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Mobile payments 5 for 5: Focus on loyalty and experience

January.09.2015 0 Comments

MobilepaymentsHow loyalty will drive mobile payments is always a high-profile topic of conversation in this industry and that was also the case last month on Mobile Payments Today as we closed out 2014.

Tiago Soromenho, founder of Mozido’s StickyStreet mobile loyalty solution, wrote a blog post based on the eternal chicken and egg argument surrounding loyalty and mobile payments. He believes mobile loyalty is the onramp to mobile payments, not the other way around.

Some industry pundits have questioned whether Apple Pay needs a loyalty program now that we’re about three months into its existence. Depending on whom you ask, Apple Pay has either been a flop or is exactly where it needs to be at this point in time. Merchants will likely decide Apple Pay’s success, but Apple doesn’t give retailers much of a reason to accept it. One reason some merchants hesitate to accept Apple Pay is because Apple does not share consumer data, and Bryan Pearson from Loyalty One argued in a blog post that is the one thing retailers crave.

The December 5 for 5 also recaps what CardMobili is doing to help mobile network operators bolster revenue opportunities by way of a digital wallet linked to direct carrier billing capabilities. Payfone reemerged onto the scene after a two-year quiet period and is working with some major financial institutions to secure mobile banking authentication.

Please be sure to also read our 2014 review. It was a two-part series where we reviewed everything from Apple Pay to direct carrier billing.

5. “CardMobili brings digital wallet capabilities to MNOs” – The company is partnering with direct carrier biller Bango to enable consumers to buy physical items and charge them to their monthly mobile bill.

As mobile network operators work to bolster their revenue opportunities outside core products such as data plans, a new partnership between CardMobili and Bango could provide carriers with an uptick in returns from direct carrier billing while providing their subscribers with a digital wallet that offers retail discounts.

CardMobili, a Portugal-based digital wallet provider, is integrating Bango’s direct carrier billing capabilities with its own technology to create a product thatMNOs (and merchants) can brand as their own to enable consumers to buy physical items and charge them to their monthly mobile bill.

The partnership, which the companies announced earlier this week, is another recent example of how direct carrier billing is becoming a payment method for physical goods and services, and not just for digital content.

Read the rest of the article.

4. “Payfone to work with major banks on mobile banking authentication” – The company’s new service relies on the same security standards mobile network operators use to identify their customers.

Payfone this week emerged from a two-year quiet period to introduce a new authentication product that relies on the same security standards mobile network operators use to identify their subscribers.

The New York-based company will pilot its product, called Identity Certainty, with three major financial institutions in the first quarter of 2015 through a partnership with fraud protection and risk management company Early Warning.

Payfone did not reveal which banks will use the service, but Early Warning is a limited liability company owned by Bank of America, BB&T, Capital One, Chase and Wells Fargo. Early Warning also is a Payfone investor.

Read the rest of the article.

3. “Uber and lessons for the mobile wallet” – Mark Ranta from ACI Worldwide believes payment apps need to focus on the experience and create new experiences that are meaningfully better than the ones we have today.

Earlier this week I received a phone call that my car was ready to be picked up from its 20,000-mile service appointment. Nothing exciting there, although the call did come two hours early (a win of sorts). I found myself with the unenviable task of finding a lift to the dealership. Or, it used to be an unenviable task before Uber launched its UberX service in my area.

Today, there are no more calls soliciting help from my friends and family in the middle of the day. No need to awkwardly ask a colleague for a favor and finding myself in personal conversations I try so desperately to avoid. No need to call the taxi company that may or may not answer their phone or tell you a car will be there in 30 minutes. Getting a lift today is as simple as pulling out your smartphone and dropping your pick-up pin. That’s it, you’re notified of your driver, what they are driving, license plate and, most importantly, you can see a GPS map of where they are to know if you have time to shoot out that last email. The cost, ease and simplicity of Uber has turned the entire livery industry on its head.

Even with technological leaps that Uber has taken on an industry that remained fairly unchanged for the past half century, the most amazing part of the Uber experience, at least to our industry, is the transaction.

Read the rest of the article.

2. “Apple Pay’s missing one thing retailers crave: Data” – The mobile payments system diminishes the ability to track shopper behavior. This is among the reasons why some major retailers are not accepting it, writes the President and CEO of LoyaltyOne Inc. Bryan Pearson.

Once again loyalty marketers are finding new opportunities at their fingertips, this time courtesy of Apple.

The computer maker’s Apple Pay service, which offers one-touch processing, also touches on a critical issue for merchants: the need for a long-term plan on where digital fits into an organization’s loyalty landscape. But is Apple the answer?

The technology has many financial institutions and merchants buzzing because of its security features. With each purchase, Apple Pay generates a unique code used only once and then discarded. This practice, called tokenization, eliminates the need for the consumer to produce a credit card. It also sharply reduces the value of the data to potential thieves.

The issue, for merchants, is Apple Pay also diminishes the ability to track consumer behavior. This is among the reasons why Walmart and others have dismissed Apple Pay, according to news reports.

Read the rest of the article.

1. “The chicken or the egg? Loyalty will drive mobile payments” – Tiago Soromenho, founder of Mozido’s StickyStreet mobile loyalty solution, gives his view on why this is still a longstanding issue.

The conversation around mobile payments has grown undoubtedly louder.

Along with the wide-eyed optimism and excitement around mobile payments, there is also a healthy dose of skepticism. Some speculate that adoption will come down to whether or not stores can support mobile payments (i.e. upgrading POS systems to terminals that are NFC chip compatible to accommodate mobile payment solutions). Others have pointed to security and privacy concerns, or the fact that while cash may be a dying breed, the reason mobile payments won’t take off is because consumers still genuinely like to have a physical plastic credit card in hand.

It’s the payment industry’s chicken-or-the-egg conundrum: which comes first, mobile payments or loyalty? This is where I’d argue that mobile loyalty clearly comes first. Mobile loyalty is the onramp to mobile payments, not the other way around.