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Mobile payments set to dominate discussions at Money 20/20
EMV and bank innovation also should be hot topics next week in Las Vegas, writes Mobile Payments Today Editor Will Hernandez.
October 22, 2015 by Will Hernandez — Editor, NetWorld Media Group
The annual Money 20/20 conference starts Sunday, which means we're about to be hit head-on with four straight days of company product announcements.
But in between news flashes about which companies are coming out with what new payment products, executives will gather to discuss the latest topics in what has been a banner year of sorts for payments.
I'll be in attendance all four days, and the following are what I think will be the hot-button topics discussed at the conference.
Mobile wallets and consumers
In case you missed it this past week, consulting firm Accenture published a new consumer survey about Apple Pay use and the results don't seem encouraging on the surface for mobile payments in general.
From the press release:
Based on a survey of 4,000 smartphone users in the United States and Canada, the report — the 2015 North America Consumer Digital Payments Survey — found that while the number of North American consumers who know they can use their phones as a payment device jumped nearly 10 percentage points since last year, to 52 percent, actual mobile-payment usage remained flat, growing only 1 percent.
Accenture's findings shouldn't come as a surprise to the industry. Despite all the mainstream press about systems such as Apple Pay, consumers are more than OK with using plastic at the physical point of sale.
Another aspect of the study that shouldn't be a surprise is that millennials (are you getting tired of hearing about them, yet?) are the demographic group using proximity mobile payments the most.
Some 23 percent of millennials — people between the ages of 18 and 34 — reported using their phones to make mobile payments at a merchant location at least weekly compared to an average of 18 percent for other age groups, according to Accenture's press release.
I believe the industry needs to keep this in mind going forward because marketing efforts for the major mobile wallets have been hit or miss. If you can appeal to millennials in more ways than just the “cool” factor with mobile payments, that demographic can help grow the industry.
EMV
Oct. 1 came and went and I'm sure you've shopped at plenty of places in the past three weeks where you’ve had to swipe your card even though it had a chip.
Despite having almost three years to prepare for EMV, banks and merchants were caught with their pants down as the deadline approached. On the other hand, nobody in the industry expected every credit and debit card to have a chip, nor did we expect all merchants to have the capability to accept those cards. And the industry seems to be fine with it for now.
For the moment, the biggest issue to come out of the EMV liability shift is the argument over chip-and-signature vs. chip-and-PIN, the latter of which is the more secure option when it comes to chip cards.
The FBI caused a stir last week when it issued a warning that urged consumers to use a PIN with their cards. The problem with that proclamation, of course, is that the majority of EMV cards in circulation are not capable of working with a PIN.
As a side note to the signature vs. PIN debate, I was able to use a PIN with my debit card this past week at a local Petland. I was shocked, to be honest, but the transaction was a lone one, and definitely more than a minute. That's going to be so much fun for some merchants during the holiday season.
Bank innovation
This probablywill be the most-discussed topic at Money 20/20. We keep hearing and reading about how banks need to innovate in order to stay relevant in rapidly changing times, particularly with those pesky millennials. But is any financial institution really an innovator?
I spoke with a couple of analysts and executives last month at my company's annual ATM & Mobile Innovation Summit and both believe there isn't much innovation right now in the market. Heck, even things like Android Pay and Apple Pay are built on systems that have existed for decades.
Everyone is trying to be the next Uber, which completely changed several industries, particularly transportation. While some people get tired of hearing about Uber as a standard-bearer, consider how much has changed about the way we interact with mobile apps since the company debuted in 2009.
Financial institutions are showing signs of change. They're interacting more meaningfully with customers, and most of this is happening on smartphones. Banks also are reducing the physical footprint of their branches and putting more emphasis on technologies such as ATM-mobile interaction to fortify their self-service efforts.
Banks also are exploring how they can build products using blockchain technology.
This is just a very small sample of what to expect next week in Las Vegas. Issues such as security and regulation will also be hot-button topics, but I'll bet mobile dominates most conversations.
Please stay tuned to Mobile Payments Today and ATM Marketplace next week as we bring you coverage of Money 20/20 from different vantage points.
About Will Hernandez
Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.
