Banking Mobile & Online Payments

Monetising mobile the bank-friendly way

Written by Conny Dorrestijn

Banks should realize that consumers have turned to mobile devices to deliver turnkey services that enable them to receive personal service, says Conny Dorrestijn.

On June 11, the annual MobeyDay event will be held in Barcelona. Clear2Pay and Finextra have executed a survey to be launched at the event around the issue of mobile payments and big data.

Our premise as a company was (and is) that banks are best positioned to offer the customer a full transaction service that goes beyond payments in a meaningful manner by deploying the massive amount of relevant customer data they possess. Customers are already in tune with their mobile banking environment and don’t necessarily want another wallet, sign-in etc., but they do want relevant offers at the right time, which is at the point of sale, and the bank knows when the device hits the payment terminal. That’s the moment of truth for banks: moving up the value chain into the transactional life of the customer, not as the payment commodity at the very end. That is monetizing mobile, that is creating value, that is a customer experience to be proud of.

Executive (mobile) summary

The biggest challenge presented by the new reality of mobile payments is surely its monetization; how to generate meaningful and sustainable revenue from a customer channel that few banks fully comprehend. Of course, mobile banking isn’t a new phenomenon, as many banks have already put a toe in the water as evidenced by the widespread availability of bank apps that offer PC banking on a phone. But offering traditional banking capability isn’t enough, the mobile payment paradigm offers banks the chance to drive mobile commerce from the inside. By facilitating consumer/merchant transactions, banks can place themselves back at the core of all payments.

Getting up, close and personal

After decades of bank evolution from a personalized, branch-centric model to more efficient and convenient online payment services, banks have lost touch with their customer base. And in parallel, there have been seismic shifts in customer expectations. In recent years, consumers have turned to their mobile devices to deliver turnkey services that enable them to receive personal service without compromising their daily schedules. They can keep in touch with an ever-widening social network through the power of social tools – Facebook, Twitter, Netlog, Tencent – that link them to a steady flow of information and context. Consumers expect their network to devour each update they make, understanding their lives in new ways and keeping up with every event through a steady stream of feedback. But how does this impact their financial relationships?

Monetizing mobile – a chart for illustration.

The rise of the disintermediator

What role can banks play in this? Accused by the press of being ‘out of touch’ and ‘delivering little or no value to the consumer’, banks are now beginning to wake up to a new era where consumer is king, and therefore services need to be delivered that match this perception. The questions raised in this survey indicate how positive they will be in tackling them. New competitors are appearing that offer more attractive payment alternatives to customers that raise concerns about comprehensive bank disintermediation. The rise of PayPal, Google, Square and many others across the globe is credited to their ability to simplify the commerce process and mesh customers’ social networks with the high street merchant experience.

Intimacy issues

Banks have struggled with customer intimacy issues, mostly brought on by business streamlining. Having slowly migrated away from an autonomous local branch presence where decisions were based on branch staff intelligence, to a centralized model with decision-making based on algorithms, there has been separation from the customer. While the transactional environment was put in place to support e-banking and smarter ATMs, the engagement component was neglected in favor of transaction efficiency, thus losing invaluable intelligence information and customer context. The problem is evident: how do banks regain the trust of their customers without returning to a manpower-heavy infrastructure they no longer have resources for, and the customer no longer has time for?

Mobility. Context. Big data. Value

Moving beyond merely processing payments, banks must realign themselves to the core of transactions as the facilitators of commerce. It’s time to understand the customer in order to offer the appropriate service at the right time and in the right context. Customers are worth more than their cash balance and not all transactions utilize bank account transfers; the new currency is ‘value’. Managing non-cash value in virtual accounts is central to controlling the new streams of payment transactions with which we are faced. Mobile wallets have often been touted as the way banks get into mobile and alternative payments. However, classical mobile wallets often dilute a bank’s exposure and play into the hands of potential ‘disintermediators’ such as PayPal and Google. The virtual account that holds multiple customer value elements can be seen as a ‘super wallet’ as it consolidates customers’ cash balances, merchant vouchers, loyalty and coupons, with multiple mobile wallets, alongside MasterPass,, PayPal, Google Wallet and many others, and all fully bank-branded.

