Building Trust in the Digital Wallet: The Benefits & Challenges of Mobile Payments
From new innovations in bots and blockchain to a wealth of emerging digital wallets, the payments industry is in the midst of a renaissance. For this month’s ‘Insights On’ blog post, I asked Ted Fifelski of SimplyTapp and PayFone’s Rodger Desai about what’s next in this fast-moving sector.
What innovations do you see flourishing in the payments sector, and what challenges do you foresee for consumers transitioning to digital wallets?
“Value-added services are taking off. Digital is allowing ‘money’ to become more than just money, in that people can transact in coupons, dollars, bitcoins, points, etc (Click to Tweet). These different forms are becoming currencies of exchange for goods and services via apps, bots, and web. As for challenges, a clear hurdle is building enough confidence and knowledge around digital wallets for consumers to actually use them at the point of sale, instead of reaching for their wallets.” — Ted Fifelski, Co-founder at SimplyTapp
“Security and fraud are still top of mind for consumers thinking about switching to digital payments. In a world where we’ve become accustomed to catastrophic data breaches on a weekly basis, potential users have little reason to trust mobile payments and may therefore shun their use (Click to Tweet). Luckily, new technology is emerging to combat that problem. At Payfone we connect directly with U.S. mobile operators to authenticate mobile users and reduce the risk of identity fraud. For the user, technology like ours reduces authentication friction and increases confidence in mobile payments. For financial institutions and corporations, it reduces their fraud spending (which they can then redirect to other departments) and helps them tell the difference between legitimate customers and identity thieves. We’ve seen many industries flourish after adapting this technology, including banking, healthcare, insurance, and high-tech sectors. I hope that mobile security technology will expand further so that users regain trust in mobile payment platforms.” — Rodger Desai, CEO at PayFone
Indeed, providing consumers with valid incentives to adopt a digital wallet will continue to remain a challenge. Most remain unconvinced that digital wallets provide an incrementally better payment experience than simply pulling out a credit card and swiping.
Providing an experience that delivers consumer delight and value throughout the shopping experience will be key to conversion.
Facilitating pre-order of merchandise, identifying related items, selecting the most optimal payment instrument and applying relevant offers will all likely be key elements of a more holistic digital wallet experience.
An area that we will see flourish is the emergence of Artificial Intelligence as a fundamental innovation layer of the FinTech experience (Click to Tweet). AI will enable the FinTech experience to be more customized as well as tailored for users. Don’t be surprised to see a range of successful applications of AI that will help consumers automate investment goals, interact intelligently with FinTech systems and leverage digital assistants to best manage and select FinTech products.
How do you think brands can build consumer trust in digital wallets and mobile payments?