Barclaycard US, a unit of Barclays PLC, has multiple projects developing in mobile payments. In addition to its Barclays-branded bPay mobile wallet, Barclaycard is involved in some capacity in the Google Wallet and Isis initiatives.
Each of these programs takes a different approach to mobile payments. The bPay app is largely software-based, whereas Isis, which counts Barclaycard as its very first participating issuer, is built to work primarily with phones that have Near Field Communication chips.
Stewart Holmes, head of mobile strategy for Barclaycard US, says it's not worth it to sweat the specifics of each payments technology — especially if those concerns substitute for a tangible discussion about user experience. In a recent interview, Holmes discussed NFC, QR codes, new pilots, and the advantages he says banks have when it comes to managing consumer data. This interview had been edited for length and clarity.
PaymentsSource: What's the philosophy that Barclaycard uses to forge its payments strategy?
Holmes: We want to make sure our customers can use our credit cards where they want to, and participate in the nascent new tech that is coming….we are participating in Google Wallet for example, making it easier for cardholders to sign up, and to go through existing online and mobile service channels. We're also monitoring the Isis pilots.
PaymentsSource: What new technology are you testing right now?
Holmes: We're piloting bPay in Wilmington (Del). bPay uses the smartphone's embedded camera to execute payments [by scanning a QR code at the point of sale]. We're looking at how this improves the consumer and merchant experience, and how it opens up new opportunities for our marketing platform.
PaymentSource: What do you think will make bPay's experience superior for consumers?
Holmes: bPay is an open mobile wallet, so there are no restrictions on Barclaycard customers. You can load a credit or debit card and make a purchase at about 40 local merchants that are participating in the pilot, and there's also no hardware [to install].
PaymentsSource: Why does openness matter for the adoption of mobile payments?
Holmes: The power of mobile is in how it connects people with each other and with merchants. With permission-based sharing, merchants can get a view of a consumer's preferences by location, purchase records, and other information about how people are engaging the merchant. For a small- to medium-sized business, so much of the money that they spend on marketing is not attributable. If it's a coupon or a punch card, it's hard to know how effective the program has been. With mobile, if you use care and skill you can avoid the 'spamming' effect of constantly sending people meaningless offers. You can tailor marketing offers around the payments that people are making, and that allows consumers to better see the value.
PaymentsSource: How are you applying that to bPay?
Holmes: We are working to deploy weekly offers or put coupons into the mobile wallet, so our users see there are different ways to get savings at local merchants in the Wilmington and Newark areas in Delaware … we want to drive a meaningful contribution toward a consumer spending at merchants. We've had some successes at this in the modest early testing.
PaymentsSource: What do you think will make the mobile wallet successful?
Holmes: We have some beliefs that we are testing in the pilot, that are around our ability to use data, protect data and ensure that data is only used in the way the consumers and merchants are comfortable with. Some of the other participants in the wallet space are looking to steer data for other purposes…there's something about the association with a bank that consumers are looking for, if they are trying some of these mobile products for the first time.
PaymentsSource: Do you think banks are better shepherds of consumer payments data than other companies?
Holmes: I'm not sure I'd get into comparing and contrasting, but we can manage data and do it very well. If you take the long view of banks in the world, it's to help buyers and sellers come together safely and interact with each other…with the pilots we are seeing how this will unfold in terms of consumer comfort and adoption. And that will be different in different markets. What we find in the U.K. may be different than in Africa or the U.S. in terms of how people use mobile payments and what kinds of marketing and products consumers are comfortable with.
PaymentsSource: Is there a mobile payments product that you have found to work across regions?
Holmes: It's too early to say what the breakthrough is going to be. The African experience has been interesting in that circumstances have placed Africa in some ways years ahead of more developed markets in terms of mobile commerce. As people start to experience life though digital means, we can learn a lot about how consumers interact with their smartphones, and how quickly the right consumer product can take off.
PaymentsSource: The Delaware pilots are very QR-code heavy. Are you frustrated with the pace of NFC availability for most phones?
Holmes: It's tempting to rail against technology, but we are pretty agnostic to technology. We have NFC solutions in development in different parts of the world. In the U.S., we have found there is an opportunity to deploy QR technology solve problems. If you confuse technology as being the thing that solves the problem rather than focusing on improving the experience, that's potentially a mistake. I think the technology will evolve as the markets evolve and we will keep our eye on that…and an eye on what problems consumers and merchants are having and what tech will best solve those problems.