We have seen the great uptick in new methods of payment initiation by the customer. Examples of these are:
-QR Codes
-Request to Pay
-Pay by mobile phone and other devices using Google or Apple Pay
-Buy now Pay Later or Installment Pay.
-EMT or email money transfer
All these new services are can be grouped as Alternative Payment Methods (APMs). These services are possible by layering an Alias Directory on top of the payer, payer's bank, the network, the payee's bank and the payee. Overlay services delivered via the alias directory improve customer experience at all touch points like POS, online commerce etc. . Where the network is a real time rail, account to account settlement is possible much like a peer to peer network thus reducing interchange costs and delays associated with traditional market infrastructure.
Where are the banks in all this? Nowhere!
All of these services have been delivered baring EMTs by non bank actors or fintechs. Why?
These newer players did not have legacy costs recovery to worry about nor to fight "we have always done it this way at our bank" mindset. They also took the customer for granted.
Now these trends are hitting the banks at the core where they have no place to hide: the large corporates demanding these services and if they don't provide these corporate accounts will shop around.
The customer payment initiation battle is lost, so what can the banks do ?
0 comments:
Post a Comment