I’ve been thinking a lot recently about the future for card payments. In particular, I have been reading about the growth of WeChat in China. WeChat combines the functionality of apps well known in Europe and America, such as WhatsApp, Twitter, and payment services such as Apple Pay. WeChat has an integrated wallet service and has surpassed half a billion users in China.
What does this mean for traditional card payments? In theory, everything on a plastic payment card can easily be stored (more securely) on your phone so why carry a wallet of plastic around anyway? That’s what half a billion Chinese customers already believe, but the growth of WeChat is not guaranteed. Tencent, the company that produces WeChat, has struggled to roll out the wallet functionality outside of their home market. Even in Hong Kong, people will use the app to chat to friends, but still reach for their cards to make payments.
How we pay for products remains largely cultural, but we have seen this change in many markets where cash has declined in favour of cards. If electronic services offer better payment terms and options then cards perhaps the cultural resistance may be overcome in time?
Alice Milligan, the Chief Customer Experience Officer of Citi Cards believes there is still a lot that can be done to make card use more attractive. In this interview with CMO.com, she outlines how communication and information from card issuers can be dramatically improved:
“For example, we saw that customers were earning rewards but were not as engaged with enjoying them as they could be. We added information on their account dashboard so they can easily view their rewards balance. If the account was recently opened with an introductory offer for 50,000 points after $3,000 in spend during the first three months, they can see how their monthly spend is adding up.”
Summarising some of the other points made by Alice, it seems that card providers are focusing on improving the customer experience in several ways:
- Improving the customer service interface and making it easier to get help across multiple channels
- Being more proactive – as in the earlier example. Helping customers to get more from their relationship with the card and loyalty programme.
- Using analytics and data to better understand what customers want and how they behave.
Looking over at Asia there has been a dramatic shift in how payments are made and a similar adoption of app-based payments could dramatically affect American and European card issuers. The answer in the short and medium term is to enhance cultural resistance to change by ensuring that the customer experience with their cards is so good, customers don’t want to explore innovative new options. This may not work for ever, but the card issuers can buy enough time to plan how they fit into the future of payments.
What do you think is the future of cards? Let me know your thoughts by leaving a comment here, or get in touch on LinkedIn.