The five things all successful solutions have in common 1. It can be used by anyone, 2. It doesn’t have the brand anywhere with any funding name of the owner source This ties in with the first point and is crucial for banks but it’s also a factor the likes of PayPal Within the region they operate, successful took into consideration when launching . mobile wallets don’t restrict who its users should be. The more the merrier. All of the successful mobile payments schemes owned and operated in Scandinavia chose a It makes sense that banks apply the same name that is different to the name of their bank. open access that say, Facebook would, when It’s worth mentioning here that the only launching a mobile payments channel. If they successful mobile wallets to be owned and restrict use only to their own customers, there’s operated by banks in the entire world come no way to grow customer acquisition beyond a from Scandinavian countries. certain limit. More importantly, however, is that fact that when a new payments solution which When they launched MobilePay, Danske Bank allows ubiquitous access comes to market, did some research which found that when people will migrate there in order to pay Danske Bank was mentioned in an ad, potential anyone they like - not just customers of their customers thought they could only use it for same bank. Danske Bank transactions. However, when they didn’t talk about their involvement, the same Further, the solutions are powerful in that potential users saw it as a solution which could they’re able to be used by very small be used by anyone, regardless of who they merchants who previously operated on a ordinarily bank with. cash-only basis to people wanting to easily and quickly pay their friends to public transport networks to big high-street retailers and the list goes on. No third-party hardware or near-field “It makes sense that banks apply the communication (NFC) technology is needed to make a payment or a sale. The ability to pay same open access that say, Facebook anywhere, anytime, anyhow - all with the piece would, when launching a mobile of hardware everyone has with them 24/7. payments channel. 3. It doesn’t rely on near- Then we come back to the fact that to use an field communication (NFC) NFC-enabled mobile wallet, there has to be some kind of third-party hardware at the other end which reads the chip. Even Apple “What about or ?!” has introduced a built-in QR code scanner in I hear you say. See, the thing is, Apple Pay and their recent software updates. They know that Samsung Pay right now aren’t true mobile the future of mobile payments will be payments solutions. All they do is let a user pay streamlined - i.e. no extra hardware - and NFC for something by clunking their phone against prevents true payment freedom. a third-party device - the same exact way they can using their plastic cards. It adds no value to the customer’s payment experience and the 4. Virality merchant still has to pay an interchange fee to accept the form of payment - plus the We’re a collective social beast when it comes merchant doesn’t get any further insight into to online communication. It doesn’t take a purchase behaviour. It certainly doesn’t lead study to tell you that people spend way more to a healthier bottom in the long-run. time browsing Facebook, Twitter, Instagram and chatting with friends via WhatsApp and The other key factor to keep in mind is that Facebook Messenger than they do on their Apple has restricted access to its NFC chip, bank app. meaning that the only way people can pay with their iPhone using NFC is if they’re using When you’re limited to an 8-character Apple Pay or something sanctified by Apple. (or whatever) reference field when sending So even if a bank wanted to build an NFC money, how can you properly express your mobile payments scheme under their own delight with your purchase or your friend’s idea brand, they wouldn’t be able to let users of a weekend away? All successful mobile download it and use it on an Apple device. payment schemes allow users to have That cuts out a large chunk of the market, conversations with each other in the same way wouldn’t you say? they would use any other chat app.

If a recipient doesn’t currently have the mobile wallet installed, they’re prompted to download “NFC adds no value to the customer’s it in order to receive their funds. That’s been the payment experience. exact way all successful wallets have gained virality, to date. 5. Clear revenue strategy

All of the mobile payments solutions we think of when we think about successful schemes are perfectly aware of the long-term revenue potential that mobile payments, done right, will bring. Right now, no banks apart from those in Scandinavia have made money from mobile payments.

Two of the ways that successful wallets are making and will continue to make money include more successful marketing and upselling based on insights gained from personal data which previously wasn’t available.

Secondly, the EU’s second payment services directive (PSD2) will make it much harder to make money from multilateral interchange fees (MIF). Successful mobile payments will turn instead to relying upon third-party and merchant fee generation to make up the difference.

Get in touch Email: [email protected] Web: auka.io/contact-us Phone: +47 21 49 51 24