Winning the competition war with payments innovation
Keeping your institution at the forefront of payments innovation isn’t just a battle – it’s a persistent war. This ongoing conflict with change to maintain relevance is paramount in your ability to supply your cardholders with the advantages they expect while gaining market share over your competitors. Though easy to pit yourself against the external challenges, the real war of payments innovation lies in the struggle to overcome your own reluctance to embrace change.
By accepting the most recent advances in payments technologies, you’ll gain the potential to create new and valuable avenues of revenue for your institution while providing your customers with appreciated card services. However, before you adopt all the latest and greatest, it would be wise to first understand the direction that payments innovation is headed.
Let’s take a look at just some of the latest developments.
An innovation quickly gaining traction is proximity mobile payments, a mode of payment facilitated by near field communication (NFC). Giving consumers the ability to make transactions with their mobile devices, this advancement provides heightened security with biometric authentications such as fingerprint access and greater ease of use by reducing the transaction process to the simple action of close device to terminal contact.
Though still emerging, big brands such as Google, Android, and Walmart are driving progress with their own mobile payment apps, and many consumers already possess the ability to make mobile payments with NFC capable devices. Additionally, as more merchants adopt EMV enabled POS terminals, they can begin processing mobile payments immediately with their updated terminals. With widespread availability, it’s only a matter of time before proximity mobile payments gain widespread acceptance.
NFC and mobile technologies are in the hands of consumers and merchants, but are not merely limited to hand-held devices – wearable technologies are further pioneering the future of payments. More than fitness trackers, these wearable devices are NFC enabled to securely transmit payment information using apps synced to users’ mobile devices.
In 2014, Internet Retailer reported that mobile shopping became the primary way consumers choose to shop, and this trend shows no sign of slowing as more and more consumers become increasingly familiar and confident using their devices to enable their purchasing power. These digital payment technologies are transforming not just the nature of consumers’ wallets, but the ways in which they choose to make purchases altogether. Whether it’s providing a faster checkout process or giving them the ability to make a purchase at any time, mobile proximity payments are creating a new horizon for transaction possibilities.
Despite cutting ties with traditional modes of payment, these NFC enabled forms still must retain their connection to users’ accounts. Although the universal adoption of proximity mobile payments does rely on the widespread acceptance of consumers and merchants, it really hinges on whether or not issued cards are compatible with the new technologies. As you explore the opportunities that payment innovations may afford, it will be beneficial to first understand where these innovations are leading your cardholders – to or away from your institution.