Mobile Payments Today: July’s best reads
Digital. Digital. Digital.
That was the theme on Mobile Payments Today in July as three of the month’s most-read articles focused on some aspect of digital banking or digital payments.
The most-read piece last month focused on how banks could get consumers to use mobile payments more, which ties into the digital banking area. Rachna Ahlawat from Ondot Systems suggested banks give consumers more control over the cards stored in digital/mobile wallets.
“Financial institutions need to offer real-time visibility, additional controls and security to build consumer confidence and trust in payments,” she wrote. “To deliver this, there are card controls available to financial institutions, processors and mobile banking providers. Users of card control and alerts applications learn to interact with their cards using phones as a remote control.”
Rounding out the top five stories in July are pieces about India and its push towards a cashless society; the digital retail wallet; why digital banking is more important than ever; and a recap of Money20/20 Europe.
5. “India’s march to a cashless society begins with 3 things” — Demonetization in India is a policy of extraordinary scope and ambition, combining advanced solutions in identity, mobile and payments to revolutionize commerce and financial services across the nation.
In an unscheduled televised appearance on Nov. 8, Indian Prime Minister Narendra Modi announced that 500 and 1,000 rupee notes (which accounted for 86 percent of all currency) would be removed from circulation overnight.
The purpose of this demonetization policy was to promote fiscal transparency, modernize a complex, cash-centric economy and empower social inclusion.
As one would suppose, the impact of such a radical, unexpected approach was immediate and profound. Cash accounted for 90 percent of all transactions, so the early days of demonetized India were defined by queues at ATMs and an economically damaging liquidity crisis.
With liquidity stabilizing and a more certain picture emerging, however, it is clear that identity, mobile and payments are increasingly converging to meet the challenges of the Indian digital economy.
4. “The digital retail wallet: 5 reasons it makes sense” — The retail landscape is evolving rapidly as emerging technologies and trends are changing expectations of the in-store experience. As retailers look to find their place in this brave new world, many are now seeing payments as an opportunity.
The retail landscape is evolving rapidly as emerging technologies and trends are changing expectations of the in-store experience.
As retailers look to find their place in this brave new world, many are now seeing payments as an opportunity.
With 92 percent of U.S. retailers expecting to maintain or increase investment in payments over the next 12-18 months, we explore the five major reasons why digital wallets makes sense.
3. “Digital banking: What was once a differentiator, is now a commodity” — Despite the predominance of digital banking, there’s evidence customers are growing less satisfied with their digital banking experience.
The data are clear: Digital banking is hugely popular, especially among younger consumers. Research shows 71 percent of millennials believe it’s “very important” to have a banking app, 51 percent have made a purchase through a mobile website or app in the last month, and 27 percent have used their phone to make a payment in store.
But despite the predominance of digital banking, there’s evidence customers are growing less satisfied with their digital banking experience. While the majority may be satisfied overall, there is a definite downward trend in how consumers view their banking experience.
This is a fraught area for financial institutions. An intuitive and engaging digital customer experience is no longer a luxury, it’s an expectation. Meaningful functionality within an app or mobile site is now table stakes: what was considered advanced functionality just a few years ago is now the standard. Banks and other financial institutions no longer compete on the stability of their organization, but on the capabilities of their software and the user experience of their mobile app. To stay on the digital vanguard, and gain and retain customers, banks need to design their digital offerings with six requirements in mind.
2. “6 key themes from Money 20/20 Europe” — Mobile wallets, security and Alipay were just a few of the many discussions that took place at the recent conference in Copenhagen.
After a frantic few days in Copenhagen for Money 20/20 Europe, I’m finally back at my desk. The flight home gave me a bit of time to digest the discussions and presentations and, amid the melee and company announcements, a few themes stand out.
The majority of industry folk now admit that wallets are not where we wanted or expected them to be. Adoption of the ‘Pays’ is happening, but it is painfully slow.
Take me as an example, I have Apple Pay, Android Pay and Samsung Pay on my devices but, more often than not, tap my contactless card. And I’m a self-confessed payment geek.
The crawling pace of adoption is bringing discussions on ‘value’ to the forefront again (I know, I know…).
Many (including myself in previous lives) have been banging the value-added services drum for years, but now is the time where it can actually make a difference. The ‘Pays’ are out there, user experience is getting more seamless, more banks are signing up – they just need a reason for consumers to use them and payments on their own are not a sufficient driver. Rewards, in-app and online payments, offers, transaction notifications; these are the things that will change consumers’ habits and we’re about to see a lot more of them on offer.
1. “Want to increase mobile payments? Give consumers more control over their cards” — While mobile wallets make it possible to manage several cards in one application, the challenge facing financial institutions is becoming the default card option within mobile wallets and payment applications.
The banking and payments industries are in the midst of a two decade-long migration from physical banking to mobile. Just as internet commerce has given way to mobile commerce in the retail world, banking has quickly progressed from in-person branches to internet banking to today’s mobile banking surge.
The Federal Reserve reports that 53 percent of smartphone users now engage in mobile banking, with that number spiking to 67 percent for millennials.
The next natural step from mobile banking is the embrace of mobile payment apps and mobile wallets like Apple Pay, Android Pay, Samsung Pay and others. These mobile wallets make payments for consumers faster, more secure and cheaper. And while mobile wallets make it possible to manage several cards in one application, the challenge facing financial institutions is becoming the default card option within mobile wallets and payment applications.
One area card providers have seen tremendous success in increasing card adoption is by providing consumers mobile-based management of their payments. Consumers like the feeling of being able to control, manage, receive notifications and instant digital interaction with their banks. All of these can be done with a smartphone and fingerprint authentication.