After two months of being inundated with payment innovation announcements, a bit of chaos, and seemingly unending debates about the “better” technology and new approaches, let’s take a brief time out.
While multiple players in the ecosystem, namely the networks, have made great strides to develop mobile payment security standards, we’re still a long way from ubiquitous adoption. No matter how good you think Apple Pay is or what it has done to solidify the direction of technology and security solutions for mobile payments, it’s still unproven in terms of mass consumer and merchant adoption.
But so are all of the mobile payment “solutions” launched to date – at least ones that aren’t indirectly tied to commerce products. The industry’s been working on mobile payments for over five years now, and no solution has really delivered the promised silver bullet.
Everyone seems surprised by this, but I can’t quite figure out why.
Consumers use a variety of payment methods today – not one, not two, not three – many, many methods to accomplish their optimal ways to pay. Why do we believe that one, or two, even three digital methods will solve all of their needs?
Perpetuating the idea that mobile devices will replicate the physical world completely underestimates the capacity and capability they possess.
Mobility has transformed our world, not replicated it.
True innovation completely alters our experiences. Uber changed the way we hire transportation. iTunes completely altered the music industry. Paper maps are relics, relegated to libraries and bottom drawers at home, thanks to Google.
In the long run, the way consumers interact with merchants will drive how they pay. The ability for companies to reinvent commerce, reduce points of friction and increase the surprise and delight experience will impact the degree of success.
Can one solution accomplish this? Hardly. It will take many solutions.
Some may dominate and generate more market share over time. But that will take time and many years of consumer adoption to determine.
So, then what does it take to win? After 5, 10, even 15 years for many of the payment industry players investing in technology, are we any further along in determining who might be doing better than others? What segments have made the greatest strides?
One way to measure this is a return to a very simple mantra – focus on the customer. In the case of payments – there are two. Consumers who want to use the solution, day in and day out. And merchants who are willing to accept, promote, likely drive, the solution as well.
Not so simple.
Consumers don’t seem to ask for a whole lot. They just want their payment device to work – albeit every time. Which in practical terms, is hard. They’ve also been trained to want, maybe expect, some value in exchange for their loyalty to a particular method of payment. Anyone who has spent a significant portion of their career as a marketer in the credit card space can look in the mirror and thank themself for creating that expectation.
But when it comes to the merchants, what do they expect?
For years, many “partners” didn’t look to them as customers. So in many ways, they ultimately want value.
A true value proposition in exchange for providing access to their customers.
That value may be reduced fraud, easier operational transactions, minimal cost of payment handling or collections, and enhanced customer loyalty and sales – but it must be measurable. Solutions can’t just be replacements. They must be a platform which provides new visions for enhancing commerce.
Hmm – maybe that’s why it’s taking so long? And, perhaps that’s why there won’t be just one, or even two solutions.
So, is it possible to assess how we’re all doing so far? Are some companies further along or are we just spinning our wheels, hoping something miraculously sticks to the walls?
I think we’d all like to believe, and actually have some evidence to support, that yes, significant progress is being made. At MPD, we have created a new rigorous methodology to answer that very question, and to create the first ever Payments Innovation Index. Certainly you intuitively know some companies are further ahead than others, but can you quantitatively measure it?
Ours is the first index to benchmark where over 100 companies stand on innovation in the payments space. Are some more ready than others? Are they helping to drive the changes occurring in digital and mobile or are they merely sitting on the sidelines?
One important element in determining this is market knowledge. Payment industry professionals have great insight to help distinguish real progress from smoke and mirrors. If you haven’t taken our survey which captures your perceptions, we’d love to hear from you. Your insights will be a key component in helping to assess who is actually driving the industry forward!
And, we’ll announce our results of our work at The Innovation Project 2015, March 18-19 in Boston.
From what we’ve seen so far, it’s going to prompt some fascinating discussion.
Lend us your insights to our survey – and join us in March to get the scoop on what we will have all learned about how ready our industry is to drive the innovation that our consumers and merchants most value and desire.