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It is not about the payment, it’s about commerce.

I recently read a very interesting article by Karen Webster regarding Apple and NFC payments, which after all was said done I came to the interesting conclusion that I believe Apple actually doesn’t give 2 hoots “whether it’s NFC or XYZ that powers payments, just that it all happens inside its ecosystem and that its platform is that which can both reinvent and monetize the commerce experience in a way that it can also control.” (1) In other words, bankers, it is not about the payment, it’s about commerce.

What is the payment anyway? It is the ending act in our modern commerce process, to transfer or exchange value for the good or service being received. We go through a commerce process (researching, selecting, ordering and then finally paying) that in too many discussions of payments is forgotten by bankers. In the banking traditional world, bankers helped to enable commerce by making payments easier, and faster.

Many banks are still thinking this way. The risk in thinking like that is that soon the bank will become irrelevant and interchangeable and lose control of the customer to the modern mobile commerce Eco-systems that will be created by others (including technology companies such as Apple) that focus on providing great customer commerce experience.

Imagine, walking into the mall and taking out your phone and speaking into it saying that today I am looking for X, Y and Z. Then envision having your phone tell you that Companies’ A, B and C, have an offer for you, and the application then helps you comparison shop (and learns what is important to you) and recommend a product all before you step foot in the store. Then once you are in the store, the store pushes to your phone other items you may be interested in, with offers in context, thus saving you time and money. Wouldn’t you want that?

If the answer was yes, that customer might want that, then, bankers, you better start creating that kind of commerce experience or you will be disintermediated by others, because a customer does not always need to use a bank to do banking. So, quit focusing on the payment, (we know you/we  can usually do that very well) and start focusing on commerce (where many consumers are not sure you do that well, or at all).

*1: Karen Webster, “Can Apple with NFC Ignite Mobile Payments?” payments/#.U_ua5RCGfLP


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