The coming new way to pay: with the rapid proliferation of handheld mobile technology, customers are changing the way they pay for goods and services. Two major credit-card companies discuss the products and services they are offering to meet the demands of this evolving payments market.

AuthorRowland, Kevin
PositionThe Future of Payments

THE CASE COULD BE MADE that we have experienced more technological change in traditional retail banking and the payments ecosystem in the past seven years than we have in the previous 40 years. The mass adoption of smart phones, tablets and other mobile devices allows our customers to check balances, transfer funds, pay for goods and services, and reconcile transactions in real time.

Handheld technologies continue to change how consumers shop, enabling price and inventory comparisons among multiple retailers within a few minutes and a few clicks. Technology has also given rise to new shopping days. For example, Black Friday typically kicked off holiday shopping. Black Friday now starts on Thursday evening and is quickly followed by Cyber Monday, the day most people go online to research for purchases, and Green Monday, the second Monday in December, which is the most lucrative day for retailers thanks to last-minute holiday shoppers.

Consumer behavior has changed forever. How we respond to these changes empowers us to retain and grow our customer base. The future of payments is now.

Solutions for changing customer behaviors

As bankers, we have to keep up with how our customers use technology. We also need to be aware of their new spending behavior, which was dramatically altered by the recent great recession. Who would have imagined that Quantitative Easement would be a frequently used term? Our customers want financial services providers that understand that their spending and technology needs are now one. They now spend less, buy generic, compare prices and favor debit and prepaid cards over credit cards as payment options. They expect that when researching the deals on their mobile devices, they can also make decisions to buy and have the payment options they want available on the same device. Nontraditional payment providers such as Google and PayPal have formed partnerships through which transaction data is captured on their databases and we only see expenses of the automated clearing house (ACH) items. As bankers, we need to offer solutions for these changing consumer behaviors. We need to think and act like our customers or risk losing them to nontraditional payments companies that tap into spending data information and make connections that we are missing. We know that we offer the best opportunities to keep transactions safe, simple and smart--and need to share this information with our customers.

As a banker, how do I compete? How...

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