Voice payments get mainstream resources but niche adoption
The potential for voice payments is massive and drawing significant attention from developers. But limited use suggests it's not ready for prime time.
Most activity is consistent with early adopters in limited use cases, as opposed to broad scale voice payments and shopping. Voice payments skew male and most purchases are made through virtual assistant-enabled apps for tasks such as food ordering or ride share services.
Nonetheless, there are optimists who believe mainstream use will come much sooner. “I think voice is the biggest thing coming next,” said Steve Klebe, who is responsible for business development of Google Pay, during SourceMedia's PayThink conference in Austin.
While Klebe was notably positive about the voice payments opportunity, he shared a dose of reality on the situation “It is very early, but three years from now we will be saying ‘wow that happened fast.’ I think the mobile use cases are as good as the at-home use cases,” Klebe said.
Voice payments can be used for shopping, new customer acquisition, product cross-sell and broad-based purchasing. The potential usage could be substantial as consumers grow comfortable with using virtual assistants from tech companies such as Google and Amazon, as well as those rolled out by banking companies including Bank of America and Capital One.
However, many initial efforts in the “voice” market have focused on safer activities such as checking a balance, paying bills using previously linked accounts or reordering a prior purchase.
When U.S. Bank launched skills for Alexa, Google Home and Siri it enabled all three to provide checking account balances, but not the ability to make purchases. The only payment U.S. Bank allows is the ability to pay a U.S. Bank credit card from a U.S. Bank checking account. Similarly, when Synchrony launched its first Alexa skill this Spring it was for bill payments as opposed to shopping.
“Enrichment FCU rolled out Alexa to their members this year and are the first credit union to do it. We wanted to be the first one in our market to offer it as a solution. It was a PR push. We also want to be able to remove as much friction as possible. [We want] Alexa to manage your account, your mortgage, etc.,” said John Merritt, chief information officer at Enrichment Federal Credit Union.
The home speaker market, where many consumers are interacting with virtual assistants, has exploded in consumer adoption. In just one year it has more than doubled in size, going from 20 million units in June 2017 to 50 million units in June 2018 according to Consumer Intelligence Research Partners (CIRP). The entry of Apple’s HomePod has added fuel to the growth by grabbing a six percent share of the installed base.
Despite the success of many early virtual assistant-enabled skills, there are banking executives who have strong desire to see voice-based shopping powered through the assistants.
“We think about it in terms of getting more cardholders and getting more spend," said Matt Miller, head of product and innovation at Mastercard. "We’ve seen a lot more success on the servicing arm in using conversation. We want to make it more about supporting commerce and not just servicing.”
In terms of enabling the first steps, some executives have already laid the road map to success. “Applying voice to an ACH payment to originate and authenticate is the next step in the voice evolution,” noted Robb Gaynor, chief product officer at Malauzai Software, a unit of Finastra.
Yet caution still prevails among others who are choosing to enable simpler functions in the early stage, which could lead to a slower voice-based payment adoption curve. “Smart car and smart home use cases make a lot of sense for voice payments, especially with bill pay and me- to-me payments,” said Chris Cox, chief digital officer at USAA.