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August 4, 2013updated 22 Sep 2016 10:56am

£20 notes are just a phone away

Industry experts discuss the future of mobile payments at the latest Monitise conference in London.

By Duncan Macrae

For many people a bank is just a bank. Extending the bank’s brand into the e-commerce space throws up challenges and opportunities. How can a bank extend its brand into the e-commerce space and how should they support the brand as they do so?

Ben Green, head of mobile, Santander

I think the first thing is that the bank has to extend its brand into the customer’s general behaviour and day-to-day decision making – nudging the customer very, very gently.

When they wake up first thing in the morning and glance at their mobile they need to think ‘oh yeah, that’s how I’m going to run my finances’. It’s not an easy task in and of itself. But banks can nudge people gently, helping them to see their balance information so they start off the day knowing what they can afford to spend. That change is vital. Building the confidence and competence in how to execute payments. Encouraging the flow of money through a family, building that frequency and familiarity. That’s a pretty hard journey to begin with.

If you can do that then you’ll have covered the hardest ground and can move from payments into purchases. It can become a really strong, emotionally engaged relationship whereby customers look at the screen of their mobile when they wake up in the morning. It just becomes a very straightforward, obvious thing to do – check balance, make a few payments, buy something.

The emotional engagement almost becomes a secondary outcome rather than the brand forcing itself on people.

Benjamin Ensor, industry analyst, Forrester

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Interestingly, at Forrester, we’re finding that branding matters less and less. What we’re finding is that customers, particularly young customers, care about who is letting them get more of what they want and need the quickest and most conveniently.

The companies that succeed are the companies that are able to deliver to customers what they want as easily as possible on the device they want. It’s all about mobile mind shift, where customers just expect good services and information to be available on whatever device they have in their moment of need.

The companies that success aren’t necessarily companies with big brands. They’re the companies that are able to orchestrate this huge complexity in the background to deliver to the customer what they want in their moment of need in a way that seems completely simply and obvious to them even though it’s incredibly difficult and complex. It’s not about the brand – it’s about what you deliver to the customer.

Sandra Alzetta, head of mobile business and innovation strategy, Visa Europe

One key thing to remember is that consumers of all ages are now comfortable with online transactions. Last year was the first year that we saw Visa card holders in Europe spend more than 200 million Euros online – that was a mixture of e-commerce and m-commerce. Clearly there’s something there that consumers like.
What is key is that it has to be easy. It’s such a fundamental and you see so many examples of where that real fundamental box hasn’t even been ticked. It will fail.

It also has to be engaging. There has to be a reason to make the consumer think ‘this is for me’. It really has to be secure. When it comes to payments, security really does matter and I think that’s something that the banking world needs to really understand. Security must absolutely underpin everything. Banks need to offer security and build up trust.

Simon Andrews, CEO and co-founder, digital marketing agency Addictive

An admission – I’m partly responsible for marketing Howard from the Halifax a few years ago, so I apologise. But with Howard, we promoted mortgages and extended that into saving and current accounts.

It was easy because we had a huge branch network and we then built up online banking. The idea that banks help you make the most of your money, savings, current accounts etc, can be extended into online. If you can deliver on that then it will work. You’re helping people. It’s not straightforward but it can be done.

Digital consumers are getting younger and younger. Many kids today manage their money in ways that don’t require a bank. These are the potential banking customers of tomorrow so what can banks do to win them over?

Simon Andrews, CEO and co-founder, digital marketing agency Addictive

I’ve got a 10-year-old and 13-year-old who are digital natives. I ask them to do stuff for me and I’m quite clued up on this stuff as well. It is hard to deal with money at that age – the idea of needing a passport to withdraw money.

They still want £20 notes from me on a regular basis. The idea that you can manage and move money around digitally – the currency for kids’ birthday parties now is iTunes vouchers so it’s all done via email and it’s all electronic so it’s not a big step away from banking.

So I think they’ve got an expectation about new tools to help them work with money. How do you make a brand appeal to a 13-year-old? Perhaps with the help of the likes of Google and Apple.

Sandra Alzetta, head of mobile business and innovation strategy, Visa Europe

Trust and security are the huge differentiators that the banks have. I just cannot underline strongly enough the value of that. Do nothing that would in any way ever damage that.

Benjamin Ensor, industry analyst, Forrester

We’re definitely seeing younger users with different attitudes towards technology. In particular, they haven’t formed old habits that older users have formed, so their attitude to money and their assumptions about how things should be done are different and that makes them generally more open to innovation.

Less likely to do things in a traditional way. Does a 19-year-old or 15-year-old need a bank account? This is starting to become a real question people need to discuss. Is there a decent alternative out there. Probably not quite yet. But, certainly, if you’re a bank you need to start asking yourself why a teenager would want a relationship with you.

Ben Green, head of mobile, Santander

It’s been mentioned that they are potential banking customers but one of main ways people use p2p payments is among friends and families. There’s an awful lot being said now about mobile banking app being the lifeline to the Bank of Mum and Dad.

You have kids as young as six or seven running around the house using the Smart TV and actually, there’s something in it for them to make sure that mum and dad both have a banking app and that they have a bank account. Because the £20 note gets digitised and a text or phone call to mum and dad for that £20. The Bank of Mum and Dad likes a bit of theatre but it’s predisposed to pay out.

Eventually the £20 flows through that banking relationship and banks in general would be daft not to assume that they already have quite a groundswell of young banking customers. As they grow up and mature they will get into purchasing mode

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