Published on February 19, 2014
Accenture Interactive – Point of View Series Mobile Payments Who is winning the race to a better user experience?
Mobile Payments Who is winning the race to a better user experience? A cashless economy is the future vision of the mobile payments industry. With the rapid growth of smartphone ownership the world over, this vision is fast becoming a reality. But it is the consumer experience when paying for goods and services using their smartphone that will really tip the scales. Make it seamless, compelling and secure, and users will vote with their fingertips. The last five years have seen the emergence of a range of mobile payment technologies either as test beds or operational systems. But which companies are setting the pace in the mobile payment sector? Which of the technologies currently in use are most likely to influence the way we make transactions in the future? And how is design-led thinking influencing the creation of innovative mobile payment technologies?
Smartphone, smart money “Paying” like never before Transforming the consumer journey Every day, billions of consumers around the world pay for something—travel, food, entertainment, clothing, healthcare, insurance and more—either in person or electronically. Aggregated over time, paying is an activity that occupies a huge amount of time and attention. Emerging mobile payment technology is taking us into a new phase where payments by mobile devices become infinitely more diverse, personalized and attuned to individual lifestyles. Soon, instantaneous and customized mobile payment systems will not only free consumers from the ritual of buying things, but also create entirely new ways to buy and sell products and services. Mobile payments are also creating the freedom to circulate or allocate money to friends, different accounts or financial products. To give consumers a compelling experience, service providers are putting in place a number of mechanisms such as speeding up the payment process by removing queues, enhanced security, allowing consumers to have a better understanding of their own spending patterns and behavior, and much more. The age where the ritual of paying for things could become completely seamless, or even disappear altogether is fast approaching, thanks to numerous technical and business advances. With the introduction of electronic money, swipe payment systems and online transactions, paying has become faster, more secure, and more flexible over the last 50 years. Now payments could be handled completely in the background—saving time for billions of customers, and making retailers smarter, as their knowledge about customer preferences and behavior grows hand in hand with that of the smart payment infrastructure. Consumers and businesses are beginning to experiment with technologies that provide a variety of payment options—faces, fingerprints, physical gestures and through social media, for example. At the heart of this incredibly creative period of change is a growing recognition among financial services providers that they must deliver a highly compelling user experience—one that is intuitive, effective and puts the consumer in the driver’s seat. Merchants are in the process of adopting mobile payment systems to democratize retail, which will give flexible payment options to small and large businesses. They are also analyzing consumer data to gain insights that can drive efficiency and profits. This is important for reducing cost by having lighter and smaller payment infrastructure. Furthermore, it enhances customer services by freeing resources from the mundane action of payment and offering a more personalized shopping experience.
Trends setting the pace A number of companies and technologies are breaking new ground in mobile payments, with the potential to transform our daily lives. They are paving the way for an efficient and enjoyable shopping experience, providing merchants and consumers with better ways to charge and to pay. Though it is still early days, the age of seamless payments is coming. Companies taking a “consumer first” approach to their user design and mobile payment strategy today will be well positioned in this cashless economy. What are some of these companies doing differently to grow their mobile payment business? And how are they changing the way they serve their customers?
Simpler, faster online shopping It may not be a household name but Klarna, a Swedish-based company operating in north European markets, has radically streamlined the process of paying for online purchases. It has also launched a mobile version of the payment system, Klarna Mobile, to facilitate instant payments for on-demand services or goods that consumers require immediately. By creating a database of retailers and business users, Klarna acts as a conduit for payments to them and aggregates monthly payments into a single invoice for service users. This removes the need for online retailers to secure credit card details.1 Now anyone can be a credit card merchant anywhere In recent years, Square, iZettle and SumUp have emerged as popular mobile payment brands in different regions. Square, based in San Francisco, launched Square Wallet to enable buyers using iPhones or Androidbased phones to pay merchants with their credit cards.2 Sweden-based iZettle3 and UK-based SumUp4 provide a similar service in several European markets. The simplicity of their mobile and cashless systems is helping to democratize retail business by creating opportunities for small, part-time artisans or traders to operate wherever they find the opportunity to sell. Financial assistant in your pocket Garanti is Turkey’s second-largest bank. It is pioneering an approach to mobile banking that allows smartphone users to customize and manage their finances.5 iGaranti ‘atomizes’ banking services, offering a single point of access to 23 different apps covering a diverse range of services such as mobile wallet, savings and loans. It also provides live account updates and real-time location-based offers related both 1 https://klarna.com/?lang=en 2 https://squareup.com/wallet 3 https://www.izettle.com/ 4 https://sumup.co.uk/ to financial and retail services. Its payment system is integrated with social media sites such as Facebook, Twitter and Foursquare. iGaranti also brings the experience to life by translating personal financial data into highly visual dashboards so users see their spending pattern in a way that only they understand. Reinventing banking Polish bank BRE Bank (now mBank S.A.) launched a pure-play Internet banking service in 2000 called mBank, and it became the third-largest retail bank in Poland. Now the bank is rebranded completely as mBank, and has undergone a comprehensive, massscale, “Bank 3.0” revolution of its direct channels by introducing re-designed Internet and mobile banking services, fully leveraging modern technologies with a strategy firmly rooted in customer experience. Companies are offering innovative features not typically associated with online banking, such as social media integration, responsive design for mobile devices, real-time customer service, gamification and video content. This approach to consumer banking is radically different from traditional banking and truly customer focussed. Like iGaranti, mBank offers a number of innovative features not typically associated with online banking, such as social media integration, responsive design for mobile devices, real-time customer service, gamification and video content. This approach to consumer banking is radically different from traditional banking and truly customer focussed. Creating an instant payment universe Apple has already pioneered a seamless payment system in its own stores through EasyPay. This system enables customers to pay at Apple Stores by opening up the EasyPay app and simply scanning and buying any item with their phone. The good news is that many retailers can offer a similar seamless payment or coupon transmission service to customers who have the iBeacon app on their iPhone. iBeacon is a new location-based transmission technology that Apple has just launched.6 It could revolutionize mobile payments for Elliott Holley, “Turkish Garanti Bank Launches ‘Facebook’ Mobile Banking App,” August 30, 2013, accessed October 25, 2013. See also http://www. fjordnet.com/workdetail/igaranti/. 5 6 Devindra Hardawar, ”Apple launches iBeacon shopper location tracking across its U.S. stores today,” December 6, 2013, accessed January 24, 2014.
