Their latest report, ‘Game of Phones: The Giants’ Power Plays in Mobile Payments’, investigates the current state of play in OEM mobile payments and analyses their points of control in devices and now, increasingly, also in commerce.
It evaluates a number of hypothetical scenarios that banks may face in the future and explores the potential impact they may have on the strategic options available to them.
It also investigates possible steps that the banks can take to stay relevant to customers, and explores why it is important for banks to remain vigilant relative to what Apple, Samsung and Google are doing in this space.
According to Sirpa Nordlund, Executive Director of Mobey Forum, every bank will have to decide between playing the mobile payments game fully and retain a day-to-day interface with their customers, or accepting a future as a back office utility. She adds that banks need to stop looking for short-term profitability and accept mobile payments as the cost of keeping them in the game.
The report adds that banks who are hesitating with their offerings on mobile payments via connected personal devices are likely to be doing so because they can identify no financial return on investment. They see little evidence of added revenues, new customers or transaction value.
However, the industry is in the middle of a big change. The younger generation is going completely digital, and will base their decisions on choosing a trusted partner for financial services based on their degree of digitization. To differentiate themselves to consumers and to motivate them, banks will have to add extra value in the form of value added services (VAS), or other tools that provide consumers with help in managing their money or achieving other financial targets.
Separate research from KPMG20 and from Zapp21 suggests that mobile apps are a key factor in people’s decisions to switch banks. The Zapp research, carried out in 2014, revealed that 21 million Britons (approximately one third of the entire UK population) would be willing to switch banks to access mobile payments, with 7 million planning to do it in 2015.
Also, sentiments expressed on social media suggest that banks that are late to offer mobile payments may face criticism from their customers.
The report is a compilation of insights and analysis from experts’ discussions at Mobey Forum’s HCE (host card emulation) Workgroup.
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