Evolving the Digital Payments Consumer Experience

By Karen Pascoe, SVP, Experience Design, Mastercard

Karen Pascoe, SVP, Experience Design, Mastercard

We’re in the midst of a 4th Industrial Revolution as whole industries are being transformed and people are moving from the offline and disconnected world. This is the digital story of our time: everyone and everything is becoming connected. And this connectivity is transforming the way consumers interact…and now transact. Consumers are looking for a payment experience that works as well on a mobile phone as it does on a browser or in a store.

Digital commerce is evolving rapidly and expected to account for more than a quarter of all retail commerce by 2023. So digital payments are here to stay, with consumers embracing them for convenience and expecting that transactions are secure.

"Our research has shown that consumers prefer their bank to manage their digital payments, which allows for an easy extension of online and mobile banking capabilities to move into payments."

It isn’t just the browser or the phone. The average consumer has multiple connected devices. We often see purchase decisions going across devices, from mobile to browser, tablet to mobile, etc. At Mastercard, we expect this trend to continue. Internet enabled devices are growing exponentially, with over 6 billion smartphones and 18 billion connected devices in the next few years alone. In essence, every device can be a commerce device.

What does this mean for the consumer experience?

We are entering a world where payment enabled smartphones, tablets and browsers will coexist with fitness bands, car key fobs and smart jewelry for secure contactless transactions. We have already payment enabled a smart fridge, chat bots and in-app purchases. This space will continue explode with innovation interplaying between connectivity, devices and convenience. Consumers will ultimately want a way to a pay that transcends the phone or browser ecosystems. Something that just works, seamlessly and safely. A way to pay that will be portable, personal and even fashionable.

When we think about a mobile payment experience in practice, what you are really doing is answering three questions: who are you, are you in fact you and what can you do. The first and the third questions are have long traditions with KYC (know your customer) compliance, available spending and fraud systems. It’s the middle question, verifying that you are in fact you, that makes or breaks the experience across mobile and devices.

In a world where seamless user experiences are an expectation, it’s important to have advanced security that is easy to use. At Mastercard, we take a multi-layered approach to security including the latest in tokenized card credentials, EMV like cryptography and sophisticated fraud monitoring. We pair that with biometrics and other forms of validation that make this easy on consumers. For example, our Identify Check Mobile service allows consumers to use selfie’s or their fingerprint to verify identify. This allows consumers a choice that works for them.

What does this mean for banks?

The broader shift to digital is an excellent opportunity to provide a differentiated consumer experience, leveraging the best of a bank’s capabilities with best of breed digital services. We are increasingly taking an API-first approach with our digital services. This let’s us obsess about a great consumer payment experience that is also an easy to integrate experience for banks.

With Masterpass, our secure commerce capability is designed to be integrated into a bank branded standalone digital payment experience or included into existing online and mobile banking channels. This allows consumers to checkout via a branded experience, in a store, in an app or online. From a design perspective, we’ve worked extensively with consumers to ensure the experience is seamless from end-to-end.

Beyond being a branded solution, we’ve geared Masterpass to be single sign on for a consumer to the bank’s system. This allows consumers to use their existing bank login to sign in and quickly opt in to Masterpass and start using at checkout.

What is a good starting point?

When I speak with customers at our issuing banks, this question comes up often. The foundational building block is to ensure that you are digitizing your card account credentials. Our Mastercard Digital Enablement Service allows your consumers the ability to access all of the capabilities that come with their card via their digital devices.

Looking at the consumer experience, our issuers wonder whether to put digital payments into an existing consumer experience or to develop a standalone digital payment capability. There are a few key considerations here, including time to market, knowing your consumer base and how fast to ramp your digital investments. Sometimes a standalone payment solution can have a faster time to market – with the ability to be more iterative in development than integrating into a broader banking experience.

For the consumer experience, we find that “financial control” resonates strongly. Consumers like to know simple things, like available spending and recent transactions, as well as have the ability to categorize spend. Having a standalone experience may allow you to give a different visual emphasis to things that are more relevant to payments than banking. Loyalty is another hot feature with consumers and may be key to driving more repeat use. If the broader banking or servicing experience connects well with payments, then integrating into existing channels may make sense. If your consumer segments are highly engaged with mobile, it may make sense to craft an experience that is more streamlined for payment.

Regardless of where you start, the digital payments market is evolving rapidly. At Mastercard, we’ve adopted agile development practices that allow us to take a more iterative approach to development. We bake extensive consumer insights, testing and analytics into our process. This allows us to have a steady stream of feedback to drive both continuous improvement and continuous innovation.

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