The future of payments is mobile

As we have been seeing for several years now , cell phones play an important role in the early stages of the purchasing process. the European consumer, increasingly equipped with a smartphone, has the ability to access information easily and immediately.

The cell phone is thus a close ally for consumers during the stages of need discovery and evaluation of alternatives. Cell phones are also used when the consumer is in the store to compare different alternatives offered by competitors. This behavior is now an integral part of European buying behaviors as digital channels are preferred for these early stages of the buying process.

As for the last stage of the buying process, payment, cell phones are certainly not yet the preferred channel for European consumers, but many studies predict that there will be a boom in the coming years.

In most European countries,the mobile spending channel grew more than any other in 2019.

Let's see why cell phones will become the preferred channel for European consumers to shop online.

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Mobile, the means to improve the customer experience

The consumer is increasingly demanding in terms of customer experience. As competition is fierce , it is very easy to turn to another merchant at the first snag encountered. Therefore, the increasing consumer demand for a smooth digital experience puts pressure on merchants to meet these expectations.

Cell phones offer several advantages that enable merchants to meet consumers' needs.

First, because cell phones are now "an extension of the arm" of most European consumers, they become a preferred channel of customer contact . In addition, cell phones offer the ability to shop anywhere, anytime. Therefore, merchants should use them as leverage to grow their business by developing interactions with their customers and offering a better shopping experience through this channel.

On the other hand, using cell phones to make payments allows consumers to have more peace of mind about the security of storing their payment data. In fact, in case of theft and attempted fraudulent use, cell phone payments cannot be made without customer authentication. Thus, access to and use of payment data is more controlled and secure than with a simple credit card.

Finally, the fact that cell phones optimize the shopping experience is also beneficial to merchants, as it improves customer satisfaction through greater convenience and instantaneousness in the act of purchase and/or subscription. As a result, satisfied customers will be more likely to make new purchases and even advertise positively to their acquaintances. Thus, for merchants, thanks to a virtuous circle being set in motion their profit will be increased as a function of these repeat purchases.

Subscribing: it's easier with cell phones

Today, more and more business sectors are developing subscription offerings that appeal to consumers. Indeed, in recent years, we have seen a shift in consumer behavior that values the access model more than the ownership model, as was the case in the past. Quality of service and experience are what attracts consumers today and keeps them loyal.

The challenge for merchants in the subscription economy is to facilitate the subscription process to increase customer acquisition. This step is critical for the merchant and must be as smooth and fast as possible to reduce the risk of churn. Again, cell phones can play a role in improving the subscription process. For example, by substituting the tedious step of entering one's bank details for the use of one's phone number. the customer benefits,thus, from a simplified and quick process.

"We at SlimPay are convinced that in the coming years cell phones will become an essential channel for customer relationships, but also for payments, both single and recurring."

PSD2 a stimulus to the development of mobile payments

Looking at the evolution of European regulations we have further confirmation in saying that cell phones will occupy an important place in the payments world of the future. In fact, PSD2 (Payment Services Directive 2),effective September 14, 2019, introduces a new standard on Strong Customer Authentication(or SCA), which aims to strengthen payment security and protect sensitive consumer payment data. To meet the requirements of PSD2 , merchants will have to implement SCA for online payments (subject to the exemptions provided) to authenticate consumers.

To avoid making the payment or subscription process more complicated, merchants will have to find the best option to handle strong customer authentication. This is where mobile can play a decisive role. This strong authentication performed with a cell phone, allows the three factors required by the SCA to be verified:

• ownership: the cell phone that only the customer possesses
• inherence: something that characterizes only the customer, which can be the customer's fingerprint or face with facial recognition
• knowledge: something that only the user knows

Europe is the continent in the world with the highest smartphone penetration rate with 67.3 percent in 2018. This is a real advantage for merchants who have a market already accustomed to the different areas of smartphone use. They will, therefore, be able to take advantage of this opportunity to introduce new usage possibilities under PSD2.

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Bottom line.

Consumers have the real power to influence a change in the way payments will be made in the future. Having to meet expectations for convenience, speed and security, merchants must adapt to take advantage of this opportunity. By offering a customer experience that fits their expectations and focusing on mobile, they will be able to make a major input, revolutionizing the concept of payment: simpler, smoother, more secure.

In China, the development of mobile payment was born out of a need, but its massive adoption is the result of a frictionless payment experience for users. WeChat Pay and AliPay are the dominant players in China and have changed the rules of the game in terms of payments. In Europe, we cannot yet fully talk about a mobile transition. Will we be next?

Sponsored Article:The authors are independent experts who are not part of the appvizer team. Opinions and views are personal

Sources:

https://www.pwc.de/de/digitale-transformation/pwc-studie-mobile-payment-2019.pdf
https://comarketing-news.fr/le-parcours-dachat-a-lere-de-lomnicanal/
https://www.retailmenot.fr/infographie-e-commerce-m-commerce-en-europe/
https://labo.societenumerique.gouv.fr/wp-content/uploads/2018/12/barometredunumerique2018.pdf
https://www.statista.com/statistics/203722/smartphone-penetration-per-capita-in-western-europe-since-2000/