With the NACHA annual conference completed last week, people are ready to take the next steps forward. Changing the way consumers and merchants are doing business together is having a dramatic impact on the Payments industry at large. There’s more in play for this industry than the mobile focus, “target market” knowledge may be a big area where merchants need to tailor their IT initiatives. Banks and financial institutions need to heed all the research out there that concludes that a bank trying to offer a service to customers through the mobile internet without partnering is believed to be business model least likely to work
Professional Industry Perspectives from a Variety of Sources:
According to Patricia Hewitt in a Payment Journal Article “I sense now the Industry is ready to face its demons and has accepted the fact that the original payments business is no longer sustainable” She states “If King is right, and consumers want to save as much as they want to spend, then the foundations of the payment industry is being shaken to its core” from a conversation with Brett King, the keynote speaker at NACHA 2013.
In a story by Karen Webster on PYMNTS.com: Millennials vs. Boomers: Who Will Boost Consumer Spending? She states that the payments industry must be careful who they target. With much focus on the early adopter, highly enable mobile group called the Millenials ( people born between 1976-1995), the payments industry may not be targeting the group with the spending power. Karen discusses an article she read in Barron’s and makes this statement: “Milleninals probably won’t drive spending!”
From the CEO Series of PYMNTS.com: There is hope, CEO Keith James Stone from globalVCard paysystems states: “Market adoption. We’re dealing with legacy systems in most cases, retailers and merchants. It is an area that most people underestimate about innovating.” He also gives his advice as to what you can do to be great in this industry “Be fast, Be furious, Keep it simple and get to market quickly. Don’t over think things or build in a vacuum, get feedback from people who’ll use your app early on.”
Issues and Opportunities in the payments industry are abundant, Edgar, Dunn & Company’s 2013 Advanced Payments Report shows some interesting statistics regarding who will drive growth, what strategy they believe will be successful, and the success factors that will be key.
Diarmuid Mallon for ÜberMobile has written many articles about mobile retail payments, but in his newest article, “Mobile Commerce Isn’t Just About Payments”. He states “Mobile commerce is not just about a new way to make payments. It’s about an entirely different transaction medium. The mobile channel creates unprecedented opportunities for enterprises, merchants, brands and financial institutions to establish and maintain direct relationships with customers—and more customers than ever before.”
The article “Banks and financial institutions struggle with Partnering with Mobile Finance by Chris Skinner explains why banks are dragging their feet with regards to Mobile finance. Chris examines the challenge of taking a vertically integrated bank and breaking it into pieces that can be assembled as part of an alternative service, such as a mobile app. Mr. Skinner states, “That’s the extreme opposite of the end-to-end vertically integrated bank that owns the whole customer proposition, but this is exactly why banks are struggling with mobile banking models right now.”
This is but a glimpse of what is in store for the payments industry, we must view this sector from many angles to make the most of changes. It is our responsibility to continue to innovate to satisfy our customers and stakeholders. Partnering with a competent custom software development company will increase your ROI.