The August issue of Admap puts the spotlight on the future of payments. Sanjib Kalita, from Money20/20 and Guppy, explains key trends in payments, including digital identities, data as a value driver and the importance of brand trust.
We are in the midst of seismic societal changes of how people interact and transact. Across societies, geographies and segments, digital is the new norm. Change has accelerated, placing greater value upon flexibility and speed. Historically, money and finance have been among the more conservative and slower changing parts of society, but this has changed dramatically over the past decade by viewing money as an instigator of change rather than a lagging indicator.
Whether you are a marketer in shining armor conquering new territory, a financial wizard casting spells upon the balance sheet, or the queen or king guiding the whole enterprise, here are five trends about money that you should keep in mind for the future.
Platforms are the new kingdoms
Platforms are the base upon which other structures can be built. App stores from Apple and Google provide the infrastructure for consumers to complete commercial transactions and manage finances through their mobile phones. While these companies develop their own digital wallets, they also enable similar services from banks, retailers and other companies. Building and maintaining the platform enables services that they would not have created on their own, like Uber or Lyft, which in turn, have created their own platforms.
Marketers can plug into platforms to broaden offerings or deepen engagement with target segments. Platform-based thinking implies that product and service design is continuous, and beyond product launch. After they built the Square credit card reader, Jack Dorsey and team went into lending with Square Capital. They got into consumer peer-to-peer payments with Square Cash. Their ecosystem has grown through partnerships with other companies as well as in-house development.
Digital Identities open the gates
How do your customers interact with you? Do they need to create a username and password, or can they use a 3rd party system like Google or Facebook? Are security services like two-factor authentication or biometrics used to protect credentials? Is your company protecting customer identities adequately? The importance of all these questions is increasing and often the difference between being forced into early retirement by a massive data breach, or surviving to continue to grow your business.
Context rules the experience
Credit card transactions moved from predominantly being in-store, to e-commerce sites accessed from desktop computers, and now to mobile phones. As the point-of-purchase expanded, so did the consumer use cases and thought processes. In tandem, mobile screens presents less information than desktop computer screens, which in turn presents less information than associates in a brick-and-mortar environment. Companies best able to understand context and deliver the right user experience within these constraints will build loyal customer relationships.
Apps targeted for use cases on the same platform, such as Facebook and Messenger apps, can help achieve this. On a desktop, you can access these services through a single interface but on the mobile, forcing users to select their use case helps present a streamlined experience on the smaller, more time-constrained mobile screen. The use of additional data such as location, device, etc. can further streamline the experience. Marketers that don’t think about the context will lose the battle before it even begins.
Data is gold
While a marketer’s goal is to generate sales, data has become a value driver. PayPal uses payments data from their platform to help build a lending business. SME lender, Kabbage, became a fintech unicorn by making smarter lending and pricing decisions using new data. Stripe, a software company that provides online payment processing for internet businesses, distilled a previously complex technology integration into a minimal data set, accessed via API, to completely change how payments are built into new digital products and services.
Marketers that harness the power of data will be able to predict what customers want and more effectively address their needs. In some cases, it might be using data from within your enterprise or from other platforms for targeting, pricing or servicing decisions. In other cases, it might be using data to reimagine what your product or service is.
Trust is the Crown Jewel
The proliferation of new companies, brands and products along with the demise of former industry bastions have disrupted customers attitudes. The pursuit of more convenient commerce increased access to services, but also made them more accessible to hackers and bad actors. The volume of information processed renders it impossible to monitor everything, raising the value of trust and ethics.
American author and philosopher Aldo Leopold once said, “Ethical behavior is doing the right thing when no one else is watching – even when doing the wrong thing is legal.” Do your actions achieve this standard? Does your company? If not, what can you change? Trust takes a long time to achieve but can be lost in a moment. Companies that can cultivate trust in their cultures and interactions will be well suited for long-term gains. Customers can differentiate between good and bad behavior, so make sure your intentions and actions are well communicated.