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April 30, 2015updated 04 Apr 2017 4:03pm

The Payments Quantum Leap and the Lessons to Learn

Every few years, advancements in payments technology significantly disrupt how we shop. Credit cards reduced our reliance on cash, online banking led to the decline of the cheque, and now mobile payments are poised to be the next major turning point: potentially the decline of the plastic credit card as we know it.

By Verdict Staff

The concept of using a mobile device for payment isn’t new – the likes of Google Wallet have gained some consumer traction already. However, with the announcement that Tesco is trialling a service that allows customers to pay for items on their smartphones, and other innovations such as Apple Pay and Swatch’s new mobile payment enabled smartwatch, we may now be experiencing a pivotal moment.

So what lessons can other businesses take from companies like Tesco, Apple and Swatch’s readiness to embrace this new revolution in payments technology?

Understand your customersFor all organisations, it’s crucial to understand what makes consumers tick, so that they can meet demands, build loyalty and even predict what they might want next. In today’s socially connected world, there is a wealth of digital information that surrounds everyone- what we call Code Halos – that can be tapped into. By analysing this data, businesses can personalise products or services in more meaningful ways and build a strong sense of customer insight and loyalty.

Think mobile firstMost businesses are well aware that mobile is changing how consumers and businesses operate, but not all will be prepared for how fast disruption is occurring. As consumers get used to a smooth mobile experience, their expectations of other businesses will increase. Websites that are not optimised for mobile devices, online services that are not integrated with offline equivalents, or apps that deliver a poor user experience are all examples of things that simply will not fly anymore. In contrast, designing around a mobile first experience is most likely to provide greater benefits.

Never neglect securityIn their flurry to innovate, companies need to ensure they have robust security in place, especially when financial information is involved. In a world where even major corporations are subject to hacking and personal data being compromised, it is crucial for any organisation to put significant time and resources into security. Companies that fall victim to attacks take time to rebuild customer trust and confidence.

The wind of change is hereUltimately, the success of new payment technologies will depend on customer and retailer acceptance. After all, if customers demand mobile payments to run better, retailers will have to follow suit and adapt by running differently to provide an innovative, workable and robust approach. If mobile payments prove to be successful, and I believe this is just a matter of time, we will look back on this moment as a pivotal, disruptive moment in the retail payments industry, and one that all businesses can learn from.

Tony Virdi is VP of Banking and Financial Services in the UK & Ireland, Cognizant

 

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