Payments Leader

Mobile Apps Give Instant Gratification in an On-Demand World: Part 1

September 26, 2017

Kris Carrera, Business Line Executive, Credit

The new, on-demand economy in the United States relies on a broad and highly engaged base of consumers attracted by mobile app technology, seamless payment transactions, customer convenience, and immediacy. It is this immediacy and convenience that is driving the needs of many U.S. consumers in the age of mobile apps. On-demand services are now a routine part of everyday life – from taxis services and restaurant options to buying products for increasingly quick home delivery.

The result is that the on-demand economy is now one of the fastest growing sectors in the U.S. This is propelled even further by a smartphone-addicted consumer base that has grown accustomed to ordering and getting goods and services when and how they want them.

Dazed and Confused

The on-demand economy is altering the payments ecosystem for a variety of stakeholders, including merchants, acquirers, card networks, issuers, gateways, facilitators, and FinTechs. How do financial institutions get a bigger piece of the action? The first step is to examine your banking app strategy.

Most banks, even regional and community financial institutions, now offer their own smartphone banking apps that enable customers to access current account history, check credit card balances, make transfers, set alerts, and even freeze credit or debit cards in case of theft or loss. Unfortunately, many institutions deliver these basic services through a suite of unconnected, separate apps, which can leave customers confused. Therefore, step one is to consolidate all these services into a single bank app.

There is clearly a demand for mobile payments, but financial institutions are often missing the opportunity to make their payment mechanism a customer’s default– the coveted top of wallet position. Competition to win top of wallet is intense for card issuers and networks alike. Most consumers load two or more credit and debit cards into their digital wallets and choose one as the default. Once chosen, users do not often alter the default card, which means that every payment processed afterward comes from that one card. For that reason, banks need to actively persuade customers to place their bank card as the default, even before the customer downloads a single merchant app. To do that, banks must understand more about what and how retailers are acting so that they can alert customers and win their top of wallet choice.

For the second article of this two-part series, I’ll be discussing how digital wallets are the next big player in an on-demand world and what banks can do to keep up with the pace of change. The idea of keeping a bank’s credit or debit card as top of wallet is going to be crucial in determining which companies begin to dominate the consumers’ transaction-based life on their smartphones.


Kris Carrera

Business Line Executive, Credit

With over 25 years of international payments experience, Kris was responsible for the launch of the first successful cobranded card program. A leader in risk-based pricing and target marketing using predictive data analytics, she specializes in merchant services, credit cards and home equity. Kris has received Best Travel Card, Best Cobranded Card and Best Private-Label Program awards.