Recent changes in the UK payments market has meant there has been a shift to better serve the customer, a truly positive move by the financial services industry to fit around the life of their customers. The launch of Android Pay represents the latest in a line of services that bring improved functionality to users, which has recently included Apple Pay and will soon also see Remote Deposit Capture (RDC) for cheques speed the process of paying in paper cheques.
Capturing customer imagination
Each successive launch of a new type of payments technology offers people more functionality and flexibility, allowing them to use services that fit in with their busy lifestyles at the swipe of a mobile.
It’s great to see Android Pay coming to the UK, with the high penetration of Android handsets meaning the roll out of the technology will provide a large number of customers with an intuitive way to pay for goods and services.The fact that UK consumers have had access to this type of technology for several years through contactless capability built into payment cards should also mean that uptake is rapid – even if Android Pay will be competing with contactless cards for wallet share.
Besides paying for goods and services with NFC devices, remote cheque deposit capture technology enables an entirely different experience for customers. Who hasn’t struggled to find the time to deposit a cheque at a branch? RDC solves this problem, and will allow customers to use their phones to pay in money without going into the branch – a giant leap in service in the UK.
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Combined, these two technologies will help financial services fit in with the busy lives of modern consumers, providing a level of service that is in line with their expectations and already provided by other businesses.
Balancing the positives and negatives for banks
While these new functionalities are good news for the customer, they also give financial institutions a lot to think about. The roll out of NFC payments to mobile brings acceleration in the fragmentation in payments services. This could erode relationships between customers and banks, a major issue as challengers and monoline providers further dilute the market, and offer smart services to attract customers. Banks must also navigate high charges for NFC payments,for transactions under £5.
Treading the balance between meeting customer needs and desires for the latest technologies,while ensuring that services do not come in overbudget or chip away at established relationships is an increasingly difficult proposition for many financial institutions.
On a positive note for these institutions, new payments technologies can bring about significant cost savings. RDC technology is a good example of this, reducing time taken in processing payments and removing the need to transfer paper cheques in armoured vehicles. Linked to Faster Payments in the UK, cheques could become an instant transfer method rather than something that takes days, resulting in huge benefits for financial institutions and end customers.
Despite the challenges and teething problems that new technologies bring, all these methods of payment represent further steps forward, and drive innovation in the sector. Fintech as an industry is going through a massive amount of change that is reinvigorating the sector, with new banks and services all geared toward maximising customer service.
Although financial institutions looking to roll out these technologies to customers will have to consider strategies carefully, successful implementation will mirror the way that customers want to use these services – they aren’t thinking about the services themselves, they are thinking about life.