August 26 – 28th brought the 2019 edition of the Mobile Payments Conference to Chicago. Panels touched on a wide range of topics, but three major themes continue to emerge from the mobile payments landscape.
Providing relevant improvements to justify using mobile payments, the use of data sharing and partnerships to drive value and security and shaping a customer experience that leads to successful mobile payments.
Mobile payments adoption in the US continues to lag rapidly expanding markets such as China and India
Panellists alluded to a number of factors contributing to this. For one, in the US, mobile payments often do not represent an earthshattering difference from paying by card. The rapid uptake of mobile in China for example, is partially attributable to the lack of a legacy payments system – mobile payments present a tangible improvement over paying in cash.
Finding ways for mobile payments to add value or remove frictions from a transaction are one of the keys to driving future adoption.
Data is the king of commerce today
For retailers, leveraging the data they have on customers without giving away too much is an essential trade-off, while fighting fraud relies both on protecting data while proactively sharing that which may be helpful to stem losses.
Ethoca, for example, spoke about how little data sharing is done between retailers and card issuers, a condition which can let fraud slip through the cracks that might be more easily identified. With the growing presence of open banking, data sharing, and protecting the data that is shared will continue to be top of mind.
Today’s commerce is shaped by experience
We have constantly heard the Starbucks payment app held up as quintessential successful mobile payments app. The Uber experience is sought in all types of industries. More than one panellist alluded to a future in which the payment process simply faded from view into the background. OV Loop presented on the future of conversational commerce and the potential that on demand customer service experiences have to help set a payments experience apart.
Mobile payments remain at a crossroads, particularly in the US
The superapp model that has become so prevalent in China is unlikely to emerge in a US environment that has become deeply sceptical of some of the largest tech companies. At the same time, contactless mobile payments have struggled to take hold in the US due to a confluence of factors including poor messaging, inconsistent experience, and a marginal improvement over the established card system.
While a number of retailers have developed successful payment models at their individual brands, app fatigue is likely to ensure that an everyone for themselves approach is unlikely to succeed.
So, what is the solution?
If there is one consistent message from 2019’s Mobile Payments Conference, it is that despite the impressive array of solutions out there, we haven’t quite arrived. No one has yet been able to successfully craft a universal, frictionless, and available solution that truly delivers a compelling single alternative.
For the foreseeable future, it appears that a multitude of solutions will continue to shuffle towards the goal of greater US mobile payments uptake. The takeaway for payment players is that success will take continued partnership and innovation with an eye toward solving specific problems and truly convincing the American consumer that mobile payments are better than their existing, long-engrained habits.