Mobile is becoming the centre of commerce and consumers want an integrated payment service to purchase both online and offline, presenting great opportunity for Irish businesses to meet its customer needs. Convergence, speed of adoption, mobile payments and the digital wallet, facilitated by strong partnerships, featured at the event that mapped out the payments landscape for merchants.
“Consumers, retailers and technology developers will be accepting mobile payments within the next four years. Consumers will insist on mobile loyalty rewards and coupons, making their mobile shopping decisions based on this,” were the opening words from Nigel Motyer, General Manager, AIB Merchant Services.
Dr Phillip O’Reilly, Financial Services Innovation Centre, University College Cork, added that there is huge opportunity out there for merchants “by putting customers at the centre of their businesses and creating innovative value propositions”.
Jon Rutter, Director Product Development, First Data Corporation, took to the stage and urged merchants in Ireland to: “Make sure you do something, rather than sit back and watch – test and learn with mobile and e-commerce. Consumers have an increasing amount of power and will take business elsewhere if dissatisfied. You have to get ahead of that curve, get in touch with your consumer base.
“Over 80 per cent of the world population have a mobile device. One third of all Facebook usage and one half of all Twitter use is mobile. Consumer expectations continue to increase and the majority want a seamless experience. The goal of Universal Commerce is to give consumers the ability to have an integrated buying experience where they are in control, can do what they want, where they want, when they want.
“How do merchants do this? By adding value. In a fast changing world it is impossible for a merchant to be the expert in everything, so developing partnerships with best-in–class mobile payment services providers to win customers is essential. Consumer experience is key and ultimately that will shape the market.”
The ‘virtual or digital wallet’ was highlighted throughout the event: an integrated electronic consumer payment service that can be used to make transactions securely in both virtual and physical worlds. Mobile wallets are set to transform the way people access financial information, pay, save and communicate.
“The mobile wallet is not for everyone and there are many different variations (e.g. branding, open/closed, functionality). But this is where we are going to get to” concluded Rutter. “Couponing functionality, whereby consumers are automatically able to redeem, will be key to the virtual wallet and add value for the merchant. Applications to pay, check bank accounts etc. are more straightforward.”
Dr Phillip O’Reilly, Financial Services Innovation Centre, University College Cork, also presented at the event, “Looking at payment artefacts (paper, plastic, mobile) and in particular cash, is it going away anytime soon? No. Yet, there is demand in the ecosystem for multiple payment technologies. Contactless payments will, in the coming months, be incorporated into national policy. Yet, for consumers, the mobile payments ecosystem is still fragmented. There is a lack of standards and a lack of clearly communicated value propositions.”
Dr O’Reilly continued, “A Central Bank of Ireland study (undertaken by Millward Brown Lansdowne) in September 2012 revealed that consumers are satisfied with the current range of payment options available to them. Anything new will need to clearly demonstrate a consumer benefit.”
Pointing to the opportunities with social business – tweet and pay – Dr O’Reilly referred to the American Express partnership with Twitter which started out as couponing. “Social platforms offer a significant captive audience” he stated.
“What does adoption of mobile payments look like? Take the Octopus card in Hong Kong as an example. Here’s a card that facilitates contactless payments, accepts rewards, and provides discounts; it can be used for building access and is integrated with individuals’ accounts. Potential partners are across numerous industries: building, transport, retail, parking services, taxis, restaurants, financial services. Customer segments include tourists, residents, government and corporations.
“Security and value are the greatest concerns. For Irish consumers the key issue is trust i.e. what is the policy if something goes wrong? But they are ready to adopt, with one fifth finding mobile commerce easy and the same number willing to give up data for rewards.”
One in every two people joins Paddy Power via mobile applications, according to Michael Nolan, PaddyPower.com, “Half of our new customers are coming to us through mobile phones. Mobile is going to be the future. The question is how do you get there from where you are today? That is the key issue we had on our journey. Over five years, where traditional transactions remain stable, e-commerce has grown healthily and m-commerce has come out of nowhere to 39 per cent. We predict that this will increase to more than 50 percent with the value of other transactions still growing. Looking at where it is going, but mindful of where we are today, you have to differentiate at the front end with individual design but benefit from a shared back end.”
The take out from the conference was that technology is not the core driver; it’s the business model with a value proposition for all stakeholders, including business and consumers that will make mobile commerce work.
The key trend was Universal Commerce, a multi channel approach to buying and paying for goods and services, with digital and social media payments complementing traditional payment methods, not replacing them. While online security is still a concern as consumers become more confident shopping online the move towards convenience will be an increasing requirement of businesses.