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Marcelo, great post! This is one of the reasons why, I think, banks will generally be reluctant to provide third party access to their issuers via HCE. I think banks will focus on providing payment capabilities within their own apps - this will also ensure
that banks collect much more customer data and improve loyalty. Actually, this is likely to appeal to customers too - as a consumer you would know that there is one app (you bank's app) that can be used to pay at ANY retail location.
Hi Andrei, thank you for your comment. Let me tell you I agree with you 100% in the short term. Yes, they first need to focus on their apps and enabling their apps to become repeat use transaction tools for consumers, protecting their brand, improving their
customer engagement and adding lucrative VAS. But that's only the first step. The app ecosystem is very, very big, and banks, as powerful as they are, are only one actor in the payments ecosystem. Merchants for example, by their role in acceptance hold trump
cards that banks need. It is in the bank's interest to bring them and others into programs and enable them and their apps. Banks need to think how they can scale their mobile commerce initiatives and increase card distribution, usage and differentiation. The
back-end tokenization, cloud-based and on-device SW and risk management that enable secure HCE transactions allow banks to think of their app, not only as a single app, but as a hub for mobile commerce innovation. If banks don’t enable the ecosystem at large,
someone else will.
Yes, some segment of customers will look first to their bank's mobile application when they think about secure payments at retail.
Other segments of customers will be actively engaged in the merchant's application during the shopping experience and merchants will work to keep them there when the shopping experience moves to a payment event. Whether for the delivery of ads and offers
to drive up revenue per visit or to steer towards low cost payment options, the merchant will have an incentive to keep payment within the app where they can shape behavior.
Said differently, great point of view Marcelo. As much as one might want the payment to be linked to the bank app in all cases, it's not likely to work that way and the points raised in the article about the secure distribution and management of the payment
credential are spot on.
Exactly Hartung! Thank you for your comment. It's not intuitive to think about that looking from a bank's perspective of today's challenges. But when you look at the booming app ecosystems and how every brand wants control over their customer relationships,
there is no way a bank can hold that. But they can enable if they so choose...
Gentlemen, sorry, but I will have to disagree with your comments strongly – and this is why.
So the way I see it for the next 7-10 years: retailers have no access via HCE and develop own app using card-not-present via own hardware infrastructure – like Starbucks or Powatag.
Thank you for your comments and candor. I guess we will agree to disagree.
Banks do not operate in a separate bubble from other players. They have strong partnerships throughout the ecosystem and enabling these partners as the first step towards an open platform is an obvious first step. The technology to federate cards easily
to apps is out there. And as I mentioned the app ecosystem is too dynamic and if they don't enable the ecosystem at large, someone else will...