[Watch] Key takeaways from Mobile Payments Conference 2019
Last week, Comperemedia Research Manager Mishu Rahman Din attended Mobile Payments Conference 2019 in Chicago. The three-day conference explored why US payments practices are not moving at the same pace as the rest of the world. With promising new initiatives, collaborations and product evolutions announced, discussions centered around what needs to change in order to overcome the challenges.
Here Mishu shares three key takeaways from the conference:
1. Whether in-store or on device, B2C or B2B, brands need to shift from being a transaction processor to a convenience provider in order to be successful in user adoption.
Speakers across the many panel discussions emphasized that US customers suffer from app fatigue. As a result, there are more instances of user adoption failure when compared to European markets. Facebook is the closest US comparison to super-apps seen in other parts of the world such as WeChat in China which boasts 1 billion monthly active users (as of 2018) and combines social messaging and payments, among other features.
However, we are seeing more efforts from US apps and digital platforms such as Google Pay to become more of a frictionless, utility-based tool. For example, since May, United Airlines has been using Google Assistant to allow travelers to command their smartphone to open their digital wallet, open their UA ticket, and go through the entire check-in and boarding processes. During a panel, Jack Connors, Head of Commerce Partnerships at Google, emphasized that the main goal for all of this is to help businesses meet the customer wherever they are and that this kind of streamlining is only the beginning of frictionless user experience in the US.
Similarly, Gasbuddy is an app initially created to provide information on cheaper gas along a route that has evolved to include a parking finder and Pay with Gasbuddy, a rewards earning payment feature redeemable in free gas.
2. In a fragmented payments ecosystem, collaboration is key to embracing mobile payments.
To address the risks surrounding card-not-present instances, entities such as FIDO Alliance, W3C and EMVco are working together to create a new approach for secure remote commerce. FIDO Alliance is an open industry association with a focused mission: authentication standards to help reduce the world’s over-reliance on passwords. EMVco and W3C are also member-supported standardization forums. Since merchants online are collecting all kinds of information from customers, merchants need to move to an authenticated payment source where the customer doesn’t feel the pain of entering passwords and authentication information. The hope is that over time, there will no longer be custom solutions on merchant websites and, instead, will be a globally-accepted authentication standard.
3. Making transactions secure in an era of real-time payments is a primary concern for processors, merchants and consumers alike.
Mastercard recently acquired Ethoca, which has a network of 5,000 merchants and 4,000 financial institutions around the world. Ethoca has a history of clients who have faced up to 80% of their customer claims deemed ‘friendly fraud’ (chargebacks ranging from genuine to malicious). Solutions like Ethoca Alerts can help locate fraudulent credit card accounts that help to block such transactions without false alarms, while Ethoca Eliminator digs into purchase history to deal with chargeback fraud more confidently. Rich Stuppy, Chief customer experience officer of Kount, specializing in fraud prevention services, shared that in 2018 US issuers falsely declined $331 billion and ‘friendly fraud’ went from 7% to 15%. There were 23 billion instances of personal information stolen in 2017 alone, and 1,244 breaches in 2018; a strong jump in exposed records containing PII according to the 2018 End of Year Data Breach Report by Identity Theft Resource Centre. While instant payments comes with benefits and conveniences, there has to be the right checks and balances to bring about trust among the user base for ubiquitous adoption.
What we think
Overall, there is an opportunity for retailers to bring innovation and adoption to mobile payments, allowing customers to pay when and where they want, without compromising security. In the near term expect to see more usage of POS-free and facial recognition-enabled payment options, as well as one-tap online check-out to save customers time, ushering in a more ubiquitous era of invisible payments.