Last updated: 12 November 2015
The FinTech revolution has arrived, placing simple, intuitive services right into the hands of everyday consumers. If we look at the financial services sector, the past few months have seen digital only banks like Atom, Mondo, and Fidor start to gain real traction. McKinsey recently forecast that 60 percent of global retail banking profits, amounting to $1 trillion, is under threat by these new entrants.
This same picture is happening across telecoms, retail and many other industries. These new services are succeeding because they deliver an exceptional mobile experience that speaks directly to what consumers want.
The ability to make mobile payments is a real differentiator and as consumer awareness grows (over half of people in the USA now know you can pay by mobile according to Accenture), firms face a stark choice; either begin thinking about mobile payments now, or face being left behind.
We know that deploying a mobile payment ecosystem is no simple undertaking, so here are some guiding principles that can help inform strategy. These have been designed with banks, telecoms operators, device manufacturers, payment networks, retailers and Over-The-Top (OTT) players in mind.
- Know the key issues around mobile payments
This varies from sector to sector, but brand considerations are universal. Protecting consumer trust remains vital, and working out how to keep customers returning to your platform (or stickiness) will always be a key concern.
Banks and payment providers will invariably have fraud top of mind, while telecoms operators will be wary of being perceived as a ‘dumb pipe’. OTT players may struggle to prove their security credentials, and have no access to the end-user mobile hardware, potentially making their service less comprehensive.
- Uncover the strengths and assets to promote
Banks have the heritage of putting innovative technology, such as contactless EMV cards, directly into consumers’ hands, and being trusted to manage millions of customer credentials. Plus they have multiple customer touch points both on and offline. Payments providers can play on the fact their technology underpins the entire payment process.
Network operators are similarly in a strong position, seen by the consumer as the natural fit for mobile payments given the existing billing relationship.
Device makers meanwhile have the brand cachet that few can match, with consumers used to the technology and open to trying out new features. Retailers can build on this to fold in loyalty and coupon programs to their offer.
OTT services can sit across any platform, including social media. This gives them the chance to really dig into consumer analytics and use that to convince other partners across the industry to engage with their services.
- Identify your goals and expectations
Deploying a mobile payment solution can have a positive effect on a brand’s visibility and reputation. It also lets a brand begin to offer more services to customers than before—things like loyalty, price comparisons, partner promotions, and cross-selling of your own products and services.
There is also scope for greater collaboration. Banks and payment providers can strengthen their existing relationship to increase security and offer a seamless customer experience. Retailers, networks and device makers can all partner together to give consumers a much richer variety of services.
Once these aspects have all been considered, a brand will have to figure out the technical questions of how to deploy the mobile payment service. If you’re interested in learning about particular routes, you can download our new report into digital payments here.
If there’s anything you’d add to our thinking, do get in touch, either in the comments below or on Twitter @GemaltoMobile.