Rambus CMO Jerome Nadel recently penned an article in Global Banking and Finance Review that explores how banks can help accelerate the adoption of mobile wallets. As Nadel notes, many payments players, including banks, have not been able to provide sufficient incentive for consumers to choose digital wallets over physical payment cards.
“Consumers are expecting more as they look beyond a payment experience to a buying experience. Which is why, in part, a study by Accenture found that while 52% of respondents are ‘extremely aware’ of mobile payments, only 18% use them on a regular basis,” Nadel explains.
“By taking a ‘walled garden’ approach to working with partners, OEM payment methods have slowed down their ability to react with agility to consumer preferences and needs, which hinders services innovation on the various platforms.”
As Nadel points out, there is good news for banks who want to avoid transaction fees related to providing services via OEM payment methods. More specifically, financial institutions can now move closer to the consumer, thereby helping to accelerate the mass adoption of mobile payments and mobile wallets.
“Banks and merchant acquirers can provide a more rounded consumer and mobile experience — one which combines multiple forms of digital value, whether payment, loyalty, discounts or coupons from favorite brands, all in one easy-to-access digital wallet,” he elaborates. “When integrated with beacon and geo-location technologies, these digital wallets can offer consumers real-time, personalized offers that enable strong relationships with the consumer over time.”
Popular services, says Nadel, could also include the ability to buy and send digital gift cards through an app, along with support in-app payments for in-aisle shopping to ultimately enable payments anywhere, anytime.
“These services can also offer a history of transaction receipts, using data analytics for the consumer, visually depicting how and where they spend their money which helps better manage bank balances and payments,” he continues. “To do this, banks can offer an open, modular, and scalable platform to enable them to work with partners and integrate multiple APIs across the ecosystem. In doing so, banks have access to the transactional data that informs the new products and services. Open platforms can [also] integrate with existing systems so that banks don’t have to replace their infrastructure if they choose not to.”
In addition, says Nadel, consumers also want to know that they are using trusted services. As such, security should be considered “a key element” that is baked into the foundation of the platform. While banks are already familiar with tokenization technologies, they can now extend the registration, authorization and secure provisioning capabilities to support supplementary features that mobile wallets enable.
“When deploying mobile payments, banks needs to consider investing in open platforms that can cater for varied customer needs and offer functionalities that complement the total user experience by digitizing items of value from the physical wallet,” Nadel concludes. “By combining this capability with robust security, banks and merchant acquirers can become a powerful enabler and accelerator of mobile payments, giving them the ability to seize on the transactional revenue promised by industry analysts.”
Interested in learning more about mobile wallets? You can check out our Unified Payment Platform product page here and our eBook on the subject below.