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Customer journey is key to mobile payments success

Having spent the greater part of the past two months on the road, speaking and debating with digital bankers, payment thought leaders, mobile evangelists and the like, it has become clear that for mobile payments to succeed, it must focus on the customer journey rather than the technology. By customer, I refer to both the payee and the beneficiary— the two main parties involved in payment transaction, whether it be P2P or P2B. Considering that adoption by consumers (as payees and/or beneficiaries) and merchants (as beneficiaries) is fundamental to the success of any mobile payment scheme or alternative, I think the key success factors can best be categorized into two buckets- usability and cost.


Consumers aren’t looking for a new way to pay; actually, consumers don’t like paying. Make it hard for them, and they will dislike paying even more so. I have come to the conclusion that up until recently, most mobile payment schemes have been too focused on replicating current payment methods through a mobile phone, and too little focused on improving the payment experience itself. This is why, in my opinion, critical mass adoption for mobile driven payment schemes have failed in the past. 

But, with its simple, easy to use mobile interface, Barclays’ Pingit has revolutionized mobile P2P payments. Its’ not necessarily about the technology, but rather leveraging existing networks and interfaces to deliver a user friendly payment experience that will make this and similar payment schemes attractive to consumers. VocaLink in the UK have lined up an exciting partnership that should help banks drive mobile payments adoption and usage amongst banks and consumers at lightening quick speed.

Expect similar apps to be launched by financial institutions around the globe, but with improved features and functionalities, such as cash withdrawal at ATM, small business payments, and real time payments across banks and payment networks.


Transaction cost is frequently considered when considering which payment scheme to use/accept. I have seen it time and time again in Madrid and other European cities where taxi drivers are reluctant to accept credit cards because of the cost associated with the transaction. On the other end of the spectrum, I have many times searched for alternative payment solutions because of the fees brought upon me by a bank or merchant when wanting to enter into specific transaction.

The same can be said regarding mobile payment schemes- stakeholders are reluctant to use or accept a mobile payment scheme either because it is either more costly than existing alternatives, or the merchant/consumer are unaware of the associated costs to paying with a mobile phone.

Successful schemes today are those that have been able to compete on price with the existing payment schemes, or drive adoption through pricing transparency. A great example of this is Bankinter in Spain, where P2P payment transactions are being driven to the mobile phones through their no-fee policy for digital channels, as compared to branches or call center where the consumer is charged a transaction fee.

Exciting times lie ahead for mobile payments for all involved stakeholders; I truly believe we are now at the cusp of game changing mobile payment services. While we may have heard this same story time and time again over the past few years, I think there has been a refocus on efforts being driven from the different stakeholders in response to digital and technological changes, but its the consumers and merchants who are at the forefront of the service design today, and not the technology which is enabling this change.


Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 18 April, 2012, 16:02Be the first to give this comment the thumbs up 0 likes


Props to you for writing one of the most sensible articles on this subject in a long time. I remember reading something to the extent "there's no pain in payments, there's a lot of pain in shopping". As of now, using a mobile payment based on standard credit cards is more painful than using the plastic itself. I've experienced the problem of cab drivers in India going out of the way to avoid accepting credit cards. If merchants, including cab drivers, complain about 1.5-2% credit card swipe fees, I wonder how they'll react to mobile payments, on which they're liable to pay the higher CNP interchange fee even for proximity payments, and that too, after investing in NFC POS terminals! 

In addition to Usability and Cost, I'd add "Business Case for the Service Provider" to the list of critical success factors, especially when the service provider is a multibillion dollar behemoth (like Barclays) and not an exit-happy startup (like scores of them). 

PS: One small correction to another unblemished article: When you say "I refer to both the payee and the beneficiary", I think you really mean "payor" and "beneficiary" since payee and beneficiary refer to the same entity, namely, the recipient of the payment.

Andres Fontao

Andres Fontao



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12 Oct 2011



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