Mobile Payments Today: November's top reads
With Apple Pay Cash now live and out in the wild, does Apple actually have a hit on its hand that will actually spur more consumers to use mobile payments?
That was a question posed by Terry Crowley, CEO of RevChip and TranSend, to what turned out to be the most-read piece of content on Mobile Payments Today in November.
Crowley believes Apple Pay Cash can be a critical service, mostly because it has a leg up on the competition in the mobile person-to-person market: acceptance at physical points of sale.
"Apple Pay Cash might just be the spark that finally ignites mobile payments on a broad scale," Crowley wrote.
Another noteworthy feature in November was PNC's plan to put the customer experience at the center of a new payments feature within the bank's mobile banking app.
"Now is a good time to get plugged in and be prepared for a shift in customer behavior," Tom Trebilcock, senior vice president of digital for the bank, told Mobile Payments Today in an interview. "If you can make the user experience compelling enough, you'll attract more users and other [customers] will follow."
Rounding out the top five in November are pieces about a quiet year for mobile wallets in the U.S.; fintech partnership considerations for banks; and a repeat from October about how QR codes are changing e-commerce.
5. "2017 a quiet year for true mobile wallets in US": In the weeks after Mobile Payments Today asked companies to supply information for last year’s Mobile Wallet Comparison Guide, a number of events happened in the industry that created a lot of buzz. This year? Not so much.
For the most part, 2017 has been a quiet year for mobile wallets.
Consider this: in the weeks after Mobile Payments Today asked companies to supply information for last year’s Mobile Wallet Comparison Guide, a number of events happened in the industry that created a lot of buzz.
Barclays and Wells Fargo each introduced Android-based mobile wallets.
MasterCard and Visa each made significant announcements that will affect mobile payments in the future. And PayPal, believe it or not, was at the center of a couple of those announcements as the company finds its way as a checkout option at physical retail locations.
Apple added Apple Pay web browser-based payments to its own Safari system.
We also saw both Chase and Citi come out with their respective mobile wallets last November.
But since those announcements, it’s been quiet, especially in the U.S.
4. "PNC puts the customer experience at the center of PNC Pay": A new feature within the bank's mobile app is more about customer control than payments.
The late Yogi Berra, who enjoyed a Hall of Fame baseball career with the New York Yankees, had a way with words that often confused people even though his statements were drenched with humor and wisdom.
One particular "Yogi-ism" comes to mind when examining today's mobile wallet market: you can observe a lot by watching.
Most of the giant financial institutions sat back and watched when Apple Pay debuted in the U.S. three years ago. They were content with making their cards eligible for Apple Pay, even if it meant sharing part of the transaction fee from such payments with Apple.
But as the banks watched things play out, some observed that they could have a say with mobile payments and wallets on Android, and maybe even make their offering more valuable than the current Pays.
That's the idea behind the latest entrant into the market, PNC Pay. And Tom Trebilcock, senior vice president of digital for the bank, believes that PNC adding a payments feature to its mobile banking app comes at just the right time.
3. "13 key fintech partnership considerations for banks": When considering a partner in the journey to reshape a bank's corporate and digital strategies, you need to ensure they are experienced, prepared, and committed for whatever may come their way.
Much is written about the need for banks and fintechs to partner bringing innovation and speed together with scale and existing customer base.
This isn't a new concept. It has occurred for decades as technology has advanced and propelled industries forward. Those who believe either all incumbents would be replaced or be the sole survivors bet on the wrong horse. In the end, some combination of old and new invariably wins out (see Blockbuster and Pets.com).
Blending the best of both worlds is the clear path forward. While dreaming about a long weekend away adds joy to our day, where would we be once behind the wheel without the GPS helping us avoid delays and closures that otherwise would dampen our mood. After realizing this, the question becomes, how do you ensure success? Technology and the value partnerships bring may steal the headlines, but success and achievement of goals can only occur if the fintech and bank are successfully working together with a shared commitment to overcome the inevitable challenges faced.
If your partner isn't prepared, experienced, and all-in, you end up with poor engagements (which currently litter the market) or even shelf-ware that fails to deliver expected results. The fundamental structures of banks from their legacy processes, siloed technology, inaccessible data, and varying regulatory requirements need to be addressed in a unique way that no boilerplate model or turn-key answer can overcome by itself.
2. "How QR codes are changing e-commerce": The QR code – which has had a wild ride – is going to both speed up the e-commerce payment experience and make it more secure.
E-commerce has long relied on the "card-not-present" payment method. At this point, online consumers can do the routine with their eyes closed: Enter their credit card number and billing address into the website form, flip their card around to key in the security code, and click "Purchase."
The QR code – which has had a wild ride – is going to both speed up the e-commerce payment experience and make it more secure.
The security risks associated with the CNP payment method are well known.
Merchants' systems – which store all the information criminals need to commit fraud with consumers' credit or debit cards – have been vulnerable attack points, hence the data breaches we read about daily. They also don't have a way to confirm whether the information a consumer enters is their own or compromised data.
Online businesses that use this payment method expose themselves to hacking, but even if they’re not hacked, they pay a price since there is a higher fee for processing these higher-risk transactions in which the card is not physically present.
So both consumers and merchants are paying a higher price for the convenience of online shopping. But the emergence of QR Codes for payments will show it doesn't have to be that way.
1. "Apple Pay Cash: A step in the right direction for mobile payments?": With its focus on premium influencers and its control over a large ecosystem, Apple is in a unique position to effect massive change where others cannot.
Sometimes it's important to step back and look at the business landscape through a wide angle lens. Right now is one of those times.
In the last 10 years, Apple shares have returned 1000 percent, while the S&P has gained 70 percent.
This incredible run has largely been fueled by one thing: Apple has captured 80-percent plus of all smartphone profits that have ever been made in the history of the world. What's even more remarkable, is that the company has done so with a global market share of just 20 percent.
It's the 80-20 rule in its most artful form.
The big bet, placed way-back-when, was to dominate the high end segment where brand and performance matter and price is no object. The bet has paid off beyond belief.
Apple iPhones sell for $600-$1,100, while the worldwide average for Android phones hovers just above $200. The App Store supercharges those margins even more. It's a case study in price elasticity and portfolio theory that will be taught for decades to come.
Now, though, smartphone shipments are contracting. So, what's Apple doing?
It's adding critical services.
Will Hernandez Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.