The magic of mobile payments is not to include the functionality of a plastic card in a smartphone. It is not about processing transactions, it is about offering options, convenience, control and value wrapped in a convincing and perfect digital experience. Not only at the point of sale, but throughout the digital path that users follow when making a purchase. The stages of this value proposition are important for consumers.
An evolution of value
Think about the evolution of mobile payments for a moment. By enabling consumers to deposit checks remotely in 2009, remote data capture technology introduced a new level of choice, convenience, control and value. Since then, mobile check deposits have skyrocketed. A leading software provider reports that its mobile deposit solution has processed more than 2 billion checks, saving consumers more than 830 million hours.
Despite this encouraging outlook, consumers feel very different about the mobile payment applications of some retailers. Coffee vendors have had phenomenal success enabling payments through mobile devices. Its application is the most popular, and industry observers expect it to remain that way until 2022. Today, 30% of the company’s transactions are mobile payments.
This success is not just because people can not live without their favorite coffee. The business knew from the beginning that the combination of rewards and experience, not the transaction, is equal to the value in mobile payments. The application is full of convenience features and links to loyalty programs that make it a simple option for coffee lovers to pay with their phones. In addition, you can continuously improve the experience with consumer information that you collect from users.
This is just the tip of the iceberg
Studies indicate that 4% of all retail transactions in the United States are made through the mobile phone. In China, it’s 20%. Platforms like Alipay have more than 500 million monthly consumers and 100 million daily transactions. This is a window to the future of the adoption of mobile payments in neutral continent.
Consumer Controls: Major credit card companies are adding features to their mobile applications that give consumers new control over account security if their card is lost, as well as payment plan options for qualified purchases.
Rewards financed by the merchant: Integrated rewards financed by merchants, increasingly common in consumer goods, encourage consumers to buy with value-added offers and connect consumers, merchants and suppliers in new ways.
Less rewards, more reward: All too often, the rewards focus only on the traditional “spend and get” and not enough on the “reward” of recognition, experience or exclusivity. Digital is opening new avenues to go beyond points and reward loyalty with meaningful and highly cured experiences.
Cross-border payments: Imagine if travelers could know the costs of their trip before taking it, avoiding confusion about exchange rates. An integrated rate calculator could essentially provide a currency blocking solution that would provide travelers with a superior experience.
Secrets to get ahead
Another fundamental aspect is finding the optimal way to take advantage of Fintech technology: formulate and answer the important question of compilation and purchase for future investments in development. Why reinvent the wheel? As Fintech’s suppliers proliferate, success will be achieved thanks to the ease and seamless integration (or merger) of Fintech into the platforms and service offerings of the payment companies. This merger is critical, and requires a robust integration layer. Essentially, a business-to-business version of the app store.
Finally, any organization that has a leadership in the mobile payments market must carefully analyze its technological structure and its development methods. It will be increasingly important to cultivate world-class agile development capabilities to work at the pace of innovation. This is key to the way digital disruptors experience, iterate and launch products in a test-learn-modify model. By decoupling data and applications, enterprises can free themselves from the bottlenecks of the legacy system and get the IT agility they need to compete.