In this exclusive NEXTcast interview, Liza Landsman, Managing Director, Internet and Mobile North America at Citi, sits down in the Briefing Room Hot Seat to answer five burning questions on the convergence of merchants, payments and channels in the rapidly evolving payments space.
Liza joined Citi in 2000 and has been actively involved in focusing Citi's efforts on payment solutions that streamline and enhance the experience for finding, buying, and paying for products on the Web, via mobile devices.
When asked how consumers will take to these changes, Liza draws an interesting analogy to the adoption of the ATM. She says that if asked whether consumers would use or trust a big metal machine that sits outside of bank lobbies and dispenses cash, the answer would have probably been a resounding no. She believes, therefore, that the unarticulated consumer's need for mobile and consumer adoption will be the catalyst for innovation and he – or in this case – she – who cracks the code first will win.
Mobile phones, laptops, netbooks, and even POS terminals have become computing devices enabled by applications that support new experiences for consumers and merchants. This is also what is driving the convergence of retail channels. What is the biggest impact of this convergence from where you sit in the ecosystem?
Channel convergence for retail and the expansion of access devices means more options for consumers to find, purchase and pay for the things they need. For merchants, it means potentially more volume from new means of payment — but it's also going to mean dealing with more complexity and keeping up with multiple transitions as solutions evolve. At Citi, we’re continuing to innovatively support our customers' needs for payments and shopping, across credit and debit products alike. We have a number of initiatives already in the marketplace, such as our Citi Mobile service, and new ones are under development which will provide enhanced experiences for finding, buying and paying for products on the Web and via mobile devices.
As with most new innovation, there are those who will embrace it, those who will wait and see and those who will never be convinced. And, since the payments sector is a complex platform, there are many parties that have to get on board every time a new innovation is spawned. From the standpoint of merchant/payment/channel convergence, what side of the platform will jump in first, and how will the other sides be persuaded to get on board?
Regardless of which side of the platform triangle is driving change — the merchant, the payment vehicle or the access channel – success or failure ultimately depends on customer adoption. Obviously, in order for consumers to have a chance to exert their aggregate demand, a truly attractive solution needs to be put in front of them first. What's attractive for consumers? Something that gives them the right mix of convenience, choice and control at the right time and in the right place. Online already achieved the combination of the first four. Mobile now adds the fifth — location — to complete that "just-right" combination. When proximity payments take hold, Mobile is going to be at once the payment vehicle and the access channel. This is why we are continuing to invest in new capabilities and innovation in that domain.
What opportunities does this convergence provide for the various stakeholders in the payments ecosystem, and who stands to be disrupted and even disintermediated, and why?
The convergence of physical, online and mobile channels opens broader opportunities for all providers to go after the largest portion of payment transactions – cash. It’s no secret that payments by check continue to decline, replaced by credit and debit cards and by preauthorized electronic payments. It will be a natural part of that evolution for various participants – everyone from banks and cards issuers to networks, merchants, mobile device manufacturers, carriers and anyone else you can think of – to try to grab control of the value chain. We're confident that Citi's strengths will continue to provide the reassurances consumers need to feel secure and protected in their transactions.
It is hard to talk about channels, convergence and payments without talking about contactless and location based services. What’s your view on their short and long term prospects in the developed and developing countries?
Within our North American Consumer Banking team, we’ve been actively at work in this field for some time now. We're ensuring we place our resources, our investment and our efforts behind a holistic approach that has a plausible path to success. Everyone in the industry knows that these are early days, and that the goals are evolving as consumer needs and norms evolve very differently in developed and developing countries. But for now the vision must include a mobile solution that lets customers choose, at the point of sale, which of their accounts to pay with and on what terms, electronically. Customers want the best deal they can be offered at that place and at that time.
A lot of the solutions that are currently supporting channel and payments convergence are good for the consumer, but not the merchant; the merchant but not the issuer or the consumer; or the issuer and not the merchant or consumer. What solutions have you seen that deliver a compelling proposition across the board?
Citi is in a unique position at the center of where consumers', merchants' and networks' interests all converge. We get the interests and concerns of the multiple participants across the value chain, from merchants to end-consumers, because in addition to being a major issuer of credit cards and retail bank products, we also run the world's largest proprietary network for corporate treasury and trade solutions. With that insight we believe Citi provides a great value exchange for all parties. And as channels converge and devices evolve, the payment solutions we're working on will bring merchants and consumers together in novel ways that will benefit everyone and the system as a whole.
Bio: Liza Landsman is the Managing Director, Internet & Mobile, Citi NA Consumer. Liza Landsman joined Citigroup in 2000 and has had roles in e-citi's Strategic Alliance Group, Citi Business Credit Cards, Citi Analytics and Citi Cards leading Internet and Channel programs. Most recently, she assumed responsibility for all Internet & Mobile channel strategy and operations across Citi’s North American consumer businesses. Prior to Citigroup, Liza led corporate and business development teams in IBM's Consumer Division & Global Services Group, a dot com in the payment space, and enjoyed various roles across the Media and Publishing Industries. Liza is a graduate of Cornell University.