In the electronic payments world, the complex maze of payment product processors in banks, each dedicated to a payment type, led to the evolution of an envelope layer that would sit behind all payment origination channels and ahead of the core payments platform.
This intermediate sliver application was responsible for efficient orchestration of payment traffic on the strength of the business knowledge it carried. In the sphere of card payments, digital substitution is fast engulfing known market infrastructures and
rapidly replacing analog equivalents. Debit and credit cards in the humble card holder are fast being replaced as app icons on a customer’s phone wallet with merchant and mobile banking apps quickly morphing to embrace ecommerce. Cards continue to jostle for
transaction acquisition as they did when they were physical. Every buy transaction conducted using a smart phone leads to a decision point as to which virtual card is most appropriate given an unwieldy array of cards sitting pretty in mobile wallets. Customers
subliminally want to be saved of the task of making such a choice and a difficult one at that.
Could this be the time to conjure up something that could be the equivalent of a payment hub in a bank but one that sits guard to a card vault on a customer’s phone, deciding the right card for the occasion?
Delegating the thinking process
The customer could possibly have a variety of mobile banking apps on her phone depending on how many banks she banks with or have issued her credit cards not to forget the charge cards issued by retailers. With each of these entities, hard at work to transform
a regular mobile app into a commerce enabled mobile wallet, it is not difficult to picture a customer being unsure if a card she chose for a purchase is indeed the best. This thought process is getting convoluted by the sheer number of variables increasingly
getting involved for instance
- Using the which card carries the lowest APR, gives maximum credit period, highest cash back
- Exhausting the value of the gift / loyalty / reward cards present in the wallet first before a debit or credit card is utilized
- Recognizing that a card has an annual fee that has to be earned back through accumulation of cash points that exceeds the fee
- Deciding if a card can singularly fund the purchase and if not, pool card balances from other cards
- Avoiding overdraft fees caused by a personal line of credit linked debit card
- In case the purchase also entails getting some cash out, avoiding the unmindful use of a credit card that would carry a punishing cash advance interest
- Drawing from a credit card that is starting a new billing cycle against another that is nearing the end and in doing do extending the repayment period
Comparative card analysis on a 'just in time' basis is wanting to leave the domain of human mind. Ready to take up this delegation is the idea of a best card decisioning (BCD) app that would own a complex multi dimensional role involving wallet orchestration.
Card neutrality would be central to this concept. The charter would be determining the smartest, point in time selection of cards delivering supreme monetary benefits.
Outlining the contours
Loosely speaking, the BCD service bus app would ring fence the mobile wallet(s) present on a phone, wrap around them, handshake with the contactless EMV enabled card reader at a merchant terminal, self checkout counter or online. The job would entail storing
the cards identified in a lineup, reversing out the charges in a card syndication transaction when one of the cards fails. Its efficacy would ride on its ability to subject the card reference data to native decisioning rules in order to resolve card (s) from
a card grid, that would participate in the money movement and facilitate a ‘card not present’ payment.
The frictionless negotiation of the card terminal messages through to the chosen set of cards would make this app a mandatory feature on the precious phone real estate in the future. New cards / mobile purses on-boarded on to the phone window would automatically
register with this service bus app. Card issuers would scramble to keep card benefit profiles current, for the BCD app to take cognizance of, in order for their card to compete effectively in the race to be chosen.
The trend to substitute basic human functions would engender emergence of such card selection tools that seek to retain the pleasure of wireless value exchange by bringing home the perks.
Are the app artists listening?