As co-founder and CEO of financial technology firm Conferma, Simon Barker has been in the thick of corporate travel’s virtual payment movement. The benefits of single-use virtual credit card accounts are well known: improved security, better management controls, easier reconciliation and a more convenient experience for travelers without their own corporate cards. Barker points out the payment option quickly is replacing plastic on the consumer side. He contends that it will do the same for corporations if they’re courageous enough to try something different.
In my early 20s I loved gamebooks. These are now called video games, by the way. What I loved about these books was their interactivity. You could make your own decisions, follow your own path, create your own characters and problem-solve along the way to reach the next chapter. Sometimes you would sail through to the next chapter and sometimes you would walk into a trap. The thrill came from knowing that the options were yours and that sometimes taking a chance or making a change was beneficial. Education came from the knowledge that if you came unstuck, next time you would know what to do. I’m not saying that has been my life in business, but you can certainly draw parallels from it.
My day job is running a payment technology company. It allows me to follow my passion for problem solving and innovation. However, I also own a pub in my hometown of Manchester (long story) and that gives me an insight into people. What I’ve learnt most of all is that people can be interesting characters, creatures of habit at times, but understanding them is all about listening.
When it comes time to get the next round in at the pub, I’m curious to witness people’s payment preferences.
Just like the gamebooks, life tends to present lots of options and your decisions can take you in all kinds of directions. There is no right way. Sometimes people follow the trends, their instincts, a certain brand or just other people.
Perhaps unsurprisingly, getting a round in presents little in the way of cash. Cash seems to have almost disappeared. Instead it’s contactless — a touch of a card and the job is done. Alternatively, with phone in hand, thumb tap and instant payment sorted.
I wondered, then, whether the common dominator in payment is actually brand relationship-based or technology-based?
The powerful advocacy Apple has achieved with the iPhone is a testament to an unbreakable relationship-based bond. There are actually faster and technically better phones on the market, but you won’t see loyal fans straying from the Apple brand. So was it ever a question that Apply Pay wouldn’t take off?
Today 34 percent of online payments are made on mobiles, and there’s no doubt that the likes of Apple helped to get that figure to where it is.
We can look at newer brands over the last decade, such as Uber and Airbnb. In the first instance, the technology and the convenience it brought actually helped to elevate the brands, as opposed to its trusted relationship base. By creating invisible payment integration, consumers embraced the speed, ease and experience they gained from the service.
Perhaps the question therefore is whether technology generates a stronger and more emotive consumer reaction.
It is certainly true that consumers are embracing technology far more. Take voice recognition. Two years ago who would have thought that we’d be ordering takeaways, operating our lights or shouting music selection demands at Google Home and Amazon Echo devices? There are now 14.1 million Amazon Echo users, 11 million Google Home users and 4.7 million people using both.
According to a 2016 study, Echo owners increased spending on Amazon by 10 percent after buying the device, a significant uplift. So, it’s not difficult to understand why suppliers are spending so much time enabling virtual payments. If it means a 10 percent increase in sales, then why on earth wouldn’t you? It’s also easy for consumers. There’s no need to dig out your card and type in the details; the payment is already embedded so it’s seamless and it’s fast.
It’s an effortless payment method in which you don’t have to think about the price. That’s fine if you are spending your own money, but when it comes to someone else’s budget, maybe not so much. Ultra-convenient payments come with added risks, including opportunities to misspend and hack stored cards. Remember the gigantic Uber breach reported late last year?
The technology and innovations absolutely need to resonate deep with the consumer to succeed, but to work on a corporate level it must equally work for the employer, without losing control.
The mobile and invisible experience is becoming more secure. It is presenting users with detailed data trails of their individual spend and providing complete solutions for both consumers and corporates.
This is available for all types of business expenditure. In travel, for example, virtual payments simplify the experience for travelers while giving travel managers more visibility and tighter controls. So, if a business traveler chooses to dine at my pub and wants to pay on their mobile, their employer will have generated a virtual card in advance to cover the evening meal — secure and transparent for the employer and hassle-free for the traveler.
So, when all is said and done, are we embracing the fast-paced and moving goals of technology?
For me, a technology that offers a personal, automated experience is a winner. The fact is that highly respected global brands are now experimenting with technology and bringing about change, so this tells me we should take it seriously and move with it.
In payment terms, plastic cards will evolve as smartphones, tablets and computers in time. The shift has certainly already begun. However, people are skeptical about consumer adoptions and perceived concerns over security so I think we can still expect that there will be a transition and educational period as these new forms of payments take hold.
Just as gamebooks are a thing of the past, I am certain plastics will soon also be no longer, replaced with technological advances and virtual payments. The thrill of the game remains if companies are prepared to step out of their comfort zones, be bold and be fearless. The ideas that emerge may just make all the difference, exciting consumers and benefitting businesses along the way.
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