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Financial Firms Seek to be Fast Followers in Digital Payments
Analyst firm Celent found that most respondents to a survey on digital payments seek to be fast followers who want to stay on par with the competition, rather than trying to be industry leaders.
The survey was part of the analyst firm’s third digital panel. In the first panel, banks and credit unions prioritized digital payments as a key area for further exploration.
Among the third panel’s other findings:
- Becoming and staying top of wallet dominates the participants’ concerns about digital payments. The participants are also worried about Apple and other technology giants changing strategy and taking on a more dominant role in digital payments.
- Most financial institutions believe they should offer digital payments under their own brand. Yet, in practice, they are more likely to engage around third party wallets than explore their own Host Card Emulation (HCE) wallets. However, they do push forward with peer-to-peer (P2P) solutions, with 51 percent having an offering in production.
- Visa Checkout and MasterPass have seen limited traction among the survey participants so far, but as many as 31 percent of respondents consider participating in CurrentC.
- Only the most optimistic 6 percent expect more than 20 percent of in-store transactions initiated via mobile in three years, but 42 percent expect to get there in five years.
- Twenty-nine percent of survey participants finished migrating all credit cards to EMV, while 17 percent are done with debit. However, many others are just starting with debit and prepaid: 71 percent of respondents migrated less than 20 percent of their debit and prepaid cards.
- Sixty-three percent of the responding credit unions replaced their credit cards as “big bang” (i.e., all at once), compared to 35 percent of banks. Accelerated migration is the dominant EMV strategy for debit cards, while prepaid cards tend to be replaced at expiration.
“It is clear that digital payments are very important to many financial institutions,” says Zilvinas Bareisis, a senior analyst with Celent’s Banking group and report co-author. “However, it appears to be an area in which many are struggling to determine how much and where to invest. Banks and credit unions should look where customers are experiencing most friction today, as it is an area where the financial institutions will be most vulnerable to attack from third parties. They should also accelerate EMV migration, especially for debit cards, to free up resources for digital payments.”
Source: http://mobilemarketingandtechnology.com/2016/02/01/financial-firms-seek-to-be-fast-followers-in-digital-payments/
