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Payments now and in the future

by dotMailer on Jun 27, 2012

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Today APs account for €165bn of global e-commerce transactions across the world (22% of total transactional value) so e-tailers that only accept credit or debit cards are potentially missing out on a huge proportion of global customers.Offering alternative payment methods makes sense for retailers. While many are clearly happy to use credit or debit cards, there are potential online consumers that would prefer to use methods such as PayPal as they have concerns about fraud, or have no credit or debit card due to debt issues. Retailers such as Kiddicare and Firebox have sensibly covered all bases, and allow provide plenty of payment options for customers. But while major global online retailers may consider different payment options, the dominance of card payments and PayPal in the UK means that we are unlikely to see a rush to AP methods in the near future.
To help put my some structure to where we see the future of payments I am going to focus on 5 key thesems that we believe arehtmian influencers driving change and enabling inovation.
Mobile commerce is set to revolutionise the way that consumers engage with brands, but marketers don’t seem to be putting it to good use yet. According to KPMG, mobile payments are set to reach £591bn by 2015 while Gartner predicts that 190m people will use their mobile to make payments in the next 24 months.The potential for marketers is obvious, however in order to take advantage of this growing market they must first understand the full scope of what mobile payments entail.Like in the early days of e-commerce, there is some confusion as to what m-commerce actually is. The simplest and most accurate description of m-commerce to me is any transaction made from a mobile device, whether this is by SMS, through an application, browser-based or via contactless (NFC).Contactless payments might grab a lot of headlines, but in reality this is just a small part of mobile payments technology. My main objection to contactless being described as mobile payments is that it technically isn’t “mobile”, since the customer still has to be physically present to make a transaction.Furthermore, contactless transactions are limited to small amounts and customers may still have to queue before getting to the point of sale. As such the technology has failed to capitalise on the customer’s impulsive nature and restricted the value of the purchase - school boy errors in any marketer’s handbook.
In a recent U.S. Federal Reserve Board consumer survey, 42% highlighted that security was the main reason they didn’t use mobile payments. However, industry standards such as PCI compliance in card payments already help address concerns of cardholders, so why do mobile payments have to be different?Consumers will always choose the safe option, so applying best practice standards like these to the mobile world will serve to inspire faith in the technology. The aim is for consumers to trust mobile payments as much as any other payment methods they currently use.On the other hand, too many mobile payment offerings at once only serve to confuse: the consumer now has to log into a mobile app to buy their coffee, use another app like Pingit to transfer money, use NFC to pay for their lunch and then go into their mobile browser to order bigger items like TVs online.
Another point is that mobile payments need to be open and accessible to all consumers in order to encourage adoption, not restricted to those with a certain mobile handset or bank account.Mobile payments need to be simplistic and universal. Having multiple options for different items and services simply isn’t the answer. With one intuitive and easy to use process, consumers will be more likely to gain a positive enough experience to keep using the service in future.If the above is achieved successfully, the future of m-commerce is set to be an exciting time for both marketers and consumers.Even now, as eBay demonstrated, mobile payments can turn any location into a pop-up store and can let consumers make purchases within minutes.
Thanks to the sheer size of the audience alone, it's clear that f-commerce has potential for retailers, but some brands are now deciding that the returns aren't worth the effort. So, does this mean f-commerce won't work for retailers or are they simply not trying hard enough?
While some retailers are clearly unhappy about the returns from their f-commerce stores, Facebook can work well for retailers, even if the transactions are taking place away from the site. It can be an important driver of traffic for brands. For example, in September 2010, 1.9% of traffic to Burberry’s website in September 2010 came from Facebook. One year on, this figure rose to 29.1%. Stats from last year found that social media accounts for 3% of traffic to e-commerce sites but many brands, such as ASOS, are doing much better than that. So, even if all the transactions aren't taking place on the site, the brand exposure and publicity value (Burberry's perfume launch being a great example of this) are driving traffic to e-commerce sites. It is in Facebook's interests for f-commerce to work, so can it do more to help retailers optimise the experience for users? Perhaps it could help retailers to make the most of user data to create a more personalised e-commerce experience on the site. If Facebook can increase the opportunities for monetisation on the site and lower the barriers to entry for both consumers and retailers, then take up will increase. While there are clearly issues with usability and generally convincing customers to buy via Facebook, there is clearly a lot more that retailers (and Facebook) can do to make f-commerce work.

Payments now and in the future Presentation Transcript

Payments now and in the future Ben Staveley, Head of eCommerce John Marshall, Sales Executive dotAgency & Realex Payments Wednesday 27th June 2012Payments now and in the futureBen Staveley, Head of eCommerce
Payments now and in the futureBen Staveley, Head of eCommerce
dotDigital Over 4,500 clients and agencies Over 180 staff and growing PLC trading on the AIM market Established over 12 years, profitable since inceptionPayments now and in the futureBen Staveley, Head of eCommerce
dotAgency ClientsPayments now and in the futureBen Staveley, Head of eCommerce
Realex 5,500 customers 110 employees 3 offices globally 25+ financial institutes globally 6 company values 1 Leading payment gatewayPayments now and in the futureBen Staveley, Head of eCommerce
Realex ClientsPayments now and in the futureBen Staveley, Head of eCommerce
Payment Processing Now $161.5 Billion spent online in 2011 1,013,000,000 credit/debit cards in circulation 875,000,000 consumers shopped online in 2010 836 million card payments made in 2011 56/44 split in favour of debit versus creditPayments now and in the futureBen Staveley, Head of eCommerce
Payments now 89% Of online orders 45% 75% Paypal AP market share Of the population made with credit cards made online paymentsPayments now and in the futureBen Staveley, Head of eCommerce
Payments now Of online orders made with credit cardsPayments now and in the futureBen Staveley, Head of eCommerce
The Future of PaymentsPayments now and in the futureBen Staveley, Head of eCommerce
RegulatedPayments now and in the futureBen Staveley, Head of eCommerce
DigitalPayments now and in the futureBen Staveley, Head of eCommerce
MobilePayments now and in the futureBen Staveley, Head of eCommerce
MobilePayments now and in the futureBen Staveley, Head of eCommerce
Mobile 30000 25000 20000 Blackberry Android 15000 iPad iPhone 10000 iPod Touch 5000 0 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11Payments now and in the futureBen Staveley, Head of eCommerce
SocialPayments now and in the futureBen Staveley, Head of eCommerce
F-Commerce 1 in every 11 humans are on FacebookPayments now and in the futureBen Staveley, Head of eCommerce
Payments now and in the futureBen Staveley, Head of eCommerce
Almost(!) freePayments now and in the futureBen Staveley, Head of eCommerce
Payments now and in the futureBen Staveley, Head of eCommerce
Q&A /dotagencyweb /realexpayments @dotagencyweb @realex_uk e ben.staveley@dotagency.co.uk e john.marshall@realexpayments.co.ukPayments now and in the futureBen Staveley, Head of eCommerce

Payments now and in the future

by dotMailer on Jun 27, 2012

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Payments now and in the future Presentation Transcript