Plastic Works, So What Now?
SAN DIEGO — Plastic, well, it is fantastic. At least in payments. Which means cellphone wallets will need to dazzle consumers with more than payment functionality in order to inspire them to shift their payment habits.
At least that was of the main takeaways from the Emerging Payments conference held here this week.
Plastic “isn’t broken and works pretty well in the physical world,” said Mario Shiliashki, senior vice president and group head of US Emerging Payments Lead at MasterCard, during a presentation.
But that’s true only in payments. “Mag stripe isn’t the end all be all,” Shiliashki said, pointing out how the payment form fails to tackle loyalty needs, as well as fails to deliver “great experiences” with receipts. Because of these deficiencies, “there’s a need for evolution,” he said. “[We’ve] been talking about it for eight years, but it’s finally there because [digital wallets] go beyond the payment.”
Intuitive, simple and useful are the core criteria for the success of any aspiring mobile financial services venture, added Shiliashki. “It’s more than just payments to satisfy these few things. It’s the delivery of smart data.”
Not every consumers wants a coupon on hair removal, he pointed out.
“For us, it is through partnerships that we are hoping to garner more data,” he said. “In order to make customer and retailer relationships better, they must be based on data.” And ultimately, “the more value we drive in the ecosystem through the intelligence device is how quickly we get away from cash and checks.”
To us, this acknowledgement from MasterCard marks a great shift in the stance of payments providers. Historically, payments providers were focused on facilitating the payment. The whole basis of the founding in 1982 of credit card provider MBNA Corp. by Charles Cawley, for example, was based on the simple idea that people would rather not carry cash to the grocery store. Credit cards made physical transactions better. But now the physical transaction is not enough since credit card transactions have been commoditized. Rather, credit card transactions will need to incorporate and leverage the data that they generate — and to the consumer’s benefit, not just the card issuer’s. A revolutionary transformation, indeed.
