As technology continues to emerge, so, too, do opportunities in payments to innovate, and to engage and influence the consumer.
Those were among the recurring themes at this week’s 2016 All Payments Expo, which wrapped up in New Orleans on Wednesday.
Technology is making unprecedented changes to the way consumers behave and the their expectations around shopping, Blackhawk CEO Talbott Roche explained during a keynote address this week.
“Mobile devices are making them connected in a 24/7 commerce cycle in which they expect they can shop, purchase and pay when they want and how they want.”
Those same consumers are becoming more intimate with their devices. As a result they expect to be engaged within the confines of their social infrastructure, and they expect that level of engagement from the likes of banking apps as well as brands.
“Most people live their lives through these devices and become incredibly intimate with them,” said Ben Hammersley, Wired Magazine’s U.K. editor-at-large who delivered a special address during the conference. “And so at the same time, as we live our entire intimate lives through these devices, any other service going through these devices has to be judged the same way.
Technology is driving the need for payments to move faster and in real time. Financial institutions are paying closer attention to the payments space, and a Federal Reserve task force is exploring what needs to happen to improve the U.S. payments system.
There’s been both a rush and a reluctance to innovate. Financial institutions and merchants alike want to keep up with the rapid pace of technology, but regulations loom in the background. There’s plenty of buzz around mobile payments innovation, but innovating can be as simple as coming up with an idea on the fly to respond to a daily crisis, or as mundane as finding new ways to improve the processing infrastructure.
Some of that innovation is taking place at the point of sale, which is poised to become a place that helps foster a greater understanding of the customer through data, while also making the customer experience more efficient.
New ideas and innovations are also cropping up with fraud and security becoming a greater concern in payments, particularly as more retail sales move into digital channels. Brands are turning their attention to finding ways to reduce friction while still offering the customer protection.
When it comes to investing in innovations, it can be challenging to spot the right opportunities. Mobile wallet adoption has yet to gain widespread traction, and the number of wallets on the market has shrunk from 170 two years ago to about three today.
With innovation happening so fast, venture capital money can go out the window in by the fistful. Investors are challenged to figure out where to place their bets when it comes to retail payments technologies.
Gaining a better understanding of Millennials is key to survival. Millennials are coming of age in a world where mobile conveniences and social networks are the norm, and so their expectations are disrupting traditional banking, branding and payments methods. Word of mouth through social media trumps traditional marketing. They’re placing more value on experiences over material things, and that’s changing the way brands approach them.
Some of those same strategies apply to both Millennials and consumers at large.
Said Roche, “We are at the ‘apex’ of opportunity to influence our customer and to drive deeper levels of engagement.”