As this year’s Mobile World Congress wrapped up last Spring, the level of excitement in is brewing, quite literally, in the air. Beyond the product promotion and marketing efforts during the event, a few weeks prior a couple of key announcements by two major airlines were made that could further push forward efforts in mobile proximity and payments, again through the critical lens of a deep understanding of the context of customer experience.
JetBlue was first to the tarmac on February 10 with the announcement to support Apple Pay on select flights. The announcement outlines plans to equip onboard employees with 3,500 NFC-enabled iPad minis, which, in turn, allows for customers with the latest iPhone Apple Pay access and integration to in-flight services. With a deep understanding of the captive context, often struggling to pull out wallets and credit cards in cramped quarters, they will now be able to simply tap a button on their, typically more accessible, mobile phone. Moreover, the service will be linked to customer profile data that will enable crew members to identify frequent fliers, birthdays, and other information to improve the customer experience for tired travelers.
This initiative covers some of the key elements of effective customer experience, both empowering front line employees with the right information in the right context, and delivering convenience and simplicity to the hectic world of airline travel, especially for their top tier business traveler customer segment. From a technology side, the link between the iPad mini’s and iPhone 6 NFC and BLE capabilities, removes the requirement for wi-fi, a common impediment that hindered prior efforts across industries.
Moreover, the ‘halo’ effect of seeing your seat neighbor simply pull out their mobile device to get in flight services is a big win for Apple to migrate their customers to the new iPhone. As Wilson Kerr, VP at Unbound Commerce notes “Another very real upside of showcasing Apple Pay in the tight confines of a plane is that early adopters will be watched by all those nearby. The powerful ‘that was cool, how do I get that’ factor” is at play.” These same services will also be available on the upcoming Apple Watch, so fliers will soon make in flight purchases from their wrists.
Not to be outdone, Virgin announced on February 25, that it will be the first US airline to integrate with Visa’s new offering, Visa Checkout. As a multi-device backbone and similar to the Apple Pay model, it will not require customers to enter credit card information to create a low friction transaction while in flight via the Virgin dashboard, for those who have opted into the service. Adopting and differing from JetBlue, Visa is adopting another key theme in customer experience. That is, placing the customer’s decision first in device and access preference.
Visa Checkout will be available for fliers on any digital platform and mobile device based on the user’s preference and device. The service will leverage Visa’s ‘tokenization’ encryption standard, announced at last year’s Mobile World Congress. Again, with a deep understanding of the flier’s customer experience, Chris Curtin, chief brand and innovation marketing officer at Visa notes, the service is designed for one-handed use as most flyers airport movements are walking with one hand one their luggage and the other on their mobile phone. In this hotly competitive space, those nuances can be the ‘make or break’ for success in this space, with each player taking a different tactics based on their underlying differentiators.
There are many additional players in this race to reference, such as KLM’s social initiatives,Samsung Pay and its LoopPay acquisition, PayPal’s efforts, and the recent shutdown of Softcard (a Telco initiative) in order to migrate to Google Wallet, Virgin’s proximity implementation at Heathrow Airport, and on and on. These efforts all point to the same conclusion, airlines are moving quickly in mobile payments and proximity. Critically, these initiatives are primarily with technology providers and their alliances with payments back end service offerings.
What is a retail bank to do with these new entrants outside of their sector? Well, at the Mobile World Congress, Francisco Gonzalez, CEO of BBVA, is optimistic about the competition, “there is a threat element which I like because banking needs competitors. We need to be more efficient but we can also collaborate with them.” BBVA acquired US mobile banking startup Simple for $117 million and is collaborating with Dwolla on online payments. However, Gonzalez did note the legacy challenges at MWC. Similar to its peers, the bank’s legacy IT, termed at the conference, as a ‘spaghetti platform’ is an inherited legacy disadvantage. Still, Gonzalez committed to shaking up that model. Currently, just 3,000 of its 110,000 staff work on the digital side, but Gonzalez noted that in five years he is planning it would be a majority of the workforce.
So, after many false starts, could this be the break out year for mobile payments and proximity driven by a customer experience, context driven, and functional integration strategy? Are we no longer at the 33,000 view of the mobile payments in this sector but on the tarmac? Simply stated, if one were to follow the M&A and investments to date, this could be a major, and long awaited, push forward. Those enterprises deploying strategic mobile customer experience components in place today will be well positioned to swiftly navigate the upcoming market turbulence, and will be well positioned for the win. What was formerly on the horizon is finally moving to the forefront.