Banks are beginning to realize that mobile payments are better not left to tech giants. Banks can be intermediated and loose the one-on-one brand connection with the consumer. But how can banks win the mobile payments game?
Well, the partnership between Chase and MCX gives us a few good lessons. At first you wouldn’t think that the consortium of retailers created with the specific intent of enabling retailers to “go it alone” would make a good partnership for a bank. But the more you look into it, the more it makes sense for Chase and other banks to leverage their merchant partners.
Here are the lessons we gather from this deal:
- Protect your customer relationships and data
The first lesson is the most obvious. The resistance to the aggregator wallet providers is only increasing. The fear of intermediation, of loosing touch with both consumer and merchant, and concerns about data privacy, are driving corporations to ensure they have their own mobile payment plans.
- Partnering gives you scale to compete – and you don’t necessarily need a “MCX”
Chase and MCX realized that Chase’s millions of account holders and MCX’s merchant locations are more powerful combined than separate. But that doesn’t mean you necessarily need a MCX to succeed. The key is to leverage your merchant partners and combine efforts to deliver the best service, and the best content.
- Content is king, but issuers and merchants need to collaborate
In the world of mobile wallets, the cards, coupons, offers and loyalty, are the content you need to be successful. Merchants give a wallet the most important content: the local content and offers consumers love; plus the acceptance locations that are essential for the wallet’s success.
- Lower fees and increase profits with closed payment products
As part of the deal, Chase is offering merchants what they have always wanted: to pay less for transactions. And Chase pay, being a closed loop network, can deliver that to merchants. And you don’t necessarily need to have the sweetheart deal Chase has with Visa. Private label and prepaid cards can work to provide lower fees for merchants and increased profits for banks.
Enable your own “Pay” solution with a network of partners
Sequent is the only company that enables banks to deploy a full-featured mobile wallet and also “share” their cards with a network of merchants and other partners and become “top of app” in every app.
Using the Sequent APIs, merchants use the “shared” bank cards to turn their apps into powerful mobile wallets, maintaining complete control of consumer shopping experience. The Sequent platform also supports loyalty and offers including patented “single tap” redemption at point of sale systems.
By running their own mobile payments platform banks protect their sensitive customer data while leveraging its valuable insight. Banks also have the opportunity to increase usage of profitable private label and prepaid cards, which are also preferred by merchants for its lower fees.
Sequent gives banks the scale to compete with major wallet providers no matter the size of the bank. Content is king and local content from local merchants is what brings a mobile wallet to life. The key is to leverage your merchant partners in a win-win solution for both parties.
Read our new eBook about how can banks win the mobile payments game and talk to us today about our Token Service Platform (TSP), APIs and HCE mobile payments.