How Unified Payments Can Drive Loyalty And Reduce Friction In Retail

Uttam Kumar is the engineering manager at American Eagle Outfitters. Retail technology leader. Advocate for seamless customer experiences.

The retail industry is undergoing a significant transformation, moving from traditional, siloed channels to integrated and customer-centric models. Now, customers expect everything to work together seamlessly. They want to click, tap and buy with ease, whether they’re on their phone, laptop or in a physical store. Unified payments make this possible by bringing all payment methods—credit cards, mobile apps, digital wallets and more—into a single, seamless system.

Why It Matters

Today’s shoppers expect a smooth, consistent experience no matter how they choose to interact with a retailer. This is the core idea behind unified commerce: a strategy that blends all your sales channels, data and behind-the-scenes operations into one integrated system. This approach recognizes that customers often move between different channels during their purchase journey and expect a consistent and uninterrupted experience.

A critical component of unified commerce is unified payments, which ensure a seamless and consistent payment experience across all channels. Unified payments are a key enabler for reducing friction and enhancing loyalty in this evolving landscape. With unified payments, customers can pay however they like without delays or confusion. Whether they’re shopping in-store, on a website or through a mobile app, the experience stays smooth and consistent. This cuts down on frustration at checkout, reduces cart abandonment and builds trust.

Driving Loyalty Through Simplicity

Unified payment systems play a crucial role in driving customer loyalty by enabling the creation of personalized loyalty programs. By providing a comprehensive view of a customer’s purchase history and preferences across all channels, retailers can tailor rewards and offers that resonate more deeply with individual customers. When the payment experience is smooth and convenient across every way a customer shops, it boosts their overall satisfaction, makes them feel valued and increases the chances they’ll come back. Loyalty programs are increasingly important for customer retention, and unified payments can significantly enhance their effectiveness.

Unified payment systems don’t just make checkout easier; they help retailers connect better with customers by offering:

• Personalized Offers: These systems collect data from every purchase. That means stores can better understand customer habits and send personalized discounts or deals.

• Automatic Rewards: Customers earn points or perks automatically, with no extra steps or separate apps. It’s simple and rewarding.

• Better Service: With a clear view of payment history and loyalty status, customer service teams can quickly solve problems and offer tailored support.

Cutting Down Friction

At its core, unified payments work by connecting every payment option, from credit cards to digital wallets, into the retailer’s main system. This creates a seamless link between what the customer sees and the retailer’s back-end operations. A unified payment gateway plays a crucial role in this integration by securely connecting all payment solutions to the commerce platform, ensuring robust payment security through technologies like point-to-point encryption (P2PE) and tokenization.

For instance, the Unified Payments Interface (UPI) in India serves as a prime example of a successful unified payment system. Developed by the National Payments Corporation of India (NPCI), UPI is a real-time payment system that merges multiple bank accounts into a single mobile application, streamlining fund routing and merchant payments.

By offering consistent payment options, customers do not need to familiarize themselves with different payment methods depending on whether they are shopping online, in-store or via a mobile app. Unified payments also smooth out the shopping journey by removing common roadblocks:

• Fast, Flexible Checkout: Customers can use their preferred payment method without switching apps or entering details repeatedly.

• Quick Refunds And Easy Returns: Whether a purchase was made online or in-store, returns and refunds are handled smoothly.

• Consistent Experience: No matter the channel, payment information stays synced, reducing errors and delays.

Implementing A Unified Payment Strategy

Implementing a successful unified payment system requires more than just new technology—it demands a thoughtful, organization-wide transformation focused on enhancing customer experience and operational efficiency.

Prioritize delivering a consistent, frictionless customer journey by offering unified payment across every touchpoint. Support diverse methods like digital wallets, contactless payments and buy now, pay later to meet evolving customer expectations.

Start by defining a clear, measurable strategy and road map for payment integration across all channels. Break down gaps between e-commerce, in-store, marketing and IT to ensure alignment and seamless execution.

Select a technology partner that offers a fully integrated platform with a single API, centralized data management, robust security and scalability. Look for features like point-to-point encryption, tokenization and real-time fraud detection, along with tools to streamline operations and reduce costs.

Finally, don’t forget your team. Empower your staff with comprehensive training, and cultivate a culture where continuous improvement is the norm. Regularly monitor performance, gather customer feedback and remain agile to adapt your strategy as market dynamics shift.

Real-World Success Stories

Several retailers have successfully implemented unified payment solutions, demonstrating the tangible benefits of this approach.

• River Island: This multichannel fashion brand integrated Stripe’s unified commerce solutions, resulting in a 3% increase in authorization rates. The implementation also sped up the process of adding new payment methods by three times and led to a 30% faster checkout experience.

• Moss Bros: The leading U.K. menswear brand partnered with Adyen to implement a unified commerce approach to payments. This resulted in a tripling of the conversion rate on their U.K. e-commerce site and a 209% growth in total online revenue.

Final Thoughts

Unified payments are more than just a technological upgrade for retailers. They represent a strategic shift toward creating a better, more seamless shopping experience for customers. By eliminating friction in the payment process and delivering personalized, consistent service across all channels, retailers can foster stronger customer relationships, build lasting loyalty and ultimately drive business growth in today’s evolving retail landscape.

Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?