Accenture Banking Blog

Location. Location. Location. This may be real estate’s golden rule, but it applies to payments now more than ever. Tomorrow’s industry leaders will go where their customers are—and their customers are going mobile. So what will winners do differently to unleash the power of mobile payments?

Choice. Convenience. Control. Value.

The magic of mobile payments is not about slapping the functionality of a plastic card onto a phone. It’s not about processing transactions. It’s about delivering choice, convenience, control and value wrapped in a compelling and seamless digital customer experience. Not just at the point-of-sale, but across the entire digital path to purchase. All four legs of this value proposition matter intensely to consumers. Case in point: 37 percent of the North American consumers Accenture surveyed said they were not adopting mobile payments expressly because they did not see the value delivered.1

An evolution of value

Think about the evolution of mobile payments for a moment. By making it possible for consumers to deposit checks remotely back in 2009, remote data capture technology introduced a whole new level of choice, convenience, control and value. Mobile check deposits have since caught on like wildfire. A major software provider reports that its mobile deposit solution has processed more than two billion checks, saving consumers more than 830 million hours.2

There is a value story to tell around mobile wallets too—albeit a different one. Only 13 percent of US smartphone users have used Apple Pay, 7 percent have used Android Pay, and 5 percent have used Samsung Pay.3 Why the lackluster uptake? Several key ingredients were missing: universal acceptance, consistent checkout experience, and additional value beyond payment facilitation. In addition, the value proposition tied to these mobile payments options is more device-based than commerce and experience-based. Consumers just don’t see the incremental value of paying this way and have not changed their behavior.

Yet consumers feel very differently about mobile payments apps from some retailers. Nearly a quarter of Americans with smartphones have used Walmart Pay.4 And Starbucks has had phenomenal success—a poster child for the art-of-the-possible here. Its mobile payments app is the most popular in usage, and industry watchers expect it to remain so until 2022.5 Today, 30 percent of the company’s transactions are mobile payments.6

This success isn’t just because people can’t go without a caffeine fix. Starbucks knew from the beginning that the combination of rewards and the experience—not the transaction—equals value in mobile payments. The app is loaded with convenience features and loyalty program tie-ins that make it a no-brainer for coffee lovers to pay with their phones. Plus, Starbucks can continually improve the experience with the endless consumer data it collects from users.

As the future of mobile retail payments comes barreling toward us, payments industry players can either go mobile or go home.

This is the tip of the iceberg. According to Accenture analysis, 4 percent of all US retail transactions are via mobile phone. In China, it’s 20 percent. Alipay, which is owned by Alibaba, China’s Amazon equivalent, has over 500 million monthly consumers and 100 million daily transactions. I see this as a window into what’s possible in mobile payments here. With US mobile payments outpacing traditional retail sales by 8X, the future is already taking shape.

A look just over the horizon

In North America, the most promising emerging and future mobile payments solutions will combine a focus on the consumer experience with insight-driven innovation. This is playing out in several areas today, which will advance in the coming years.

  • Consumer controls. Major credit card companies are adding features to their mobile apps that give consumers new control over account security if their card is lost as well as payments plan options for qualified purchases.
  • Merchant-funded rewards. Embedded merchant-funded rewards—increasingly common in consumer goods—entice consumers to buy with value-added deals and connect consumers, merchants and providers in new ways.
  • Less rewards, more rewarding. Rewards are too often focused solely on traditional “spend and get” and not enough on the “rewarding” of recognition, experience, exclusivity and more. Digital is opening up new avenues to move beyond points to rewarding loyalty with meaningful, highly-curated experiences.
  • Cross-border payments. Imagine if travelers could know the costs of their trip before they take it, avoiding confusion over foreign exchange rates. A built-in rate calculator could essentially provide a currency lock solution that would give travelers a superior experience.
  • Buy button. Imagine universal acceptance of a single purchase button without asking the consumer to enter his/her 17-digit account number or personal information.

Secrets to getting ahead

As the future of mobile retail payments comes barreling toward us, payments industry players can either go mobile or go home. Or in the words of The Great One, Wayne Gretzky, they can “skate where the puck is going, not where it’s been.” Doing this takes a commitment to three fundamentals.

First, market leadership will demand a relentless focus on the customer experience. Payments players should find new and creative ways to apply the 4Rs—recognize, remember, recommend and reward—to the mobile payments experience. This goes well beyond simply replicating what worked in a desktop or online environment. It means starting from customer sacrifice—day-to-day pain points that could be addressed with better solutions—and working back from there. The best way to do that is with customer experience design methods that center design processes squarely in user needs and feedback loops.

The second fundamental is to find the optimal way to leverage fintech—asking and answering the all-important build-buy-partner question for future development investments. Many companies will find it makes strategic sense to avoid building bespoke solutions. Why reinvent the wheel? As fintech providers proliferate, success will result from the ease of and seamless integration—or fusion—of fintech into the payments companies’ platforms and service offerings. This fusion is critical, and it requires a robust integration layer. Essentially, a business-to-business version of the app store.

Finally, any organization eyeing market leadership in mobile payments must look hard at its technology backbone and development methods. It will be increasingly important to cultivate world-class agile development capabilities to work at the pace of innovation. This is the Silicon Valley way. It is key to how digital disruptors experiment, iterate and release products in a test-learn-tweak model. By decoupling data and applications, companies can free themselves from legacy system bottlenecks and gain the IT agility they need to compete.

In my next blog in this series, I’ll focus on frictionless payments. In the meantime, I invite you to explore more insights from Accenture on customer experience design and digital decoupling.


1 Accenture, 2016 North America Consumer Digital Payments Survey 
2 Mitek, “Mitek’s Mobile Deposit® Processes More Than Two Billion Checks, $1.5 Trillion in Cumulative Check Value” 3/8/2018 
3, “Mobile Wallet Adoption: Where Are We Now?” 
4 Ibid.
5 Larry Dignan, “Why Starbucks Remains the Mobile Payments App Leader Ahead of Apple, Google and Samsung” 5/22/2018
6 Taylor Soper, “Mobile Payments Now Account for 30% of Starbucks Transactions as Company Posts $5.7 Billion in Revenue” 7/27/2017