How the cloud changed the way Diebold Nixdorf approaches payments

As retailers embrace a broader range of digital services, hardware and software makers like Diebold Nixdorf are responding to pressure to adapt to a world in which payment devices are no longer central to how people shop.

Diebold Nixdorf this week launched Vynamic, a new cloud-based retail payments and management service that's crucial to its pivot toward quick-hit updates that merchants can perform remotely.

"Customers don't think of channels, we need to connect different touchpoints,'' said Bernd Kraus, vice president of retail software at Diebold Nixdorf in Munich, Germany during a Diebold Nixdorf virtual event to discuss and promote the new offering.

The shift to digital and omnichannel commerce is compounded by advancements in consumer technology, such as Apple's move to allow iPhones and potentially other devices to accept contactless payments without communicating with any additional point-of-sale hardware. With less need to buy dedicated hardware, companies like Diebold Nixdorf and Ingenico must showcase how they use cloud hosting and software to add features on the fly.

Outside the box

The Vynamic bundle combines consumer experiences such as shopping and payments, as well as back-office operations and store management tools for categories such as grocery, fashion, and convenience retailers. It supports checkout, and cross-channel marketing, loyalty, promotions and other incentives supported by real-time data.

Management functions tied to Vynamic include inventory, point-of-sale configurations, reporting and online order fulfillment. An additional software module called CPaaS (country package as a service) provides access to Diebold Nixdorf's cloud repository as a single source for legal and fiscal requirements in more than 60 nations.

Point-of-sale marketing and e-commerce silos can maroon data in different systems. The cloud can unlock insights in these data sets, according to Keith Mercier, San Francisco-based general manager for worldwide retail and consumer goods at Microsoft, Diebold Nixdorf's cloud computing partner on the Vynamic project during the virtual event.

"A change is always challenging," said Michael Schulte, the Biele, Germany-based vice president of product management retail software at Diebold Nixdorf, during the virtual event. "Retailers need to adapt frequently to their customers and consumer demands."

Traditional software options are still very much siloed, Schulte said. "That doesn't mean they are bad. But they aren't open. They are closed and standalone boxes. They hinder innovation."

By making technology open and modular via open application programming interfaces, retailers can target specific portions of their technology for improvement rather than swap out full systems, Schulte said.

Diebold Nixdorf positioned the launch of Vynamic as a way to serve a blended online, mobile and brick-and-mortar retail environment in which payments will be handled in the background.

"You feel like we're in between worlds before and after the pandemic. The dust didn't settle," said Steven Van Belleghem, author of "The Offer You Can't Refuse" and an expert in customer experience, during Diebold Nixdorf's virtual event.

"Business and customers are still searching for new routines is one of the biggest opportunities in retail history," Van Belleghem said. "We can actually shape new routines, you have a window of six months or a year or two years before we have a new rhythm going."

An industry transforms

Apple recently announced it would support payments between consumers' contactless cards or mobile wallets by tapping against an iPhone. It's a move that could greatly reduce the need for payment hardware. But since Apple is not providing full payment processing, there is an opportunity for hardware companies to build merchant services to fill gaps left by Apple while addressing the fading need for point of sale hardware.

Ingenico, for example, is pushing its Axium product line, which uses Android's operating system to support payments in addition to buy now/pay later and other value adds that are attractive to retailers. Axium is live in Europe and is in testing in North America, and Ingenicl plans to move much of the technology underneath Axium to the cloud, reducing the need for a point of sale card reader.

"Our solutions provide the necessary flexibility for our retail customers to design the best journeys for their customers, whether that means integration to traditional payment terminals or to newer, more digital and contactless payment mechanisms, such as Apple’s Tap to Pay solution," said Arvin Jawa, vice president of global retail strategy and retail Americas, for Diebold Nixdorf.

The pandemic has accelerated merchants’ moves into omnichannel commerce, meaning that they enable customers to transact in-store, e-commerce and via their mobile devices.

Most national retailers started with physical stores, then added on e-commerce and most recently mobile. said Don Apgar, director of the merchant services practice at Mercator Advisory Group in Indianapolis. E-commerce sellers are on a similar journey, finding ways to sell to customers in new channels, Apgar said.

"Apple’s iPhone contactless payment move is a huge boost for more efficient, more secure, and less expensive mobile payment transactions for both processors and merchants," Apgar said.

Since Apple is not acting as a full payment processor, the challenge the merchants have is leveraging data across different channels to create a seamless experience for the consumer, Apgar said.

Merchants have spent millions to support an omnichannel solution, but new products like buy now/pay later and cryptocurrency have sent merchants back to "square one" according to Apgar.

"The platform Diebold Nixdorf is launching is not just an inclusive and connected platform, but one that is architected to facilitate the addition of new service layers in a merchant’s payment stack," Apgar said.