Friday, February 16, 2018

Why A Global Standard For Digital Receipts Is Required
By Mark Johnson (@ReceiptReliance)

In most countries around the world, the standard practice for issuing itemised receipts is for merchants to produce a piece of paper with detailed purchase information on it and then give it to their customers. Simple. It can be hand written or machine printed, basic in design or elaborate, monochrome or colour - it doesn't matter. The procedure is the same.

These days most people would agree that digital receipts are the future. However, the term 'digital receipts' has become a bit of a catch-all for many different types of solutions. This begs the question: how do we go from paper to digital without turning a relatively simple process into a complicated one for consumers and merchants?

Well, agreement on a standard would be very useful.

I'm not suggesting uniformity with regard to the appearance of receipts; I think control of that should be left to each individual merchant. Many will be keen to reinforce their brand via consistent visuals.  

Rather, I'm talking about a standard in relation to what we do with digital receipts when they are created, and where we store them.

For some time now I've been promoting a solution whereby a digital receipt is created at the point of sale, it is linked to the associated payment transaction, and then made available to consumers via their online or mobile banking applications.

This TechCrunch article provides more detail. Connecting the payment transaction and the itemised receipt at the point of sale makes sense for many valuable reasons.

·     the payment transaction records the total cost for a purchase; the merchant receipt records the list of items that comprise that purchase. Two sides of the same coin.

·      both are generated at the time of sale, but then they are separated; the payment transaction is sent to our bank while the merchant receipt is given to the customer, who may then need to reconcile them again for expense claims or tax purposes. Matching them up can be an onerous task and not without error, and it does make you wonder why they are still being separated in the first place.

While consumers have control over where they choose to store their paper receipts, or photos thereof, they don't always have that luxury with the digital version. Mostly, they are at the mercy of whatever solution merchants choose, so that could mean their email inbox, a cloud account (per merchant), or perhaps their smart phone. If it's their phone, that could mean a specific digital wallet, any number of merchant or receipt apps, or maybe a sms.

Given the variety of locations they might be sent to, finding and/or consolidating digital receipts could become quite a task for consumers. Replacing one, simple, practice with a multitude of different ones adds complexity to receipt management. It is not going to make our lives easier, which is one of the main aims, isn't it?

If we had a global standard for digital receipts there would be consistency across the shopping experience for consumers. We could make a non-cash payment for a purchase almost anywhere in the world and have full confidence that an original, authentic, intact digital receipt from the merchant, will be available to us via our online or mobile banking applications.  

A standard would level the playing field for merchants. In my experience most are very interested in offering digital receipts to their customers, but are hesitant to dive in just yet. Some reasons for this include concerns not only about cost, data security, and customer privacy, but also product selection; they're unsure which one will serve them best in the long run. We were met with keen interest and received some great feedback when describing a 'point of sale to customer bank' solution. In addition to acknowledging many advantages for themselves, most said that they think their customers would love it.

With the onset of Open Banking , we are seeing a lot of innovative development taking place, some of which is focussed on applications that will provide consumers with an aggregated view of their finances. Dashboards displaying accounts and transactions from different banks on the one screen are giving consumers a much better picture of what's happening with their money. Imagine then, if it were standard to have receipts attached to transactions; the receipt could be sourced at the same time a transaction is pulled in - easy! Currently the ability to do this is somewhat hampered due to the myriad of receipt storage locations, some accessible and others not so much.

A recent article from Acuity featuring discussions with Chris Jordan FCA, Commissioner of the Australian Tax Office, provided a look at how the ATO has been travelling over the past few years, and what areas of innovation it might cross paths with going forward.

From the article - "Jordan has always spoken enthusiastically about technology’s potential to ease small business interactions with the ATO." saying that it will inevitably lead to "a future where more businesses can tie their accounts directly into ATO systems."

It would certainly be convenient if it were standard to connect receipts to transactions.
Chris Jordan goes on to say, If we can tap into natural systems so that small businesses can comply with their obligations without doing anything special, that’s a great outcome..

A digital receipt standard could be backed by regulation to ensure compliance and quality control. In my view, such regulation should have a primary focus on the following:

·   Privacy of the consumer - based on an acceptance that the receipt data is owned by the consumer and can be shared or utilised as they see fit.

·   Integrity of the data - must be assured from the point of creation through to transport and then storage.

·   Electronic payment system policy - regarding payment system participants' provision for and handling of receipt information, when payment system infrastructure is being utilized.

To assist the adoption of a standard, I think it's important to keep the approach as simple as possible and to stay focused on the core proposition of simply delivering digital receipts to consumers. It's easy to get distracted with value adds which can introduce unnecessary complexity and might even end up having the opposite effect to what was intended. Our informal discussions with merchants provided useful insight backing this up. For example, incorporating loyalty features as part of the minimum package can in some cases be a deterrent; some already have successful programs in place while others are just not interested, preferring to encourage customer loyalty through keen pricing policies.

In order to shine through and become a global standard for digital receipts, the successful solution will have the following attributes:

·   Consumer -first approach
·   Seamless in operation
·   Privacy of the consumer ensured
·   Convenient access from consumer standpoint
·   Integrity and security of the data ensured
·   Reliability
·   Payment method/device agnostic.

Natural selection has begun for digital receipts with many early solutions giving way to those more popular in the marketplace. Some factors contributing to their lack of success might include the requirement for consumers to share personal information, added friction at the checkout, additional cost to merchants, or perhaps because the solution was device specific. Whatever the reason, surviving solutions continue to evolve and new ones continue to arrive.

I think it's only a matter of time before we start to see the emergence of a standard and it's interesting to note a shift in direction towards financial institution involvement. The past few years have seen ongoing efforts by banks and ADIs to provide enhanced transaction detail to their customers, and for purchase transactions, there is really no better source of detail than the itemised receipt.

A digital receipt standard will have far reaching benefits for all of us. As technology improves, so too does the opportunity for stakeholders in the banking, payment and retail space to further engage with one another to accelerate this natural evolution.

 We welcome your feedback, suggestions, comments and/or support.

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