This post is a guest blog focused on mobile payments by our friend and advisor, Tony Catalfano, former President & CEO of WorldPay. Tony is a mentor at ATDC, and sits on the Boards of Sudu Logistics and Daxko.
“Fintech” is a very broad term, so for the purposes of this article, we’re going to discuss “payments”. The way we shop today is very, very different than just 5 years ago. And it will be very different in another 5 years. Today, nearly every shopping transaction starts with a mobile search. That fact alone should cause any and every seller of anything to at least take a quick look at what happens when their business appears in mobile search results. Would you click on your link?
Mobile First or Die
I’ll use this article for a more poignant way to state how businesses – B2B and B2C – should be approaching mobile search:
The implications are clear – if you’re not able to reach your audience through mobile search or display, or you’re not providing a satisfactory mobile experience you will miss out compared to competitors who are.
If that’s not enough for you, McKinsey reports that “Google says 61% of users are unlikely to return to a mobile site they had trouble accessing and 40% visit a competitor’s site instead.” Still not satisfied? Here are 31 more statistics that should help anyone understand the incredible importance of mobile experience.
Now that we’ve established that it is now mobile first, let’s look at the mobile shopping experience. After starting with a mobile search, the shopping experience is becoming more and more self service. The users now rely more and more on mobile content availability and a full mobile experience. Further, the experience that businesses offer their audience to touch, see, or return any item after a purchase is what creates more sales.
More simply put, the experience leads to the payment. No matter how I shop, the shopping experience must be seamless and trustworthy. We now know what happens when it is not so.
What Drives Mobile Payments?
Ask yourself this question: knowing that you can buy anything from your mobile phone, why do you still carry around your credit/debit cards in your purse or wallet? Why don’t you pull out your phone in the grocery line or at the gas station or a city parking garage?
There are three main drivers of mobile payment usage, aka, why you still carry and use credit/debit cards for most of your purchases:
- Frequency – if you conduct a certain type of transaction often enough, you will invest in the time it takes to enter your credit card information into a mobile app, store it there, and move that app up to the main screen on your phone. If not, you won’t.
- Convenience – it’s much easier to use the ParkMobile app to park at Ponce City Market than it is to walk up to the machine, swipe your card, try to remember your parking spot, buy a few hours, pull the ticket, walk back to your car, unlock your car, leave the ticket on the dash, and then resume the reason for your visit in the first place.
- Rewards – even if it’s not all that convenient and we don’t do it very frequently, if there’s a reward for using a certain payment type, buyers are more likely to use that payment type.
Two Out of Three Ain’t Good Enough
You could use Apple Pay at the gas pump, but you don’t, because you don’t go to the same gas station every time, and you are not rewarded for using Apple Pay at the pump. You could get rewards every time you buy gas, but that means you have to get yet another credit card, which means you don’t get the rewards on your Amazon card. Finally, it’s just too easy to simply swipe your credit or debit card and get the gas, no matter what station you hit.
And that’s where we sit today: of the three drivers of mobile payments, we sometimes might get two. That’s not good enough to make anyone go all in on making payments with their phone. No merchant has yet figured out how to offer a great mobile payment experience that rewards you for your loyalty to that brand.
Mobile payment plus reward integration is the key to seeing the disappearance of cards at the point of sale.