Banks: Don’t Let the “Pays” Win Mobile Payments
Back when Samsung Pay, Apple Pay and the like were getting started in earnest, banks tended to take a sort of wait-and-see approach to the concept. Rightly fearing it might just be a fad, there wasn’t much more than cautious—if any—advance made in this field. Now that it’s pretty clear that mobile payments is no fad, a substantial portion of the market is sewn up in favor of the various Pays. That doesn’t mean banks should wave the white flag, reports note, as there’s still plenty of room here.
Word from McKinsey & Company notes that mobile wallets are currently handling about $300 billion in transactions in the United States alone, and any part of that pot is likely to be a profitable path for the business. What’s more, projections suggest that that number will, just by 2020, clear the $1.2 trillion mark, which will represent roughly one in every five dollars spent in the United States.
If that’s not worth going after by itself, likely nothing will make it worthwhile. However, it’s obvious that there’s more at stake here than just a pot of cash. Banks getting involved in mobile payments can help keep customers in the fold instead of jumping ship for a mobile device’s payment system, as well as keep access to the flow of customer insight that’s produced from having customers on hand.
Banks have long had one key edge when it comes to the customer base: trust. People trust a bank like few other things, particularly with their money. Banks have the psychological edge of vaults, guards, armored cars and other imagery that evokes trust; that trust can readily carry into the comparatively new mobile payments concept. By taking advantage of that trust, banks can keep customers in play and also get a piece of that steadily-growing mobile payments market.
There’s little downside here for the banks, and plenty of advantage to be had. By offering mobile payments, banks can not only get a slice of a steadily-growing market, but can also offer a service customers want. That keeps customers in the fold, and also lands banks a new revenue stream in the process.