Manuel Romero, Multichannel Innovation at Barclays Bank Spain shares his views on the transforming payment industry and its holy grail, the go-to global digital wallet.
If you are interested in joining our exclusive group of guest bloggers -all bankers, insurers and financial services professionals working in digital / social media / innovation– I invite you to email us.
I am delighted to publish a fourth insightful article from an old friend of Visible Banking, Manuel Romero – Mutlichannel Innovation at Barclays Bank Spain. In his article, Manuel shares his views on the answer to the ever transforming payment industry, the global digital wallet.
As an industry observer, it seems to me that the payments industry is conducting a quest for its own Holy Grail: a solution that will transform our lives by transforming the way we shop/buy, the way we pay, the way we engage with brands. And that the one who finds it will be the hero of our time, and will become part of Corporate history. This Holy Grail is the global go-to digital wallet.
If you are familiar with Greek mythology or have seen a couple of American films, you will know of Perseus the demi-god, who was commissioned to bring the head of the only mortal Gorgon, Medusa, whose eyes turned people to stone. In this enterprise, Perseus was given four gifts: a cape of invisibility, a sword, winged sandals and the kibisis, a wallet that could hold any sizes object and where he safely stored the head of Medusa.
I wonder if what we are looking for is the digital version of kibisis. A wallet that can hold an object of “any size”: this is to say all my loyalty and rewards programmes, cards, cash and offers in one place. And for me, the closest thing to a Digital Kibisis is my smart-phone, a device that will represent 2/3 of all mobile phones in 2016.
And why do I think my smart-phone is my digital kibisis? Simple, because it allows all my different kinds of relationships with brands and people to fit into it, and all in the form of an icon, and with similar interactions between them. It is a combination of hardware, software and ecosystem that makes this magic. With my smart-phone and using Pingit I can buy using QR codes and pay friends or prompt them to pay me easily. With my smart-phone I can check my balances, transfer money nationally or internationally, or withdraw money from the cash point through my bank app.
I can compare prices, do my research and book my travels. I can check tickets, boarding passes and air miles with Iberia, Lufthansa or Air France apps. My wallet can help me to book a room in my favourite hotel and check rewards and promotions in Marriot or Starwood Preferred Guest apps. I can order a taxi in London and in Madrid and pay using the Hailo app.
However, you may argue that it may be a clunky experience, and that’s why I think we need more seamless connectivity between apps and services. A simpler registration process, a single sign-on or an universal authentication process. And this is going to be another Holy Grail quest, needing different solutions and companies, from social login to biometrics.
Barriers to the go-to global digital wallet
Every quest has its own difficulties, and I would like to indicate some of them:
1) Brands: increasingly, brands will want to have more control of everything related to customer service and the shopping experience (in-store and online). And that impacts loyalty & rewards programmes, couponing, marketing, CRM, and of course, payments.
We have already seen some examples:
MCX: an initiative led by US retailers that today represent 25 percent of total non-cash purchasing volume in the U.S and that aims to develop a new exclusive mobile payment network in which transaction and customer data will be the property of each merchant.
Starbucks: According to Berg Insight, in 2012 most of the $500 million spent in goods and services using a mobile wallet, occurred in a Starbucks using the coffee chains own smart-phone card app. The most successful mobile wallet app is an app that lets you buy coffee and pastries at a single business. Undoubtedly, Starbucks has paved the way for others to come by making both customers and salespeople familiar with the use of barcode scanner and a QR code to pay.