It’s been more than a year since Michael Abbott, former CEO of the ill-fated mobile wallet venture Softcard, moved on.

Behind him is five years and millions of dollars spent by the major U.S. mobile network operators — and a wealth of experience that can benefit anyone looking to do better mobile payments' next chapter.

Today, Abbott advises banks broadly on digital payments, and to his dismay he sees many companies repeating Softcard's mistakes.

“Payments isn’t broken—it’s the user experience that’s broken,” said Abbott, who’s just completing his first year as Accenture’s digital lead for financial services for North America, where he has a ringside view of banks’ and retailers’ struggles as they try to maintain their dominance while navigating the broad consumer shift to mobile technology.

The same problems that plagued Softcard continue to weigh down third-party mobile wallets including Apple Pay, Android Pay and Samsung Pay—which lack broad use among consumers despite heavy promotion—and the news isn’t much better for the new crop of merchant-centric digital payment apps from the likes of Walmart and Kohl’s.

Combined with the perspective gained while shepherding Softcard through several tumultuous years, from its ambitious formation in 2010 through its quiet flame-out in February of 2016 when Google acquired its assets, Abbott says he’s certain of a truth many observers have known all along: Consumers still have no real reason to make the switch to mobile payments.

“Consumers are looking for convenience and value, but invariably when they go out shopping they have to sort through a bunch of different cards and store loyalty programs and coupons, and current mobile payments approaches haven't solved that,” Abbott said.

Abbott can’t share all the details of the adventures associated with Softcard’s ride (nondisclosure agreements are still in force), but the lessons he learned are still paying dividends.

“There was no ‘dark day’ during the Softcard journey—it turned out to be an incredible experience that gave us a glimpse into what can be done with mobile payments and technology. Mobile payments is still anyone’s game to win,” Abbott said, offering a few tips to banks and other payment providers looking for insights into what may work in 2017 for those working to develop solutions.

  • Rethink card-linked offers. “Most card-linked offers banks are using that are built into the banking platform aren’t the answer. Because the consumer has to link the offer ahead of time, redeeming the offer is decoupled from the consumer shopping experience. You can’t force consumers to make a decision in advance that they’re going to buy a product, because there are too many intervening factors to close the deal. Card-linked offers also connect to merchant platforms, so Procter & Gamble can’t directly deliver 25% off Pampers to a consumer, it has to go through the merchant platform. There needs to be a way to seamlessly deliver product-specific deals through merchants, so the merchant doesn’t have to give up a portion of their sale."
  • Use apps sparingly. “We’re starting to see the fatigue of the app economy, including with payments, where people are overloaded with apps competing for their attention. People want simplicity; they want payments to be invisible, like Uber or what we’re seeing with that Amazon Go pilot.”
  • Unlock secrets from existing data. “There’s a lot of talk about big data and how to use it, but many financial services providers are looking for data to come from somewhere else. They already have it. Your customers’ habits already provide a fantastic picture of their consumer habits. Banks just have to figure out how to use emerging tools that are out there from fintech providers and others. It’s there, but banks need to take control and unlock all this data from their ecosystems to start doing everything from mitigating fraud to reducing credit risk and creating really interesting, dynamic customer experiences.”
  • Make peace with fintech providers. “Five years ago there was more of a sense of fear from fintech, that somehow fintech companies and startups were going to try to take business away from banks, to try to be banks. Over time that’s shifted, and now I think the mood has shifted more toward collaboration, not competition. Banks are realizing fintech companies represent a way to accelerate transformation, to reduce their capital cost in the long run. Fintech innovators also have realized banks are the key to distribution and reducing their cost of entry to the market.”

Fragmentation among providers only appears to be making the landscape more cluttered, with banks that already are participating in Apple Pay and Android Pay now pushing proprietary digital wallets as a way of putting their own brands forward, often relying on Host Card Emulation technology that stores card credentials in the cloud. Most retailers are along for the ride, with no direct role.

“Most of the time the first time retailers know a customer is in their store is after they’ve checked out,” Abbott said.

Ironically, consumers are still willing to embrace mobile payments, Abbott says, pointing to data from a survey Accenture conducted.

“The top reason consumers aren’t flocking to use mobile payments is that the concept doesn’t provide enough value, but nothing they’ve seen so far is worth adopting, which means there is still a breakthrough we need to make," he said, "and it could come from the payments industry or just as easily from a technology company that figures it out.”

In a survey of 4,000 North American adults Accenture conducted in July 2016, 73% said that if they were looking for a reliable mobile payment approach, they would be most likely to trust a traditional card provider; while 63% would trust an “alternative” payment provider (like PayPal) and 62% would trust their existing bank.

Though Softcard failed, it wasn’t necessarily because it wasn't a bank, the survey’s data suggested. The majority, or 59% of consumers, said they would be likely to trust a larger technology company with a solid mobile wallet, and 24% said they would put their faith in a tech startup.

“Softcard demonstrated that the possibilities for mobile payments, because when we began, the industry was focused on building a competing network—this is what [the merchant-led coalition] MCX was trying to do—but we flipped that model and built an open platform that was really pioneering in so many ways,” he said.

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