physical terminal requirements, especially as more people are able to tap to pay now that card brands are pushing out contactless cards en masse.

Among sophisticated retailers, the other thing we started to see a big lift in six months ago was demand for throughout-the-store checkout capabilities — so not just scanning to check the price, but scanning, tapping a phone, and walking out the door. If shoppers don't want a receipt, they can have it emailed to their phones, and if someone stops them, they can show that receipt — no big deal. Since the pandemic, we've seen a rapid increase in interest in the technology.

We're also seeing mobility, which has been around — but now, more retailers, like home delivery providers and smaller boutiques, are gravitating toward being able to provide more mobile checkout environments for customers. Large stores are offering front-of-store curbside checkout, while smaller boutiques have no app to pay online to enable pickup. They're realizing with mobility that they can send their associates out with a mobile device to complete transactions outside of the physical store.

But at the end of the day, there's no real new technology: The pandemic has catalyzed the need for technology that's out there. We were waiting for the market and consumers to start to want to adapt to these technologies, but they were slow in doing that. The pandemic just sped it all up.

II: As the country has reopened, have there been further changes — what's the state of play now versus in March?

BG: Although things are starting to reopen, the focus on pandemic-driven customer experience hasn't diminished at all. Our customer, the merchant, remains very focused and serious about providing that pandemic-oriented customer experience. Customers, especially younger ones, have a certain expectation of what their experience should be: They should be able to tap their phones, link to rewards, see funds deducted immediately, cash in points against the purchase then and there, and use readily available coupons. Demand for that experience, and being able to check out when, where, and how shoppers want, is still there, but added onto that now is the ability to do those things in a safe and secure environment. We haven't seen that diminish at all since things have started to reopen.

One thing we are seeing, though, is when traditional devices were designed, they weren't manufactured and tested to have highly volatile cleaning solutions that are 70%-plus alcohol rubbed on those terminals 500 times a day. No one tested for that. So I think one thing we'll probably see change in terminal technology is the ability to withstand rigorous, high-alcohol cleanings in the future. 

Prior to this, we also had two different sets of terminals manufactured with anti-microbial compounds. That has nothing to do with the virus: Microbes are bacteria, and the coronavirus is virus. But we'd tested and launched a few anti-microbial components that make it harder for bacteria to stick to terminals. It doesn't kill it or wipe it out — it's not completely germ-free — but it's harder for bacteria to grab onto plastic and sit on it. We're now wondering — and we're not doing this yet — if there's a way to do this same thing with anti-virals. We're not far along, but there could be something that comes out of this industrywide for terminals that makes them not only more sturdy to cleaning, but also with materials that could be added or enabled to make them better handle a viral environment. There's nothing you can do to wipe out a virus, but there might be ways to make it easier to clean and harder for a virus to stick.

II: In what ways has Ingenico shifted its own strategy to accommodate changing client needs?

BG: Related to the pandemic, a lot of our shifts are operational because supply chains are very tight right now. I didn't think we could be more efficient operationally: The guy who runs our division is all about operational excellence, and he's really good at it. We had an incredibly strong operational focus and best practices we were using globally.

But one of the challenges with operations is that when something like the pandemic happens, you hit a blip, and timelines are tight. Managing lead times, overhead, freight costs, and all of those things so that you can maintain consistency for customers on a regular basis is challenging. We've learned to work closely with our customers, and our relationship with them allows us to navigate successfully through challenges with the supply chain and continue to deliver on-time for what our customers are requiring from us. We haven't missed a beat, even if it got a little hairy sometimes.

That's one of the biggest things for any really good manufacturer, whether it's payment terminals, cars, or blow-up pools. You need really effective operations to be profitable, and if you don't have them, your chances are slim to none. Strong operations position you to be a strong company, whether it's a competitor or any terminal manufacturer. Those that have really gotten their act together operationally are the ones that will evolve really strongly from the pandemic.

II: Has spiking e-commerce affected your work with clients or shifted the big-picture road map at all? 

BG: Not really, no. We have online businesses throughout the world, and those businesses are doing really well, though there are certain vertical markets, like travel and leisure, that have taken a hit, whether it's at a terminal or buying online. But we're seeing ourselves more as an enabler in the space that makes it easy for technologies to be able to come together. Whether there's a pandemic or not, the need to be able to have technologies that are either in the middle of or peripheral to the payments and transactions ecosystem, and enable those to be easier or to connect [more effectively], doesn't change. So, we see ourselves moving toward becoming more and more of an enabler to the market.

II: Have you seen an uptick in merchant interest in adding omnichannel functionality?

BG: True omnichannel isn't just "you can buy online," but rather linking the systems together so there's a completely unified customer experience. Bigger retailers already had that figured out, and they were well prepared for this because of it, even if adoption rates weren't [particularly high yet]. We're now seeing these trends moving down-market, and the pandemic definitely catalyzed that interest. Midsize retailers are realizing, "I might have a site where people can buy online, but I haven't made it seamless for them, so my next move is to create that truly unified consumer experience across my organization." 

II: Are there any specific industries undergoing major lasting change that are worth paying attention to?

BG: QSR and pharmacy. Particularly, it's drive-up windows and all the different merchant subcategories that use them. For any segment that relies on drive-up, I think we're going to see a fundamental and ongoing change in the way they work and the way they do business. People aren't going to be passing cash back and forth as much, and they definitely won't be passing phones or credit cards through the window, so sellers' ability to provide either unattended or mobile ways to make a payment at a drive-up window will be a lasting change, for sure.

In-store experiences, reducing footprint, making it easier for the consumer to check out throughout the store when, where, and how they want — that was all coming anyway. The pandemic just sped it up. 

II: In moving into the new normal, what do you think a post-COVID-19 world looks like regarding payments?

BG: I think these changes are here to stay permanently. Once people realize how easy contactless payments are and learn to trust them, because of the safety factor, and they realize the benefit of an unattended environment and how it makes their lives easier, I think they'll be here to stay.

Payments are incredibly complicated and complex. We're dealing with people's money. So the level of oversight and regulation that's required to maintain and make sure there isn't fraud, and that people aren't stealing people's private financial information and using it for their own benefit, is high. Those regulatory requirements are an absolute must, and we need them to keep everybody safe, but they can create roadblocks. Companies that are able to find ways to mitigate some of that by making it easier to live, interact, and connect within a safe environment are going to see a rapid uptick in people embracing their payments and consumer experience.

[Interoperability] is going to enable more merchants, at all levels and segments, to more easily adapt technologies to meet consumer needs. And the pandemic catalyzed that: Industrywide, everyone wanted to quickly figure out how to adapt to the pandemic, and it was a clear indicator that there are opportunities in the market to bring that easy enablement and integration to the industry. The biggest opportunity for payments providers will be figuring out how to help company A integrate with company B — and [adding interoperability and simplifying processes] will be the expectation moving forward and coming out of the pandemic. 

(Source: Business Insider Intelligence)