Mobile Payments: Opportunity for banks to create true value

There is a lot of activity in the mobile payments space, with companies of all sizes, including Google, PayPal, Visa, MasterCard (with their recent investment in mFoundry), American Express, retail banks and start-ups all vying to win over consumers and retailers.

Providing issues around convenience and security can be overcome, consumers and retailers are poised to embrace mobile devices as a strong alternative to payment cards.

As the economic crisis continues into 2012, and consumers ‘feel the pinch’ they will become increasingly demanding of their banks, asking for improved access to services that help them to understand and manage their spending.  Wherever possible they’ll be looking for this information in real-time across a range of mobile devices. For retail banks looking to win a share of this market, this means bringing to consumers a trusted and enhanced mobile experience. Trust, as Martha Rogers from Peppers & Rogers  puts it, is built “when customers are protected, even when they don’t pay attention”.  Mobile payments services that build trust between consumers and their retail banks could include:

• Storing virtual receipts, so customers can easily keep track of everything they spend, including when, where and how much
• Usable reports on past expenses as well as analysis of customers’ own expenses and the expenses of their families
• Alerts on spending or credit balances if a customer or family member breaches a threshold
• Use of agents on the net to find the best promotions based on specific criteria (product type, budget, brand, deadline)
• Newsletters or offers carefully targeted based on previously indicated preferences

Similarly, retail banks can use mobile payments as an opportunity to provide services such as direct marketing to retailers. Services could include:

• Turning promotions into treasure hunts, with details of store locations, in order to drive traffic to retailers’ stores
• Delivering best offers and coupons to selected customers, (not just everyone), in order to increase customer footfall with optimised marketing budget
• Collecting mobile data in order to increase knowledge of customers and improve profiling
• Delivering customised mobile rewards to customers in real-time, providing a more memorable customer experience during payment
• Delivering cross-channel and cross-retailers promotions that help drive customer retention

To keep up with the pace of change, banks will need to invest in the mobile payments channel so they can offer services that deliver true value beyond convenience and security, and ultimately build customer and retailer satisfaction.