More than just payments
Starbucks is responsible for developing one of the most successful mobile payments application so far. It has over 16 million active users, accounting for over 25% of in-store sales. The main reason for this success? You are rewarded for using it.
This shows that simplicity alone does not guarantee adoption and that integrating value-added services is key to establishing a compelling reason for use.
Banks and the ‘OEM Pay’ platforms have been quick to catch on. For example, when paying at selected merchants with Android Pay, loyalty points and offers are automatically applied, and initiatives such as ‘Android Pay Day’ offer monthly incentives. In addition, Royal Bank of Canada has integrated over 150 loyalty programmes into its HCE wallet, says Martin Cox, head of Strategic Product Marketing, Rambus Bell ID.
Another key to Starbucks’ success is that users can earn and deploy their loyalty points with any smartphone, anywhere. In comparison, the implementation of value-added services across the wider industry is currently quite fragmented, with loyalty and reward schemes often limited to specific merchants, applications, locations or operating systems.
In 2020, however, mobile payments will be far more rewarding. Over 3 billion loyalty cards are predicted to have been integrated into mobile applications by this time, so consumers can expect a far more consistent experience.
Biometric authentication beyond fingerprints
Although tokenization has cemented its position as the main method of securing mobile payments, biometrics have also come to the fore as a way to boost consumer confidence through an extra, more visible security layer. Take Android Pay as an example, it already supports a number of biometric authentication methods, from fingerprints to facial recognition.
Although biometrics are proving popular among consumers, there’s still a few issues to contend with. Firstly, only the most expensive high-end devices have the requisite functionality, which limits deployment. Some security challenges are also yet to be resolved. To take the example of a fingerprint scanner, the technology is not 100% fool proof and some implementations can be bypassed in several ways.
The fight against fraudsters, therefore, is taking us beyond these more traditional biometric methods. A frankly staggering number of body parts and functions can be used as a biometric measure. Technologies such as iris recognition, heartbeat analysis and vein mapping, to name just a few, are being touted as potential game-changers. Importantly, they can also be seamlessly co-opted into the payments process to minimize friction.
So, what does the future hold for biometrics? Firstly, upgrades and launches will mean the number of devices that support biometric authentication will increase. In addition, we can expect mobile payments to combine several biometric modalities when authenticating a user to enhance security and accuracy.
Mobile payments in 2020
We are arguably at the most exciting juncture in the three millennia history of payments. The pace of development and innovation is dizzying. Consider that we have not even touched upon the potential of Blockchain to radically simplify financial processes – although there is no shortage of content being written on this currently!
Although it is hard to predict exactly which direction the industry will take over the next few years, what is guaranteed is that mobile payments are very much here to stay. We can therefore expect the launch of countless new payment offerings over the coming years. What will separate the gimmicks from the gold dust, however, is whether they can truly simplify and enrich the purchasing experience.
Attending Money 20/20? Come along to booth 2525 to discuss mobile payments, and more.
The author of this blog is Martin Cox, head of Strategic Product Marketing, Rambus Bell ID.
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