Loyalty recommended

By taking a customer-centric approach to payments utilizing the appropriate tools to offer extended services, banks can leverage their extensive customer base to reclaim the central role in all aspects of commerce. Banks are potentially in a unique position to truly understand their customers’ needs beyond the mechanics of simply reconciling incoming payment transactions. Only when armed with deep customer insight can banks truly flex their commercial muscle by bringing customers directly to merchants through exquisitely targeted recommendations, for a cut of the action (with the acting bank as an intelligent type of Groupon Plus). These new revenue streams can be realized when banks close the loop by enabling flexible and open payment fulfillment with multiple value currencies. Banks are also well positioned to operate loyalty schemes as a managed service on behalf of small and medium-sized merchants without their own capability.

Branch Manager 2.0

Central to this vision of reinvigorated banking services is a need to understand the customer. Banks are uniquely positioned here as no other competitive intermediary or wallet provider has as much high-quality customer data. The only question is whether banks can organize and act on this knowledge, as well as aggregate and make effective use of customer data from multiple sources.

Using big data to analyze and better understand their customers allows banks to capitalize on rule-based, real-time data processing. Through partnerships with dedicated, specialist companies with the proper tools and interfaces, banks can make the most of exabytes of data flowing into servers with intelligence on all their customers. This becomes the digital version of a branch manager, a type of ‘Branch Manager 2.0’, learning what goes on in the life of a customer and allowing the bank to make value-added decisions and recommendations for every unique person in their database.

Keeping the customer satisfied

Taking a more embracing strategy to mobile payments enables banks to add significant value through innovative product offerings. Customer acquisition rates rise in parallel with service level increases, yet exploiting the diverse customer intelligence readily available to banks takes them to the next level as commerce facilitators. Providing evidence-based advice and recommendations on merchant offerings based on product, demographic, location and lifestyle results in more sales, more loyalty and more repeat sales.

In addition to generating new revenue streams for banks through click-fees and hosting loyalty programs, the adoption of virtual bank accounts offers additional revenue on top of the traditional credit/debit card interchange fees, or their replacement if the regulators persist in pressurizing the traditional card revenue model. Merchants are incentivised to encourage customers to pay in the most efficient manner, or combine virtual value with cash to reduce fees.

Most banks may be slow out of the blocks to fully realize the potential of mobile payment services and the necessity of managing customer value. The 21st century is about understanding the customer and producing the right offer at the right time to the right customer. A bank that thrives in the new reality (re)engages with its customers by becoming the key custodian of all value transactions and empowering customers with payment mechanisms appropriate to their role, location and context as digital and virtual payments converge.

A full copy of the survey is available upon request: [email protected]. More news on this and MobeyDay at

About the author

Conny Dorrestijn

Conny Dorrestijn has worked for over 20 years in marketing roles in the international financial services field. Key throughout her career is the customer experience, a theme she has developed throughout her career and as the Financial Services Associate Partner at the European Centre for the Experience and Transformation Economies.

Today Conny actively serves as Head of Corporate Marketing & Analyst Relations for Clear2Pay – a 1200 plus staff payments modernisation company of which she has been a part since its inception in 2002.

1 Comment

  • Dear Conny three comments:
    1. It is not only the consumer who counts, in order to overcome the egg & chicken dilemma, the merchant should also be set at the center of the banking e-payment strategy. I.e That’s a big part of Square’s success, and what Paypal is trying to follow now.
    2. It not enough to provide full-transaction service. Compelling (or even seamless) transactions and services cause only in the best of the cases customer satisfaction. “Memorable experiences” create customer engagement and loyalty. Mobile, social, cloud and big data should combine to transform the present off-line shopping and payment into an enjoyable-personalized interactive experience.
    3. The check-out moment (at POS) is already too late to board your consumer. Why to reward or target your customer once he/she is about to leave? The real transformational power of mobile, social and big data (and here a credible Value Proposition for the merchants comes) relies on the possibility to have an impact on increasing foot traffic into stores or/and influencing/supporting customer purchasing decisions at store via personalization, relevancy and immediacy. All of this happens much before the customer is in front the clerk ready to pay (and leave).

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