The Cartes Secure Connexions took place in early November in Paris. The emergence of the connected mobile consumer was a key trend discussed throughout the entire three-day conference. As the world has become more integrated and more interconnected, it has created great shifts in a number of industries, including payments. Traditional payment players now find themselves competing against payment entrants while all players try to determine how to most effectively leverage these emerging technologies in their business today. And along the way, the traditional shopping and payment experience is being turned on its side.
Below are four key takeaways from the conference:
The emergence of the connected consumer
Smartphones are projected to account for two out of every three mobile connections globally by 2020, according to a report by GSMA Intelligence, the research arm of the GSMA association that represents mobile-related companies. In the US, for example, there are 196.8 million smartphone connections as compared with 152.9 million US Postal Service Office delivery addresses.
Connected devices and the mobility of consumers are the new norm. These technological advances have forever altered the way that consumers interact with products and services. Generations of what the world has known about the consumer shopping experience is no longer relevant. Mobile, in particular, has created fundamental shifts in the way that consumers think, shop and interact with brands.
The fact is that the mobile phone is the most disruptive force yet unleashed on the once relatively linear path to purchase. Its always-on availability is transforming predictable consumer journeys into dizzying twists and turns. It’s how companies will connect with consumers of tomorrow. It’s how consumers of tomorrow will research the products that end up in their homes. As a result, payment players, retailers and CPG brands are revisiting old-school strategies that are no longer effective in this era of hyper connectivity.
Unlocking the omnichannel potential
The shopping experience is drastically different than it was just 10 years ago. Consumers have always wanted —and still want — to have better selection, better pricing and better service from their retailers of choice. What has changed is that consumers of today increasingly know what they want, who has it and what it costs at a competitor thanks to the smartphone in their pockets.
What has begun to emerge from these technological shifts is an omnichannel shopping experience. Consumers want to buy online and return to the store. For example, it is becoming more commonplace for a consumer to order three different pairs of shoes or shirts all at the same time online, but in three different colors. Instead of the dressing room being location at a bricks-and-mortar outlet, consumers are using the comfort and privacy of their own bedrooms to try on different clothes. Consumers also want the flexibility to buy online and pick up in the store. In fact, the rise of this click-and-collect concept that has been a big factor in driving internet-based purchases from computers, tablets and mobile devices in the UK.
This new omnichannel experience has ushered in a new set of consumer expectations that companies of all types are still tackling. Consumers want a distinct experience from the brands they use. Consumers expect an enhanced and consistent experience across all devices. Consumers want retailers to know their likes and dislikes and to send customized offers and information based on those details. Competing in this new mobile-driven world is about the company knowing just enough about the consumer in order to send the right message to the right person at the right time.
Payment entrants: Friend or foe
As more money goes mobile, we are seeing more and more companies vying to play a role in the fast-expanding mobile payments landscape. Traditional payment companies, such as Visa and MasterCard, now find themselves competing against unconventional player players. These new players may include the likes of mobile phone operators, retailers, tech titans and tech start-ups. These changes have left many traditional payment providers questioning whether these payment entrants should be considered friends or foes.
While these payment entrants have attempted various routes to market, few have truly disrupted the traditional payment network. Many alternative payment systems have been introduced to the market, but to date most layer over the traditional payment rails and thus do not siphon revenues away from card issuers and operators. That being said, these payment disruptors should not be discounted as a potential threat moving forward, especially if they can successfully circumnavigate the traditional card payment rails via the lower-cost EFT network, for example.
Ultimately, friendship in the payments industry is about money and the processing fees a provider might win or lose based on a competitor’s entry into the market. In the mobile payments industry, specifically, friendship teeters on the selection of the platform’s funding mechanism.
Instant issuance is a must in this new mobile-centric world
In today’s world where consumers have nearly everything at their fingertips, instant responses to card inquiries matter. In order to acquire new and retain existing consumers, financial institutions must have the ability to issue cards instantly. The two weeks it previously may have taken financial institutions to issue a new card won’t suffice anymore.
While retailers have been able to do this for years, card-issuing banks are newer to this world of instant issuance. Today there are two primary instant issuance scenarios emerging. Either the customer goes into a physical bank branch to open an account and receives the card on the spot or the customer applies for a card via the bank’s website and then picks it up at the nearest bank branch. Of course, there are several benefits to being able to instant issue a card, including improved customer satisfaction, enhanced security, reducing card processing costs, quality assurance and finally generating transaction volume immediately. John Ekers, chief information officer at ABNote, estimated that 30% of instant issued cards are used on the first day of issuance.
Of course, the next frontier — and opportunity — is being able to issue cards via the mobile channel. Today’s connected consumer expects that answers are a single -lick away and are not willing to wait for those brands that are slow to respond. Leveraging the mobile channel will be important factor in helping card-issuing banks remain relevant.
Evans chaired the “Instant Issuing and Personalization: What’s New?” track. As part of the chairman role, she was involved in selecting the other presenters and acted as a moderator on the day of at the conference. In addition to chairing a portion of the conference, Evans also delivered presentations entitled, “From Cards to Mobile: The Five Most Impactful Trends in Payments Today” and “How Loyalty May Be the Key Component of Personalization” to this audience.
Learn more about leveraging consumer loyalty to drive mobile payments adoption in Evans' free white paper