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Cards & Mobile Payments

While businesses organise themselves to benefit from the reduction of interchange fees, changing customer demands, new platforms, and increased competition from challengers, one thing is clear: payment processing is becoming a commodity. As the industry becomes more commoditised, services have to be added on top of payments to provide additional value to customers and businesses.

 

We are living in a world where cash is no longer king. Mobile payments is an explosive market with acquisition activities and new entrants indicating that consumers are embracing the rapid growth of mobile. They are opting to make in-store mobile payments with a smartphone (or through wearables such as a watch or bracelet) and very soon may be using their fingerprint for authorising the transaction rather than using card or cash. The internet of things will only further this disruption. Clever companies will begin to consider how they can add value by partnering with retailers to store loyalty and rewards cards to the digital wallet in order to provide an integrated offering.

Customers want to be able to manage their financial data whilst on the go, make real time decisions quickly and securely and move money using any device, network or channel they pick. They want to be able to start transactions in one channel and complete it in another. With consumers expecting consistent service across all channels, banks need to streamline their processes to develop a truly omni-channel approach. They will be rewarded through better customer intelligence, a single view of the customer, and a clearer idea of what they need.

So whilst banks focus on creating these new business models to ward off competitors, it is important that they recognise the sheer volume of data they have at their fingertips. It will provide them with the advantage they need in the digital payment processing space.

Cashless experiences and mobile payments are gaining popularity, but there is still a lack of standardisation and hesitations around security. This has stunted the development of mobile payments and near field communications as consumers must constantly familiarise themselves with new technology, installation procedures, user fees and processes for different regions and countries. As such, the industry is crying out for a ubiquitous solution. Whilst platforms such as PayM in the UK have succeeded in establishing links with the leading high street banks, an endless stream of alternatives prevents it from dominating the market. With the future of payment changing swiftly, it is imperative that businesses pick the right approach to payments infrastructure if they want to compete.


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