Banks should use mobile to avoid costly contactless upgrades
Contactless payments to will trend upward in the next year, mainly because of the rise in mobile payments, which can help reduce expense for banks.
Smartphone owners are warming to mobile payments, with half of them using the method in the last year. A Mercator study also found 70 percent of U.S. consumers would use mobile payments more often if they automatically received rewards or discounts, whether for every purchase or accrued over time.
This is a huge opportunity for financial institutions that would otherwise need to invest in making their cards contactless. With POS terminals able to handle contactless requests from NFC-capable smartphones, instead of investing in contactless cards, financial institutions should focus on moving their offerings to mobile and into apps that can do more than simple money management.
It’s along these lines that in 2019, we’ll see many traditional banks leapfrog using mobile technology. Card issuers cannot afford to leave changing customer payment preferences unaddressed — banks face a choice between introducing touch-and-go or being seen as completely out of touch.
All players across the payments industry face pressure to innovate and make the payments experience faster, easier and more rewarding. Overcoming the limitations of their legacy systems is a major stumbling block for banks trying to catch up with the digitization that is causing disruption across the payments and banking industry.
In 2019, investments in digital technologies can really pay off, and for most organizations across payments and banking, mobile apps will be the first port of call. As the competition heats up, keep an eye on how financial organizations start integrating their own loyalty features into their digital platforms, as this will help them strengthen customer relationships in 2019.