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Invisible transaction technologies set to take off and change payments

Retail transactions processed through “invisible payments” technologies such as Amazon Go will increase eightfold in value in the next five years, according to a study by Juniper Research. So-called invisible payment technologies are expected to process $9.8 billion-worth of transactions this year, a figure predicted to increase to more than $78 billion by 2022.

However, the report, Future In-store Retail Technologies: Adoption, Implementation & Strategy 2017-2022, found that the cost and complexity of building the infrastructure to enable invisible payment systems will constrain deployments in the short term.

What are invisible payments technologies?

Two of the leading invisible payment products are Amazon Go and Android Pay. Amazon Go is currently in pilot stage. It uses Just Walk Out Technology, which automatically senses when a product is taken off the supermarket shelf and put into the shopper's basket (or replaced if the shopper changes his/her mind). The technology keeps a tally of the products selected and when the shopper leaves the store – without queueing up and seemingly without paying – Amazon charges his or her Amazon account and sends a receipt for the items bought. The technology uses computer vision, sensor fusion and deep learning and is still in pilot phase – currently only Amazon employees in the company's beta programme are using the Amazon Go store in Seattle, US.

Google's Android Pay, on the other hand, is less ground-breaking than Amazon Go – it allows shoppers to make in-store purchases through their smartphones using near field communication (NFC) technology, but they still have to queue and physically hold the phone near to the payment terminal. Google launched a bolder system last year: the Hands Free app used bluetooth, wi-fi, location settings and facial recognition technology on the customer's phone to enable payment when the person entered a participating shop – but the application was shut down in February 2017.

Frictionless payments set to take off by 2022

The study by Juniper research shows that the practical use of applications such as Amazon Go will reach over 5,000 retail outlets over the next five years (today they are used in just a handful of outlets) as retailers seek to make consumer experiences frictionless and more engaging. Juniper added that “the number of consumers using checkout apps, which allows them to scan their own shopping, will grow from just under 4 million to over 30 million in the same period.”
Juniper Research also estimates that these technologies will drive an average increase in revenue of over $300 per shopper per year by 2022.

CTMfile take: These payments technologies are revolutionary and they also include automated inventory checking and frictionless retail experiences. Admittedly they remove the human interaction with a cashier, which some shoppers may value and others be glad to see the back of. Perhaps crucially, the study suggests they could increase customer spend by an average of $300 over a year. This has big implications for payments, inventory and supplier-relations in the supply chain.

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This item appears in the following sections:
Payments - Receipts at POS
Collecting Payments on the Internet
Collecting Payments via Mobile
Payments - Disbursements
Paying Suppliers
Working Capital Management
Inventory Cycle in WCM

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