On Saturday, I had the privilege of seeing some of the digital industry’s best designers speak at the Vivid Ideas event: “Digital Design Crossroads”.
During the panel discussion, Fjord’s Bronwyn van der Merwe questioned when payments will finally become invisible. Google Labs creative director, Tom Uglow, seemed to scoff at the idea, and unfortunately the panel didn’t get time to explore the topic in more detail. However, it got me thinking: When payment does become invisible, will purchased items become less valued? When we decouple payment from the goods and services we’re acquiring, do we still appreciate those things as much?
Deloitte predicts that by the end of 2015, 5% of all NFC phones will be regularly used for payment. Knowing we’ll have to wait until 2017 in Australia for access to the coveted National Payments Platform (NPP), one of the fastest ways for us Aussies to hit this 5% will be if access to Apple Pay is switched on this year.
Samsung and Westpac have already established a partnership to enable mobile payments via NFC. CommBank has those tacky little PayTag stickers for non-NFC phones like the iPhone 5, and in March, they finally enabled NFC transactions for NFC phones like the Nexus 5.
This is the second time I’ve joined CBA just to access NFC-based payments. I’m apparently even prepared to pay $4/month for the privilege. I bought a Nexus 4 on the promise of NFC, only to find that none of the banks in Australia cared enough to enable it. In fact Google don't feel that their Wallet app, which allows people to use integrated NFC technology for contactless payments, was important enough to release in Australia.
It seems that many Australians are already warm to the idea of mobile payments. But whilst NFC is an intriguing step, it isn’t actually invisible. To be truly invisible, payment will need to be contactless and it will need to leverage artificial intelligence. These algorithms will be even smarter than the current credit card ‘exception flagging’ triggers that alert Visa when someone in Romania buys new stereo equipment on your card.
By removing the transaction from the end of a cab ride, Uber is already resetting our expectations on what invisible payments look like, and it’s only a matter of time before everyone else catches up. Frictionless payments won’t always be the domain of the luxury brands. Woolies could just charge me as I walk out. Petrol stations could use my e-tag, or number plate. And the same goes for my utilities bills and basically everything else - charge me for what I use and discretely notify me when you do. By all means, email me a receipt, and I’ll expect to be able to review my account whenever I want, but to be invisible the payment process needs to not interfere with the service experience.
Something we’ve been discussing at The White Agency is what this landscape looks like for bars, cafes and restaurants. Apps like Clipp allow patrons to set-up a bar tab at participating venues, but they don’t actually make the transaction invisible. In fact, you could argue that with most venues and people already using PayPass/Wave, and the relative infrequency with which a patron even wants a bar tab, things like Clipp are actually just adding friction to the payment process.
And let’s not forget the lack of extensibility to the model: Do consumers really want different payment methods for each different context… At a bar, in a cafe, when shopping for food, or clothes, etc.? Obviously the answer is no.
On the other hand, we’ve got more ubiquitous platforms like Rewardle, that when combined with Beacons, have the potential to allow stores to completely focus on the service experience, and facilitate an ‘Uber-esque’ approach to payment. The transactional challenge for services like Rewardle will come from the established players like Visa and Mastercard, as well as Braintree, Google and Apple. And it is these established brands that can most easily augment payments with loyalty. Whether or not Apple will allow Android users access to ApplePay and vice-versa, is another question, but one that consumers and retailers alike will want answered as soon as possible.
So as we stare into our crystal balls, and progressively embrace these invisible and frictionless service experiences, it will be fascinating to watch for signs of cognitive dissonance and the resultant impacts this might have on a brand. Anyone that’s reviewed an Uber Black receipt a week after taking the trip can probably identify with a sense of “buyer’s remorse”. Whether this has a lasting negative impact is yet to be understood.
By Sam Court
UX director at The White Agency