Deloitte also says that consumers need to develop trust in the new payment solutions, and what it calls “winning organisations” will be those that look beyond traditional payments platforms and actually consider simplifying consumers purchases by having the right payments solutions available at the right place and at the right time.
According to Professor Ian Harper, Partner in Deloitte Access Economics, established payments platforms will continue to play an important role in the short to medium term and he says that new clearance and settlement solutions will “largely work within conventional payments systems and regulation.”
Professor Harper stresses that consumers will need to develop trust in new payment solutions and he says that the shift in consumer behaviour will be gradual due to the need for consumers to develop a level of trust with alternative payments methods.
And, according to Peter Williams, Chief Edge Officer of Centre for the Edge Australia, it is all about the changing ways consumers are buying things, which he maintains is primarily driven by the explosion in mobile payments technology and the availability and accessibility of that technology.
“Today’s consumers are more mobile in their transactions and now have a wealth of options available regarding where, when and how they make purchasing decisions. The balance of power has shifted from the traditional retailer to the consumer and the success of online retail trail-blazed this.
“Technology, such as Square, Google Wallet and Paypal Instore gives consumers real-time transactions with immediate payments clearance. These technologies are the leading the way due to speed, comfort and convenience of exchange.”
Williams also says that the buying process is now simpler and cheaper so consumers can transact more efficiently, and that this has been driven by the “successful uptake of the smartphone,” and that consumers are “accessing product and service information from around the world and then securing the best purchasing deals available for them.”
Key findings from the Deloitte report include:
• Technology is the focus of most modern payments solutions
• There is a need to simplify the customers’ purchase by ensuring the right payments solution is available at the right time and in the right place
• Payments need to be instantaneous and broad-reaching; consumers can be transacting in the aisle of a store or at the store’s till
• Ubiquitous internet connectivity and the mass adoption of smartphones will mean the payments industry will shift with potential to leave behind the existing payments providers
• Successful payments solutions may work well in their home country, but may not succeed when moved to a new markets; for example, M-Pesa, a branchless banking service supporting microfinance activities in Africa, delivered a niche and valuable service to its target market but did not succeed outside of Africa due to different infrastructure, regulatory requirements and demand
• Interactions with customers are moving online and into virtual contexts. Transactions may move into virtual spaces using social media services as a platform to exchange value
• Value can be denoted in more than a sovereign currency. Acceptance of complementary currencies which are mandated by the owners of social networks, may build momentum subject always to regulatory approvals
• The buying process could become simpler using non-traditional payments mechanisms such as gift cards or frequent flyer miles, again subject to regulatory oversight and approval
• Retailers need to develop new business processes and risk models to support the practicalities of accepting and managing the new payments platforms and processes.