Editor’s note: Mark Johnson is CEO of Receipt Reliance Pty Ltd, a company formed to promote the idea of digital receipt storage at your bank. Mark has 23 years experience working in the point of sale industry and is an avid financial technology follower.
What’s happening with digital receipts? The answer to that is a lot. The last five years or so have seen an explosion of ideas surrounding the capture, management and storage of digital receipts. There has been a mad rush by startups and merchants trying to capitalise on the enthusiasm typically generated by a new and innovative concept, and it seems, in the process, they have lost sight of the main beneficiary and owner of the receipt – the consumer.
Arguably, the most common strategy for digital receipts at the moment is the email, and retailers have wasted no time taking advantage of consumers wanting to reduce their carbon footprints. Obtaining a consumer’s email address provides retailers with a channel to send additional marketing and promotional material. But they need to tread carefully here as they may foster a feeling of resentment from the consumer, the opposite of what they would like to achieve.
As a European credit-card processor said in an Ernst & Young report, “From a payment perspective the trick is not enriching the shopping experience but making it simpler. If any new solution is not quicker or easier than the current systems it won’t work with shoppers – they’re not engaged enough.”
This sentiment can be applied to the post-payment experience, as well. Any new digital receipt strategy must add value while offering greater simplicity. It should be a frictionless experience for the consumer; if it’s not more convenient than throwing a receipt in a shoebox it won’t fly. Snapping photos of receipts, perhaps managing folders and backups of receipts on a smartphone or PC sounds like a bit of work to me.
Consumer privacy is certainly a factor that will influence the adoption of any proposed solution. Many consumers do not wish to hand out personal information like an email address or mobile number, because they may be exposing themselves to fraud, phishing scams and unsolicited marketing. Consumers need to have one logical place of storage for their receipts. Having to manage multiple user names and passwords depending on what a particular merchant has chosen doesn’t sound that desirable. Email, phone, cloud: Where to look first?
Security matters. For individuals and for businesses, receipts have value. Quite often, loyalty-rewards coupons and offers are placed in the same category of importance as the receipt, which I think is wrong. Coupons and offers are short-term transitory marketing tools, and while they can be mutually beneficial to the consumer and the merchant, they don’t carry the same degree of importance as receipts. There is also an increasing focus on digital identity, and our purchase history contributes to defining that identity. Storing our receipt information safely and securely is a must.
Authenticity of the receipt is important. For consumers to have trust in any solution, something more than just the generic receipt data must be stored, otherwise it may not be able to be used for warranty and tax purposes, and of course merchants will want to retain branding to personalize their digital versions.
So what might be the future for digital receipts, given that ultimately it will be the consumer driving the adoption of any one particular solution? Well, if you think about it, the receipt is, in many ways, an extension of the payment transaction itself — a more detailed version. Why not store it against that? I’m sure there would be a huge show of hands if I asked how many times anyone has looked at their bank statement and wondered about the details of a particular transaction; whether it is an unfamiliar business name or just wanting to be reminded of what they bought at the hardware store a few weeks back. Accountants spend countless hours trying to marry the two together – why not have it done automatically?
Consider a solution whereby, at the point of sale, a digital version of the receipt is transferred along with the payment transaction to your bank or financial institution. Consumers would have one place for all their receipts and could access them by simply logging in to their bank account via PC or tablet or maybe a digital wallet on their smartphone.
Fraud detection would be improved along with providing a greater opportunity to automate and enhance the functionality of personal financial management tools. This solution goes hand in hand with payment-capable wearables that are becoming increasingly popular. It would also be a welcome aid to business-expense management.
Now and again I read an article about digital receipts and it seems that one of the main stumbling blocks to a more innovative, consumer-oriented solution is that retailers, under no circumstances, wish to part with their POS data to a third party. While this is understandable for a number of reasons, I think that ship has sailed. There are a multitude of companies offering to scan inboxes and organize that clutter of receipts for consumers, and other companies offering to extract the data off paper receipts or photos of paper receipts (hardly a green step, by the way) using OCR technology.
These companies are getting receipt data every day, albeit via a very manual process. With the solution outlined above, there is no need for anyone else to be involved other than the three entities already part of the process: the consumer, the merchant and the bank.
Banks are a trusted partner for both consumers and merchants. Just as account holders’ financial information is private now, so their receipts would be, too, and from a merchant perspective this would be a comfort knowing that the information will be unavailable to their competition.
Ubiquity is the key, and while this is a global solution, it allows for the distributed storage and management of receipts via each individual’s own bank, eliminating many risks associated with the idea of one central receipt storage platform for everyone.
Whether you’re local or traveling abroad, if you use a credit or debit card to make a purchase, the transaction always ends up back at your bank or financial institution, and with this solution implemented, so would your receipt. You could rely on it.
This digital receipt solution has no more moving parts than existing payments systems from the consumer’s perspective. All the work of capturing the digital receipt is done seamlessly behind the scenes. A vastly improved experience compared with current offerings.
To implement this solution, a collaborative effort would be required by several players in the payments space, and while it may not be as simple as it sounds, collaboration within the payments industry takes place every day. Increasingly we are seeing older, well-established institutions outsourcing for innovation and development in order to stay relevant. The method and rails are already in place for the payment transaction — this is just adding some extra data to a proven process.
The digital receipt market is evolving rapidly; scanning and bureau-style systems are now giving way to more innovative approaches, but we’re still not there. At the end of the day, customers and merchants are looking for a simpler, more efficient experience at the POS both for the payment process and for receipt issuance. For digital receipts, I think this solution fits the bill.