Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Top Stories

Claiming a share of the contactless payments markets: why banks must act now

10 a

By Ted Bissell, mobile business expert at PA Consulting Group.

Contactless payments (CP) are expected to take off in 2016[1] when analysts estimate that Near Field Communication (NFC) transactions will hit $74 billion[2] worldwide. With early pilots showing customers would quickly increase spend through this channel[3], this represents a significant growth opportunity for banks.PA Consulting Group

However, so far, banks have tended to ignore CP; even the most engaged banks are only conducting CP pilots, with a small minority launching full scale solutions Meanwhile, non-banking institutions such as PayPal, Google and the Isis Mobile Payment Alliance have become the standard bearers in pioneering mobile wallets, NFC and their supporting infrastructure. The leading solutions are moving toward marginalizing banks by substituting bank account usage via cash or debit cards with proprietary pre-paid cards, cloud wallets or credit cards – and 48% of Americans interested in CP say they would consider substituting their traditional bank account with a mobile wallet if they could [4]. At this rate, non-banking institutions will soon control the CP infrastructure, demanding some or all of the transaction fees.

Unless banks move to increase their influence in the contactless payment market now, they risk relinquishing much of their traditional role – and fees – to major non-financial players. In other words, banks need a more aggressive CP strategy.

Prepare to take action now
The world’s five leading smartphone manufacturers have either already included or are expected to include NFC support in their next handset upgrades, which should kick start the technology-adoption lifecycle. With early adopters coming soon and the rise of non-financial companies, banks need to be ready with at least two strategies that can be implemented very quickly to simultaneously grow this market and avoid disintermediation.

Identify possible scenarios and develop scalable solutions
With different players taking so many different approaches, banks should prepare solutions that can be scaled quickly in response to the most likely industry scenarios. This means thinking clearly through the different permutations and trigger points for abandoning or pursuing alternative strategies. It also means ensuring not only that the strategy is clear but that practical plans for scaling sourcing arrangements, in particular, are in place.Ted-Bissell

Capitalise on customer trust
Early adopters may already be convinced of the benefits of CP, but banks need to invest in convincing other consumers and merchants that the way banks are implementing CP is safer, more convenient and more cost-effective (and, for consumers, perhaps more fun) than the approach being taken by technology companies – not just during the transaction but beyond. Here, banks have an edge; customers trust banks more than technology companies to look after their money[5] and already rely on banks for mobile banking. A successful campaign could help accelerate adoption of CP and, once banks’ solutions have reached critical mass, it will be inconvenient for merchants and consumers to switch.

[1] Gartner Says Worldwide Mobile Payment Transaction Value to Surpass $171.5 Billion
[2] NFC transactions to reach $74bn by 2015
[3] New MasterCard Advisors Study on Contactless Payments Shows Almost 30% Lift in Total Spend Within First Year of Adoption
[4] 48% of Americans ready to use a mobile wallet, considering alternatives to bank accounts
[5] Customers want mobile wallets form banks over other providers

 

 

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post