Payments used to be boring. You would meet a Billing Manager at a conference and he would say he looked after billing and payments and you would start talking about billing.
Now, so some would say, Billing is dead (long live charging or something) and payments is where it is at. Everyone is getting into payments. Almost every day, we hear of a start up, a wallet that lets you know you have left it behind, perhaps, or that a bank has launched an app. Payments providers are investing millions, telecoms companies (old established ones) are thinking of converting entire legacy platforms to simple, store-like payments ones. Apple, Amazon, Google are in to various extents, PayPal is trying a range of different options, Square is launching a text based payment service in a slightly retro fashion. Prepaid entertainment cards are launching international money services, as is Facebook. Meanwhile the list of operators getting into Direct Operator Billing grows and grows.
The list is endless and slightly exhausting.
The question is why?
According to Charmaine Oak, author of ‘The Digital Money Game’ and now ‘Virtual currencies – from secrecy to safety,’ it is because, “at the moment, payments constitute that magic ingredient that can enable the provider to acquire and retain customers across multiple channels.”
This sums up the growing importance of payments extremely effectively. It may even be the reason that Apple finally makes a move, even if, as Jonathan Jensen says, if they do “launch a payments service [it must be] not just better than existing payment methods but much better.”
Payments, therefore, is about the customer experience. As such, and unlike billing before it, it has a much better chance of getting the attention of the Board within companies. Billing might manage the money, payments gets the stuff into your bank account. Make that experience a happy, simple one for customers and they will enjoy it and come back for more. In the discussions about NFC, when some thought that NFC was the panacea of the payments world, one or two wise people said that NFC was not the point. The point was the wallet.
In your (physical) wallet you do not just have a payments device, you have keys, debit cards, credit cards, loyalty cards and unidentified bits of receipt which have been mashed by the jumble of coins in the compost at the bottom.
Make payments frictionless, add proper loyalty schemes, not the ones where you are just irritated by being asked whether you have a loyalty card and if not, would you like one, and you have a winning combination. Payments can support amazing customer experiences – if done right.
That, then, is why the world is heading for this new battleground.
Interesting. It does all seem to be about payments now. Could that be because the two parts have become one? After all, payment has always been the end goal even when it happened weeks after the billing. Even if it’s all happening in real time, we still need to tell the customer what to pay and why (what we used to call ‘billing’). But when it’s so immediate and instantaneous, the billing part and the payment part are almost indistinguishable – they appear as just one seamless transaction. We are calling it “payments” but you could perhaps argue that the really interesting bits (account management, communication and identification) are actually what we have previously called ‘billing’.