Ginger Schmeltzer is senior vice president of emerging payments at Fiserv, a new position at the company that she began in August 2012. Previously, she was senior vice president of digital channel management at SunTrust Bank and before that, an engagement manager at global financial services and payments consultancy Edgar, Dunn & Co.
In the following interview, edited for length and clarity, Schmeltzer spoke with PaymentsSource about the strategies that banks are employing by enabling the convergence of the physical, online and mobile channels.
PaymentsSource: What are the biggest pain points that banks encounter as they try to meet new expectations from consumers?
Schmeltzer: The world of payments is changing because our world and how we interact in general is changing. We’re being trained by Amazon, Google and other online and mobile interfaces to expect that they know who we are, what we’ve bought before and what our preferences and interests are. What consumers are starting to get so comfortable with this that they’re frustrated when they run into something like a bank, which is typically still antiquated, or at least not as able to track them as closely.
PaymentsSource: Can you give some examples of ways that you’ve seen banks not meeting these expectations?
Schmeltzer: A frustration point for consumers who have their checking and mortgage accounts at the same bank is being required to use bill pay or write a check to make a loan payment. To consumers, it’s all the same company and they want the ability to do an internal transfer between their accounts, but it ends up being a complicated process.
Another example is not being able to set up bill pay on a mobile device. Consumers don’t understand why they can’t just do it on whatever channel they chose. And when they’ve been doing something online and run into a problem and call the call center, consumers don’t understand why they have to start all over from the beginning and explain the whole thing over the phone.
There’s historically been a lot of disconnect between the different channels and business units in a bank because the systems were all built separately, creating silos within the bank. While legacy siloing and separation of databases and technology has left banks where they are, Amazon or PayPal or somebody newer is starting more from scratch. And that makes the bank experience not as seamless as the consumer would expect, based on what they’re getting in other parts of their lives.
PaymentsSource: Are there ways that banks and merchants can learn from each other in terms of providing a better payments infrastructure?
Schmeltzer: That’s the million-dollar question around mobile payments, right? How do we match up the two ends of the value chain and make them work better together? It’s in everyone’s best interest to find a workable solution.
I have been following the [Merchant Customer Exchange] initiative very closely and I think it’s great. Having been in this space for a long time and gone to a lot of conferences and meetings, merchants have not typically been in the room. It’s been a lot of banks, the associations and the vendors and everyone else, but the merchants haven’t been at the table as much. It’s great that they now have a seat at the table in these discussions.
PaymentsSource: Who’s going to win the mobile wallet war? When you look at the mobile landscape, who is the best entity to address consumers? Is it the banks, through card networks like Visa and MasterCard; the Merchant Customer Exchange; the wireless carriers’ Isis wallet; or the other new players that are more focused on data extraction than transaction revenue?
Schmeltzer: I think there are going to be a lot of players in it for a long time. There will be consumers who will prefer to use their financial institutions’ wallets. They’ll like it, trust it and believe that the data is safe. Others will think the Google or PayPal experience is better or more convenient.
For quite some time to come, you’re going to see a lot of mixing of ways to pay at the point of sale and technologies that are available and not broad acceptance of all of them. It won’t be ubiquitous. Do consumers trust Visa and MasterCard? Absolutely, and they have for a long time and that’s unlikely to go away. But I don’t think that means a Google, PayPal, LevelUp or a Lemon mobile wallet could not get some real traction.
The one thing that’s clear with all of the mobile wallets I’ve seen so far, whether offered by a third party or by a financial institution, is that they’re open wallets and you can put any card in it that you want or any payment device that you want. There’s a very clear understanding and acceptance broadly across the industry that consumers have a wide range of payment products and they want to be able to access them at any time.
PaymentsSource: Do you think there’s a chance that mobile wallets will fail?
Schmeltzer: No, I don’t. I wouldn’t be in this space if I thought that. But I do think that the ultimate form and functionality of mobile wallets is still to be determined. The major thing holding up mobile wallets to date has been that there’s just not been enough of an experience shift to make consumers want to use it. Payments as I make them today work fine. I can use a card or check or cash and I don’t need to use my phone. There’s not enough of a benefit and by the way, I still have to carry my card and my wallet if I want to use my phone.
It’s not that it won’t pick up, but rather, a matter of what the specific tipping point will be. What changes the game so much that consumers, merchants and banks all say “I’ve got to have this?” And no one has really come up with that really compelling experience yet. I think it’s going to happen, it’s just a matter of time and the right combination of features and functionality to change that experience.
To see more of our Q&A with Ginger Schmeltzer, visit our sister site Bank Technology News.