TD Bank retail leader talks payment innovation, POS transformation

One of the most transformative customer experiences is happening at the point of sale — retail consumers are tapping and swiping more than ever compared to handing over cold hard cash.

A driving force is the innovation taking place in retail payment as the cashierless storefront slowly takes root and young shoppers don't want to be bothered with even the credit card transaction time.

Retail Customer Experience reached out to Mike Rittler, general manager of retail card services and personal lending at TD Bank, to get his perspective on retail POS, trends, consumer expectations and the retail purchase experience.

Q. From what you're seeing in the retail industry, is this a time of big transformation around the POS experience?
A. Looking at the retail landscape, the POS experience is certainly going through a transformation. Whether consumers shop at a small boutique retailer or a national chain, the POS experience is evolving to become more seamless for the customer. Transactions are becoming faster and, in an effort to bolster the customer experience, can now happen throughout the store thanks to mobile POS systems, not only in the checkout line.

Changes in the payment space are fueling this POS transformation, as contactless cards, mobile wallets and payment apps are now viable payment options available to consumers. Although adoption and usage of contactless payments has been initially slow in the U.S., financial institutions are now issuing more contactless cards to consumers. According to a recent Forbes article, Visa alone has issued 100 million Visa-branded contactless cards into the US market. Meanwhile, a survey from 451 Research found that three out of four millennials — a purchasing group on the rise — said they would likely use a contactless card provided to them by their bank. As a result, there's an increasing demand for POS systems that can handle contactless payments in 2020.

As the POS experience aims to becomes faster, easier and more convenient for customers, financing — an increasingly utilized option for large purchases — is also changing to keep up. Because financing is such a big piece of the sales process for many retailers and customers, the demand is increasing for the financing process to follow suit and become speedier and more seamless. The advent of waterfall financing offers retailers the ability to connect customers with multiple providers to find the right financing fit for them. For customers, this process is seamless, as applications are sent and eventually approved within seconds.

Q. Many retailers are enhancing, upgrading, even replacing POS systems to get more insight/data as well as drive a more seamless experience – for retailers just starting on that journey what are some initial steps or strategy for assessing if your POS is doing all it should be doing?
A. As POS systems continue to update and advance technologically, companies should be using the point of sale as an opportunity to get to know their customers better.

Retailers assessing their own POS system should take inventory and ask themselves: Is their POS system just a way of taking payment? Or are they utilizing the point-of-sale to get to know their customers, target their advertising, build loyalty, engage with their customer base and customize their offerings?

The ability to stay connected to customers is important, especially as POS systems themselves are changing and the idea of "checking out" is slowly evolving. If a retailer's current POS system isn't doing all of the above, it may be time to consider a change.

Q. On the other end, many retailers are ignoring the POS experience in fear of costs, labor, etc. What are some misconceptions retailers often have when it comes to POS enhancement and improvement?
A. Those who don't see the value in data, speed, efficiency, or creating customer contact lists from their POS system should understand that over time, it'll become more difficult for them to engage with their customers.

Some retailers may drag their feet to modernize their POS systems under the assumption that it'll cost too much to update and then service. They may also be hesitant to over-rely on technology over personnel, or they could just be resistant to change in general.

But the fact is, increasing the use of digital payments reduces the time spent dealing with cash, which can cost sellers a percentage of sales.

Employees can also perform more transactions every hour thanks to the utilization of digital payments. In the end, a faster, seamless checkout experience will likely result in an enhanced customer experience.

As POS systems continue to make the checkout experience quicker and pain-free, retailers who don't keep up may eventually take longer to process transactions and provide service to customers compared to their competition. In turn, this can erode the confidence of consumers — it only takes one bad check-out experience to lose a customer. The cost to update should far outweigh the long-term risk of losing customers by not doing so.

Not only could customers lose faith in retailers who fail to update, but these retailers also risk losing communication with their customers without a reliant and efficient POS system to maintain their consumer information.

Q.There's a growing wave of mobile POS and even cashier-less POS — where, in your view, do these stand in retail right now?
A. Mobile POS systems and cashier-less POS experiences are slowly gaining traction in the retail space. Thanks to mobile POS systems, the idea that a sale can now happen anywhere in the store has the potential to render the idea of a check-out line altogether obsolete. Sales are even being completed outside of stores now due to the integration of mobile systems, as some retailers offer drive-up pickup.

Retailers should seek to keep up and evolve with these changes, because although adoption may feel slow at first, once new systems are proven beneficial to customers and to increase speed and sales, their presence will grow exponentially.

As new POS systems continue to slowly gain traction, retailers should ask themselves: How will they interact differently with customers when there's no end check-out? And how can they keep customers engaged if there's not a person there ringing them up?

Q. What do you foresee or predict way down the road with the retail POS experience — will it eventually come down to consumers never having to have a wallet of any form?
A. As the POS experience continues to change, the idea of carrying a physical wallet that holds your cash is also shifting. Although a physical wallet that we fold and keep in our back pocket very well may go away, the concept of a wallet — as a place where your purchasing power resides — will not. Whether consumers are paying with their phone or a smartwatch, the idea of a wallet will always remain in some way shape or form, even if the vessel itself changes with the times.