Card Forum Panel: Mobile Wallet Opportunities, Pitfalls for FIs
When it comes to mobile wallets, Apple Pay, Samsung Pay and Android Pay garner plenty of headlines. But while the trio of high-profile “—Pays” has finally brought long-awaited consumer attention to mobile wallets at large, are they putting bank issuers at risk of losing control of the payments experience? And, if so, how do FIs fight to stay relevant in the mobile wallet age? Those were among the questions tackled by a group of mobile payments experts during a panel discussion at Card Forum in Los Angeles this week.
Fortunately for FIs, the panelists largely agreed that Apple Pay and its ilk should be viewed as an opportunity rather than a hazard for issuers. “OEM [original equipment manufacturer] ‘Pays’ are a powerful vehicle to enable issuers to reach consumers and provide a better experience and more secure way of transacting,” said Sirajuddin Nazir director, business development for digital payments, Oberthur Technologies. No matter which mobile wallet a consumer uses, he or she chooses which card to use within that wallet Sirajuddin Nazir based on the same criteria as choosing which plastic card to use from an actual physical wallet, Nazir noted. That means incentives and other value propositions an issuer can provide are just as powerful in the mobile environment as they are with a plastic card.
But FIs looking for a larger role in mobile payments can do more than simply enable their cards to be loaded onto an OEM-provided payment platform; they can develop their own mobile wallet apps. And FIs are uniquely well positioned to provide mobile payment services given the close and trusting relationship most consumers have with their bank, the panelists noted. “Customers are supremely loyal to their banks,” said Richard Steggall, CEO of white-label digital banking platform provider Urban FT. “We trust our banks, and we figure if they give us a mobile wallet, it’s going to be safe, secure and give us what we want.”
But one thing consumers certainly want is choice, which means FIs have to be willing to open up their wallet apps to cards issued by their competitors, observed Rusty Carpenter, vice president, financial instant issuance and mobile commerce, Entrust Datacard. “Proprietary wallets need to be open. If you have a Chase wallet, you need to be able to put a Discover or American Express card into it,” he said. “You have to allow your competition to participate in your own wallet and compete on the value proposition that wallet brings to the table—and a compelling value proposition is being able to put any card into it.” And given the commoditized nature of the payment itself, FIs need to differentiate their wallets in other ways, Carpenter observed, adding that smart devices provide plenty of opportunities to create value. “Smartphones know who you are, where you are and what you’re interested in [so FIs should] leverage that horsepower with things like digital coupons and the integration of retailer loyalty cards. It’s those value-added services that will make the determination of which wallets are successful.”
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