MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

Posts Tagged ‘Mobile payments’

Forget passwords. Pay with a selfie!

Wednesday, October 28th, 2015

From passwords to two-factor authentication, bio-authentication, and tokenization, both consumers and cybercriminals have forced the online and mobile banking industry to come up with innovative and convenient security technologies. The latest functionality announced to be available to US e-commerce consumers in the middle of 2016 is MasterCard’s new facial recognition-based identification method. Online retailers will be able to authorize a transaction by taking a snapshot of their face and blinking once (to prevent fraudsters from holding up a picture of the retailer and fooling the system).

Particularly popular with Millennials or the ‘selfie-generation’, using selfies to authorize transactions is a clear advantage to passwords/ PINs as it saves consumers from remembering complicated combinations of numbers or letters.

Just like other biometric authentication functionalities, ‘pay by selfie’ is surely on-trend but it remains uncertain how secure the new technology is. Biometrics that rely on static information like face recognition or fingerprints can be easily faked; the case of the German defense minister Ursula von der Leyen’s fingerprint cloned just from photos is a solid proof in this sense.

The retail banking industry is rushing its way in offering consumers innovative mobile technology functionalities but the next generation of mobile banking apps needs to include stronger security features to make cyberattacks impossible.

 

Finally the Google (Payment) Empire strikes back

Friday, September 11th, 2015

Google’s payment platform using NFC technology, Android Pay, announced earlier this year, has started to roll out in the U.S. today. Google seems to be back in the game of mobile payments with a promising start: over one million points of acceptance and gradually more announced to be joining. Like Apple Pay, the mobile payment solution loads automatically without having to launch an app, by simply unlocking the device. In-app functionalities are to be implemented later this year.

Google Wallet, the digital wallet forerunner in the U.S., will be automatically converted by app-update to Android Pay. However, the app has not been closed down but given an overhaul to serve as a P2P app (send and receive money).

Google’s Android has an impressive 79% worldwide market share, in the global market for mobile operating systems. Therefore, Google’s alternative to Apple Pay and Samsung Pay, has good chances to see early mainstream adoption among others due to retailers’ fondness of rewards schemes announced to become part of Android Pay’s functionalities soon.

It is surprising that it took Google so long to respond to Apple’s challenge. But there is no doubt that on a global scale Google has the power to become the leading mobile payment provider at the POS.

 

How Starbucks is winning the mobile payments war

Wednesday, April 29th, 2015

Technology giants, start-ups and retailers like Google, PayPal, Starbucks, Square, and Stripe have moved on from just threatening and competing against the traditional banks to dominating the mobile payments arena.

Starbucks is the new model of success in mobile payments with an impressive comeback after the unsuccessful partnership with Square in 2014. The Seattle-based coffee giant has made mobile payment strategy a top priority and continued to invest in its own in-house mobile payment systems. The result is remarkable: over 8 million mobile transactions per week, 16 million active users of its mobile app, which translates into nearly 19% of all mobile transactions in US stores.

The brilliant idea behind Starbucks’ “Mobile Order & Pay” system combines the convenience of a simple payment tool, which works on the majority of smartphones, with the benefit of a well-thought loyalty program. The app’s success is not only driven by the ease of payment (“shake to pay” and give a digital tip to the barista) but also by the remarkable set of supplementary features (loyalty program, manage Starbucks card, send Starbucks gifts to friends etc.).

There is yet no confirmation about a possible white-labelling solution of the mobile payment app. However, ‘Mobile order& pay’ will surely trigger a wave of similar solutions either brought up by tech giants or by other consumer companies willing to pay the price for a bespoke solution. Either way, given the rapid acceleration in mobile device purchases and millennials’ hunger for convenient mobile payment solutions like digital wallets, credit card companies and banks are vulnerable to lose a substantial number of mobile customers.

At MyPrivateBanking we believe that customers will choose a non-bank mobile app over a bank’s mobile solution if it offers more convenience and interesting add-on features. It is not enough for banks to launch their own mobile wallets. To gain market share and penetration banks need to think hard about the smart add-ons for their payment solutions: Loyalty programs, preferential treatment when ordering or buying things in high-profile store chains, and many other innovative features will require banks to think like FMCGs (fast moving consumer good companies) rather than old fashioned retail banks. This will be the hardest challenge.

 

Innovative payment options - Banks are slowly catching up

Monday, March 24th, 2014

The mobile payment industry grew substantially in 2011. There were already 212 million m-payment users at that time and the numbers have been growing significantly ever since. In past years, the largest banks worldwide were slow in adopting innovative payment functions, but now they are starting to catch up with industry trends. We will introduce some of the best payment options that we encountered while evaluating mobile banking solutions for the current Mobile Apps for Banking Report.


Contactless payments allow users to pay for in-store purchases by mobile phone without needing to provide a banking or credit card. CIBC Mobile Banking is an example of this, as it allows the bank’s clients to pay for their groceries, grab a coffee or buy a movie ticket with just a tap of their smartphones. Also, Itaú QR Card enables customers to make day-to-day payments by scanning QR codes of participating partners’ products, with the receipts being automatically forwarded to the client´s postal address.


People-to-people payments are ideal if users want to pay friends, family or acquaintances without needing their bank account details. Various alternatives are available on the market to satisfy different client needs. Commonwealth Bank of Australia’s app collection provides a solution for paying contacts by e-mail, mobile phone or even Facebook accounts. With the addition of another useful feature, clients of National Bank of Australia can also generate QR codes to request payments from their contacts.


Wallets commonly function like a virtual prepaid card that users can create by utilizing the app. BBVA provides such a virtual wallet and cross-sells small credit lines through an included financing calculator. The app allows users to directly calculate financing options and to apply for a loan in only two steps for purchases made with the credit card.


If clients of NatWest forget their banking or credit card at home they will still be able to get cash. The “Get Cash” option provides a code which clients can use to withdraw cash directly from any of the bank´s cash machines or at major supermarket chains.


Barclays Pingit has always been a front runner in mobile payments, allowing clients and non-clients alike to use the service. The bank has been popular for sending and receiving money using just a mobile phone, and in its latest update the bank has added QR code payment options for offline purchases.


Mobile payments are an increasing trend and there are numerous pathways which banks can choose to add more convenience to their customers’ lives and gain potential client interest. Banks need to pay attention to future trends and determine which payment methods will be dying off in the process in order to keep their mobile apps up-to-date and to win clients’ loyalty.

 
Subscribe