Mobile And Online Technology Requires Changes In Payments

As our lives become more reliant on mobile and online technology, the payments industry is required to make changes to keep up and offer better payment options. Customers expect to be able to make payments using any device, through any channel and at any location.

Many companies have realized they need to be working hard to adapt to mobile and online technology. In the last 30 months, more than 300 companies around the world have attracted over $19 billion in venture capital funding for their mobile and online payment programs and new technologies, according to a recently released Visa report. Moreover, major companies have been putting billions of dollars into annual research and development so they can improve future business models.

The Visa report has outlined seven topics that are important for payment companies to be aware of and consider for these future business models. The first topic discusses growth in technology while the other topics aim to discuss relevant trends in consumer behavior. We have highlighted five issues that are important for the payment space to identify and understand.

Technological Development

New technology is developing quickly and will likely continue at the same trajectory in coming years. Smartphones are becoming smarter and cheaper, and have become accessible for more people. Smartphones are also better connected and new 4G networks are rolling out all across Europe. These networks operate at faster speeds and the consumption of mobile data is constantly rising. Consumers’ increasing access to these networks are encouraging to conduct more online shopping and use applications for various payments.

Identity Management

Many businesses and government organizations are unable to provide services online because they are not able to secure the identity process. There are several problems with crime such as spoof websites, stolen passwords and hacked accounts. In addition to these problems, consumers are also asked to remember many usernames and passwords. It is hard for them to keep these accounts organized, and the system has become overly complicated. The online process is too complex and leads to problems such as individuals reusing the same password for several accounts. Using the same password leads to online fraud and identity theft. Companies are waiting to see if a uniformed solution will be implemented or whether the payments industry will be forced to fragment solutions for the identity process.

Getting To Know Your Customer

When we went to the corner grocery store or local coffee shop a few years ago, we would build organic relationships with local merchants. Businesses would get to know their customer through personal interaction. People working at the tills noticed consumption patterns and understood their customer’s lifestyle by observation. However, technology has vastly changed the way businesses can now collect consumer data. For example, many grocery store retailers in Europe use loyalty card programs to find out a shopper’s favorite brand or frequently purchased items. The problem with the new technology is the overabundance of information. Businesses must be able to make valuable sense of the consumer data.

Businesses like Amazon are using consumer purchase history to better understand the customer and it enables them to make future product suggestions. This personalizes the process for online shoppers and is a smart way to expose shoppers to new products. The newer technologies allow companies to better predict the consumer behavior and tailor services to their exact needs.

Automating The Process

The consumer data being collected is full of images, voicemails, text, social media and other files that are full of information waiting to be analyzed. This information can be very challenging to understand and is coming in at high volumes. The retailer is taking in at least 1000 transactions per second. Payment data is particularly rich as it contains information such as who is making the payment, where they are, and when they made the purchase. Moreover, the less cash and fewer checks in circulation, the more opportunity retailers have opportunity to collect data.

Banks are really cashing in on this overflow of customer data. The increase in data has allowed them to make timely offers and solutions that are appropriate for different regions. Businesses must automate the data systems in order for them to effectively manage the heavy flow of information to keep up with progression.

Embracing All Participants In The Ecosystem

In the past, it was normal for businesses to keep competitors at a distance and view them as intruders. However times have changed and the new reality of the business ecosystem demand all companies, including suppliers and competitors, to work together for progression. The companies should be aligning their investments and technologies and playing a more supportive role. More and more companies are joining together to offer integrated programs that increase value for their customers. Another member that companies may not have previously been used to working with is the consumer. It is integral for businesses to be engaging with their customer as well as trying to expand target audience.

To read the full report at Visa click here.