Why an omnichannel payment strategy is more important than ever

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By Kevin Morgan

As a member of the European Union, British businesses have enjoyed the opportunity to sell to customers and buy from suppliers throughout the EU without additional taxes or levies. However, following last June’s referendum and the triggering of Article 50 at the end of March, the spectre of Brexit has cast a pall of uncertainty over the future of this arrangement. And while nothing has changed as yet, it would be prudent for British businesses reliant on revenue from trade with Europe to consider how to make future European trade as painless and straightforward as possible.

Britain won’t be the only country keen for trade to continue and for new deals to be established quickly – we buy cars from Germany and Italy, French and Spanish wines, and about 85% of all vegetables we import come from within the EU, with Spain and the Netherlands being the two biggest suppliers. However, when it comes to hammering out new trade arrangements, Britain seems to be the party most in need of a good deal.

Prospect magazine recently organised a roundtable discussion – “Brexit Britain: the trade challenge” – at which Vicky Pryce, a board member at the Centre for Economic and Business Research, said: “I think [Theresa] May’s been persuaded by various politicians who seem to think the trade that Europeans do with us is very significant for them, when in fact it represents only 7% of their exports, whereas what we trade with them represents 44% of our exports.”

So how do we facilitate the continuation of EU trade?

Making payment for goods and services as straightforward as possible has to be a key element of any strategy. Consumers increasingly use multiple channels when shopping – a process that for most of us is so much a part of our life that we don’t even consider that we are using a variety of methods.

Payment falls into the same pattern, whether that’s debit or credit, cash, card, contactless payment, mobile wallet or Direct Debit. As far as the customer is concerned, a purchase – from browsing to selection and payment – is a single transaction, and it benefits businesses to make the interaction between channels seamless so that what buyers enjoy is a continuous shopping experience.

Implementing a successful omnichannel payment programme should be at the heart of providing that consistent and straightforward customer experience, and yet a report from PCM Research and ACI Worldwide suggests that less than a quarter of merchants in the UK, Europe and North America have fully implemented such a strategy. In the current situation and going forward, there’s an argument to be made that implementing an omnichannel infrastructure has the potential to deliver considerable competitive advantage.

Bringing clarity to a shifting landscape

Going forward, much will depend on the details of the trade deal struck between Britain and the EU, and the nature of that deal depends very much on who will be negotiating on the UK’s behalf – and with the General Election still several weeks away, we don’t yet know with any certainty who that will be. This also makes it difficult to guess what legal and regulatory changes may be in store for British businesses when we leave the EU, as well as which EU institutions and mechanisms we may potentially be able to continue to use.

As an example, businesses will shortly benefit from the Single Euro Payments Area (SEPA) Instant Credit Transfer scheme (SCT Inst), which is due to come into operation in November 2017. This will allow businesses and consumers to make instant real-time payments of up to 15,000 euros to any bank account within the EU.

SCT Inst will be available to the 28 EU member states (including, for now, the UK), the member states of the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland), plus Monaco and San Marino. It remains to be seen whether the UK will be able to retain access to the mechanisms of SCT Inst post-Brexit, and if so, under what terms.

In the face of so much uncertainty, the best approach for businesses is to be prepared and to be flexible. To help with that, here at London & Zurich we’ve gathered together some of the more popular guides out of the series our expert business payment consultants have compiled over the last year or so. They cover the more frequently asked questions that come our way and we have made them all available in a comprehensive e-book, Direct Debit for Small Businesses, which you can read below.

Kevin Morgan is the Managing Director of business payment collection specialists at London & Zurich