Digital Commerce

Changing customer behaviour leads to new ‚touchpoints‘ in the customer-bank-relationship

Mobile as a trend increasingly influences customer behaviour, supply and demand – the payment transactions environment is no exception here. The smartphone has become the daily companion. Also, access to online shops and the release of payments in digital commerce more and more originates from mobile devices such as smartphones and tablets. Therefore, the share of m-commerce transactions in the overall e-commerce is continuously increasing all over Europe.

In consequence, merchants and providers are facing a new infrastructure and changing behavioural patterns. They have to react by readjusting their strategies. The catchphrase ‘multi-/omni-channel’ describes the growing convergence of e-/m-commerce and POS along with their substantial consequences on the business models. For the payment transaction market this means that there is increasing demand for online-offline payment methods which equally cater to stationary and online markets and, furthermore, have to provide international usability.

Along with the diffusion of smartphones there is also an increasing interest in mobile payment, i.e. the use of the mobile phone for generating payment transactions at stationary POS. The banks and payment service providers are competing against new players from outside the payment industry who extend their mobile offerings more and more onto the payment market. The reason for this is that mobile payment is very appealing because it opens up communication channels to the customer and therefore provides an attractive method for strengthening the customer relationship through the payment transaction. Ultimately, the current focus on small payment amounts complicates the mobile payment business for banks and payment providers because they only allow for very minimal margins.

Numerous new payment methods are currently entering the market. There are specific trends to be detected but generally, the individual potential of the methods are not even remotely exploited or even predictable. In the light of the experiences of the past we dare the prognosis that any new (mobile) payment method at the POS can only assert itself if it reaches as many market participants as possible – both on the merchant and on the customer side, if the use is easy for both sides and if it offers an added value compared to existing payment methods.

So, would there be THE payment method of the future? Is it possible that one single method can meet the requirements and wishes of all market participants? Which products and concepts are actually suitable for generating revenue and meet customer expectations?
The crucial factor for success is the customer’s perception of the payment process, the question if it is convenient and most of all secure, and if he himself can take advantage of it.
For the merchant, the key aspects, besides his cost for the payment process itself as well as the development of alternative payment methods, are potential extended service offerings and a minimal dropout rate throughout the process.

It is essential for payment providers to define suitable products and services at a very early stage, which both provide growth potential and guarantee them a secure position in the future. Successful business models of the future will – more even than in the past – be based on the provision of supplementary services and value added offerings which, separate from the actual payment process, has potential to generate additional revenue.
The focus rests on the value proposition for the consumer, a clear strategy for value adds and additional services as well as a fundamental support of corporate targets such as individualisation, customer value and growth.