Some notes on mobile payments

The trend in payments is towards making the transaction invisible, a la Square and co.

The new ideal goes something like this: walk up to the counter, be recognised by face, greeted by name and be on your way.

Lets say you did, what just happened?

1) The payment happened in the background. The exchange of money becomes invisible, replaced by a more human interaction – eye contact, a smile, a greeting. Checkout is no longer about exchange, it becomes a place for interaction between the merchant and customer.

2) Your loyalty card was updated; as was your purchase history; any offers or points you could redeem, were. In exchange, the merchant(s) get to build a clearer picture of your purchasing profile, and engage you through loyalty schemes. Ultimately the data presents a huge opportunity for better engagement, better stock management and top line growth.

3) Predictive analytics will use your entire purchase history to upsell you something at checkout, like a case for the ipad you just bought. With open loop payments, the upsell can even come from a different vendor- you buy your ipad in Dixons, and as you walk out the shop receive a -10% voucher on cases from Amazon. As you approach perfect information, you approach perfect competition.

One implication

As transactions become more ephemeral, trust MUST increase. If you are going to make the payment invisible, the payment company must establish perfect trust with the consumer.

That means 2 things.

1) Transparency.
– Make the customer’s purchasing behaviour totally transparent, help him understand how and where and when he spends his money, help him manage it better. It’s no coincidence that personal finance apps have done so well. As money flows more easily and invisibly out of our wallet, we need to feel that we’re still in control. Transparency incites trust. It is the natural role of the payment provider to provide this transparency, it helps establish an element of trust and the idea that the provider is there to help the customer, not help the merchant get as much as he can out of him.

2) Brand
– A mobile payments provider is by definition new. Therefore the way it’s perceived is still up for grabs. At its core it exists to help the consumer. It’s faster then card, it’s easier, it handles your various loyalty schemes, it helps you get things cheaper, faster, and from the best sellers. It’s there with you all the time, in your pocket, helping you: it’s a personalised service, and it should feel personal. The best companies will achieve that. Brand values, look and feel, and a clear, communicable, vision will play huge roles.

LevelUp,, Starbucks,, paytango and droplet payments are all doing interesting things in this space and worth checking out.


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