Mobile banking the future

There is no doubt that advances in digital and mobile technologies have had an enormous impact on banking, and while the South African banking sector is innovative, it could be much more so, says Paul Opie, Gemalto’s field marketing manager for the banking & payment services in Africa, who has been in the card and payment industry for 13 years.

“South African banks’ digital offerings and services are advanced compared to the rest of the world and often the South African consumer takes for granted these for granted, not realising that these services are not available in the rest of the world. However, I still think our banks are capable of more and only then will they be world leaders.”

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An innovation that has been around for many years but is only now starting to infiltrate the market is contactless cards and payments. “The market is still taking off on contactless cards, but while they are being issued to merchants and consumers, there has not been a lot of advertising or communication around them.

Opie explains that contactless cards are cards that only have to be tapped on the Point of Sales (POS) and not inserted into the POS, with the consumer then entering a pin number. While consumers are unaware of the contactless cards, merchants are also unsure of how to use them. “A contactless card promotion was run by Woolies at Engen garages during last year’s World Cup, but consumers and merchants did not understand how the product works.”

Despite the lack of understanding of consumers and merchants, the acquiring network or POS for contactless cards are increasing. “I would expect that within a year we would not be having this conversation as contactless cards will be part of our lives.”

But it is all about mobile and over the next few years the growth is in mobile will only increase. Already technology such as Apple Payments or Samsung Payments has attracted increasing interest globally he says. “This technology allows you to load your credit card details securely into your phone. “You then use your phone in the same way as you would use a contactless card by tapping and paying. You would just be using your phone not your card,” he explains.

This has meant banks are having to rethink how they can best remain relevant in the bank. “Banks are cards and payments and while consumers are still loading the bank’s credit cards into their mobile, they perceive the payment being done by their mobile, for example, Apple or Samsung. This payment method also leaves banks with no data on consumers, so information such as location and spending patterns goes to the mobile, and it is the data analytics that are valuable not the payment.

But banks are pushing digital transactions. “Banks need to be where their consumers are and then is on digital platforms and they know that. The trick for them to keep the digital common across the platforms.”

Branches he says are expensive and the majority of consumers just do not want to go to a bank branch anymore. “However digital banking has to be secure. If it is then the customer is happy to use it. So it is a balancing act between happy customers and a secure channel.”

He says the younger generation definitely prefers instant banking instant. “But it’s more than that; they are just not as emotionally attached to banks as previous generations were. This means they easily switch. For banks it means they need to work very hard to attract and keep up with this customer.