consumers and merchants by allowing for truly seamless interactions.7 Apple’s iPhone 5s with its fingerprint security function can also be leveraged for use in mobile payments. It’s certainly a lot faster than pin codes and may be more secure than other scanning or touch technologies. its push into brick and mortar stores through a new product, Beacon, an add-on hardware device for merchants that leverages Bluetooth technology to provide a better customer experience, including paying completely hands-free. Creating a ubiquitous mobile-first payment brand For consumers in industrializing markets, Africa and Asia for example, the infrastructure for mobile connections is far more advanced than for landline-based communications. So using mobile phones to manage financial transactions is almost a natural progression. In Kenya, for example, one of the leading innovators in mobile payments is Safaricom.8 Its mobile money transfer service, M-Pesa, has 17 million users—that is two-thirds of Kenya’s adult population. Moreover, a staggering 43 per cent of Kenya’s GDP flows through the mobile network.9 PayPal has become one of the most ubiquitous online and mobile payment brands. Its power lies in the reach it has established among massive retailers right down to small online boutiques. In restructuring its future business, PayPal is guided by two principles: simplicity and mobile first. The sheer scale of PayPal ensures that it will have a powerful influence over the evolution of mobile payment technology. PayPal is furthering Phasing out cash in emerging markets 7 K ara Kamenec, “How Apple’s iBeacon Could Upend Retail Shopping,” October 25, 2013, accessed October 25, 2013. 9 V entures, “StanChart Expands Mobile Payment Service For Corporate Clients In Kenya,” September 16, 2013, accessed November 7, 2013. 8 http://www.safaricom.co.ke/ 10 h ttp://www.safaricom.co.ke/personal/m-pesa/mpesa-services-tariffs/tariffs The Standard Chartered Bank is one of the biggest retail banks in Asia, Africa and the Middle East. Recently, it launched Straight2Bank in partnership with M-Pesa.10 The mobile payment service is designed to help large organizations such as development agencies, insurance companies and consumer goods firms to pay employees or business partners directly to their mobile wallets, simplifying the operations around paymentand minimizing the risk of financial transactions. Both M-Pesa and Straight2Bank are expected to be rolled out across a growing number of different countries including India.11 This initiative becomes highly significant when one considers that Asia, Africa and the Middle East have an estimated one billion people who own a mobile phone but do not have a bank account. 11 E lliott Holley, “Standard Chartered Completes Roll Out of Corporate Actions Platform,” 28 October 2013, accessed November 7, 2013.
From vision to reality While the mobile payment industry is still in its infancy, things are about to change. The coming years are likely to see the technology and business mature with ongoing innovation and, of course, increasing consumer adoption— mobile payments are likely to be a very big battleground. However, the success of mobile payments will be influenced by three factors. First is the extent to which financial service companies and technology providers collaborate to define a common roadmap. Second is the rate at which mobile payment technologies can adapt to the consumer’s demands for simplicity, timely service and security. And lastly, it will depend on creating opportunities for individuals and micro-retailers to sell to consumers when the opportunity arises, with few or no restrictions. Brands or services with established reach and trust-based customer relationships will be most likely to succeed. Newer entrants, however, with technologies that dovetail perfectly with customer lifestyles and circumstances, have the potential to disrupt markets.
To learn more about how to integrate a compelling user experience in mobile payment solutions, contact: Olof Schybergson Fjord firstname.lastname@example.org Joydeep Bhattacharya Accenture Interactive email@example.com About Accenture Interactive Accenture Interactive helps the world’s leading brands delight their customers and achieve superior marketing performance across the full multichannel customer experience. As part of Accenture Digital, Accenture Interactive works with over 23,000 Accenture professionals dedicated to serving marketing and digital clients to offer integrated, industrialized and industry-driven digital transformation and marketing services. Follow @AccentureSocial or visit accenture.com/interactive. About Accenture Accenture is a global management consulting, technology services and outsourcing company, with approximately 281,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com. About Fjord Fjord is a service design consultancy, acquired by Accenture Interactive in 2013. We create useful, effective, and desirable digital services that people love. We help the world’s leading businesses make complex systems simple and elegant with the power of design. Founded in 2001, Fjord employs a diverse group of over 200 design experts in nine global creative hubs: Berlin, Helsinki, Istanbul, London, Madrid, New York, Paris, San Francisco, and Stockholm. Find out more at www.fjordnet.com or follow us @fjord. Copyright © 2014 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks. Information regarding third-party products, services and organizations was obtained from publicly available sources, and Accenture cannot confirm the accuracy or reliability of such sources or information. Its inclusion does not imply an endorsement by or of any third party. The views and opinions in this article should not be viewed as professional advice with respect to your business.
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