In payments, what do customers really, really want?

Written by on March 15, 2016 in Billing & Payments, Opinion with 0 Comments

Payments puzzleWhen mobile payments first appeared, companies majored on the increased transaction speed. This, in our opinion, was ludicrous. Instead of a transaction time of 12 seconds, during which you can sort your bag out and ask the cashier whether he is having a nice day, transaction times could now be dramatically reduced. To about 10, maybe eight, seconds.

When Apple Pay finally arrived, having been predicted for several years, it was about security and the general coolness that Apple brings to its products.

When Google joined the payments battle, we watched as the two giants arm wrestled their way across the front pages of the press and we wondered what they were actually up to. Samsung soon joined the fray.

Android Pay is now, apparently, a small step closer to perfection. With Google’s offering you do not even have to retrieve your phone from your bag or pocket, you just tell the cashier that you are paying with Google’s app and ‘lo and behold’ some miracle occurs and the transaction is done.

Meanwhile the big payments processors were hedging their bets, investing in NFC and their own contactless solutions.

Now, late in the game, the banks are moving, at least in the US. Several big banks have got together to provide an instantaneous money transfer service for its customers, which, they claim, can be used for all sorts of things.

Facebook is up to something with Messenger. The recent Uber deal is the tip of the iceberg. The fact that they poached David Marcus from PayPal to develop Messenger meant that you didn’t need to be a rocket scientist to work out that there is an element of payments in the plan. In a Wired interview, he admitted that Facebook wants everything to work through Messenger and he envisages a sort of ‘platform for life.’ They need to do something radical, otherwise the stock market will wake up one morning and wonder about the real value of a company that depends on one fragile revenue stream.

Meanwhile, ‘established’ players such as PayPal trundle on, quietly developing their platform, quietly keeping their market share. And Square, @jack’s other project is doing well, following its IPO.

And yet newcomers keep coming. Among the 60 payments providers at the recent MWC, we recognised only 10.

And we must not forget the blockchain, the answer, it seems to life, the universe and everything. One start-up is even touting it as the way to solve the ad blocking crisis. If you do not want adverts, you can download this blockchain widget and it will seamlessly pay the publishers tiny amounts of money in return for content.

It is fair to say that the payments arena is complex and a bit daunting.

Picking the ‘winners’ is not easy. Apple Pay has not been the outright winner that Apple fans predicted it was going to be. They have decided not to engage with network operators, while Google has. Frantic meetings are held daily to decide the strategy, because the stakes are so high. Not only is the payments market itself so big, running into trillions of dollars, but also it is a door. And beyond the door lies loyalty, trust and another huge and complex business based on offers, services and timely products.

This gives network operators an advantage, particularly as they commit to becoming digital, leaving behind post paid systems and post paid thinking. For them, payments and supporting the digital experience will become the new billing.

So, what is actually the most important element of a payments mechanism, for the customer? Security? Certainly most of the older age groups that are asked cite worries with their personal information when it comes to payments – less so for younger people. Ease of use? Speed?

The answer is yes. But as this survey shows, different age groups worry about different things. The older you are, the more worried you are about security. The younger you are, the more you are attracted to convenience and low-cost.

After the explosion in companies and the initial wrestling for position, it is clear that the market needs to identify and address these segments, like any other, and the winners will be those companies who click the right buttons of the segment they want to pursue.

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Alex Leslie

About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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