- Financial services firms and banks are optimally placed to use mobile payments to generate new revenue streams.
- The ‘always on’, hyper-connected customer has sparked innovative mobile payment options such as digital wallets and Near Field Communication.
- Winning the mobile payments war calls for a collaborative, highly scalable approach to mobile technologies.
In the last few years, the explosive growth of mobile commerce has changed the game for businesses. Smartphones have shaken off their novelty status to radically rewrite the way consumers communicate, absorb information and pay for goods and services.
Embracing a multi-channel strategy is no longer about gaining the competitive edge – the ability to connect with customers across multiple touch points has become a matter of survival.
The PwC Dialling Up a Storm: How Mobile Payments Will Create the Most Significant Revenue Opportunities of the Decade for Financial Institutions report offers powerful insights into the payment habits of this new, connected customer and serves as compelling call to action for businesses to take the mobile channel seriously.
According to the research, the volume of mobile payments in Australia will hit $250 billion in 2015, recording compound annual growth of 70% since 2010. This dramatic jump in m-commerce transactions signals a huge opportunity for businesses, with mobile payment volumes set to capture almost 10 percent of the country’s small value transactions.
For the financial services sector, the rise of mobile payment volumes opens up fresh avenues to capitalise on existing revenue streams and move towards an agile way of doing business.
Banks and financial institutions enjoy high customer engagement levels, a fact that puts them in an optimal position to use mobile banking to drive growth. They are also poised to create a more personalised offering for customers, by embracing mobile coupons and virtual currencies and tapping into location-specific functions such as GPS.
This new channel of service not only offers benefits to the consumer, but according to PwC analysis puts more than $20 billion in play for financial services industry participants through new revenue opportunities and loss mitigation. The report outlines that failure to embrace the mobile channel is no longer an option, with the threat of potentially damaging brand equity and losing loyal customers to digital savvy competitors.
Aside from mobile banking, Near Field Communication (NFC) and digital wallets are emerging technologies that are rapidly gaining currency with the time-poor, hyper-connected customer. NFC, which lets shoppers cast cards aside to pay wirelessly for purchases via their mobile phones, offers unparalleled levels of convenience.
The digital wallet is also poised to revolutionise the way businesses transact, allowing customers to make mobile payments while securely storing their data. Although Google spearheaded the mobile payments war with the launch of the Google Wallet product last year, this innovative payment method is also being embraced by the likes of Visa and Mastercard – each credit card giant has rolled out a unique offering in a bid to become the vendor of choice for digital transactions. In particular, Visa’s v.me service offers cross-channel functionality and a personalised payments feature that responds to markets across the world.
According to the research, winning the mobile payments war depends on an open and collaborative approach and a commitment to building partnerships with other players in the value chain. It will be interesting to see how other financial services players evolve in this space.