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Mobile payments creates four-way conversation: Barclaycard exec

August 10, 2011

Dekkers Davidson is head of mobile business at Barclaycard US

The payment process is currently a one-way conversation between the customer and the merchant. Mobile is set to change that, according to a leading expert in mobile payments.

Often, the merchant does not know the customer and therefore cannot anticipate future needs with the contemporary payments system. And the customer cannot communicate back as often as she would like.

“With mobile payments, we’ll create a four-way conversation between the customer, the merchant, the issuer and a partner relevant to the consumer providing rewards,” said Dekkers Davidson, head of mobile business for Barclaycard US, Wilmington, DE.

“The merchant will know the customer better and be able to serve up relevant offers right to the consumer while shopping and buying,” he said.

In this Q&A, Mr. Davidson discusses the handicaps of the current system, how mobile payments will evolve merchant offers and customer buying habits and how the United States compares with other markets.

It seems rather sudden, doesn’t it — this whole interest in mobile banking and payments? Everyone from the card issuers to banks to online advertising giants and wireless carriers have a solution.
The push to mobile payments is gathering momentum.

Though the concept first emerged about 10 years ago, the technology, consumer behavior and merchant readiness have evolved to make mobile payments a reality.

Today, consumers use their phone to shop and find items, compare prices and reviews, receive and redeem coupons from merchants and consumer packaged goods companies.

Tomorrow, they will pay and service their payment account using the smartphone and, very soon, manage the way they interact with merchants in the palm of their hand. The winners here will be the players who design, develop and deliver a great customer experience.

What’s the promise of mobile payments? What’s the benefit to merchants?
Today, there is a one-way conversation between the customer and the merchant when it comes to making a payment.

Often, the merchant doesn’t know the customer and therefore can’t anticipate their future needs. And the consumer can’t communicate back as often they would like to.

With mobile payments, we’ll create a four-way conversation between the customer, the merchant, the issuer and a partner relevant to the consumer providing rewards.

The merchant will know the customer better and be able to serve up relevant offers right to the consumer while shopping and buying.

Very often, media and even those in the industry confuse mobile banking for mobile payments, right?
Mobile banking is about accessing a deposit, savings or investment account.

Mobile payments is about eliminating the need to carry payment cards, reward cards, transit tickets and other items and being able to make payments and service the payment account – right from the mobile phone.

You’ve had a career spanning industries and countries, all the while within eyeing distance of telecommunications and financial services. Where is the United States in terms of adoption of new technology?
About 10 years ago, Apple envisioned a new way for consumers to listen to music and that industry has not been the same since.

Telecommunications underwent a similar transformation as consumer quickly shifted from fixed lines to mobile as their preferred method of voice communication.

The U.S. is on the verge of a similar change in financial services driven by mobile and digital technology.

U.S. issuers, mobile operators and technology providers will leverage learning from other international markets to bring mobile payments to market in a sustainable and customer-focused way.

Early adaptors will be younger generations such as Generation Y and Millennials have grown up with the expectation they can do just about anything with their mobile phone.

What lessons can the U.S. learn from Europe and Africa for mobile payments?
The European consortiums have underscored the importance of ensuring value for the merchant in exchange for the investment in contactless and mobile acceptance.

The Barclaycard mobile payments program with Orange illustrates the importance of demonstrating incremental value for the consumer. The cash back functionality is a big benefit of this offer.

M-Pesa, the mobile-phone money transfer service by Vodafone in Kenya, shows that the service must address a marketplace need – in this case an easy way to transfer money in an under-banked environment.

In Japan, we’re learning about the importance of an integrated ecosystem that benefits all the players.

What will it take to make seamless mobile payments and effective mobile banking a reality?
We’ve got to ensure a simple, secure, personalized and value-added experience for the consumer.

We’ve got to assist the merchant and retailer community as they evolve their ecommerce strategies.

We must remember it’s not about the cool technology, but about the solutions.

A major concern for consumers is the security issues involved with payments, deposits or transfers via mobile phones. How legitimate are they?
Consumers do have such concerns. Security in mobile payments will be an imperative for Barclaycard and all the players.

We believe there are many assets within the mobile phone device that can be leveraged to enhance security.  Merchants tell us that contactless payments enjoy a lower rate of fraud than other forms of payment.

You’re now tasked with establishing Barclays as a leading brand in mobile payments and banking here in the U.S. Given the competition, you clearly have your work cut out. What’s your hundred-day plan?
You’ll see Barclaycard continue its thought leadership in this space.

We are in market with Orange in the U.K. and have offered fantastic mobile banking solutions with Absa in South Africa.

We are very far along in developing a customer experience model for the U.S. market that will provide true value for consumers.

Our current and potential partners see value in leveraging Barclaycard’s experience in bringing mobile payments to market.

Mobile payments, however, is just a starting point. Ultimately we’re about facilitating commerce more effectively – before and after the payment experience.

Mobile is the ultimate gratification tool. What are we training consumers to expect?
Smartphones enable anytime, anywhere communications, information and entertainment. We’re now extending that to the world of financial services and commerce.

Consumers will expect to understand how mobile payments work – right from the start.

It should be simple and intuitive to access service functions and make a payment using your phone at a contactless merchant terminal. There should be no questions about security or liability.

In exchange for this product usage and loyalty, consumers will expect the experience to be personalized and rewarding.

As we’ve seen elsewhere in the mobile ecosystem, it will create entirely new ways of doing things – this is not just about extending the world as we know it to mobile. It will be transformational.

Paint a picture of mobile usage in 2015. It’s not that far away, but it may not be immediately apparent to fence-sitters.
By 2015, the innovators in this space will have their day.

Early movers who got it right will have an advantage over those who waited to see how it played out.

Consumers will expect the availability of contactless terminals.

Merchants will embrace and drive mobile commerce.

With our lessons learned from the 50-plus countries where Barclays operates, we expect to be there with the winners.

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Mickey Alam Khan is editor in chief of Mobile Commerce Daily, Mobile Marketer and Luxury Daily. Reach him at

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