Blending New Technology With Old: Takeaways from the Latest U.S. Consumer Payment Study

Blending New Technology With Old: Takeaways from the Latest U.S. Consumer Payment Study

Blending New Technology With Old: Takeaways from the Latest U.S. Consumer Payment Study

Allen Pettis

Allen Pettis

Allen Pettis is executive vice president and chief customer officer of Issuer Solutions at TSYS, responsible for all global account management and sales.

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One of the best performing commercials debuting during this year's Super Bowl was Amazon’s satirical take on Alexa-powered devices that went laughably wrong, including the connected dog collar offering 'one-bark' pet food ordering. While it may have been absurd, it was funny precisely because it was so realistic.

The fact is, the connected home — and car and digital wallet — are here to stay, despite any minor hiccups. And this interconnectedness, at the heart of the internet of things (IoT), is increasingly influencing how we order and pay for the services and products we buy every day. By most accounts, at least one in four U.S. households now owns a smart speaker device, such as Alexa. And while their use for ordering and paying for products remains relatively low, payment industry experts believe these connected devices — if their penetration continues to grow — just may be one of the next big frontiers in e-commerce.

20% of consumers would use a connected device to pay for goods and services. Younger consumers, aged 25-44, would be more inclined to use a connected device to make a payment.

According to TSYS' 2018 U.S. Consumer Payment Study, while the past year did not usher in any single monumental disruption, it did see the continued growth of mobile technologies and their influence on our daily lives. We've come to rely on smartphones to accomplish a range of activities with ease and speed. Today we can order ahead and pay for our morning coffee, catch a ride across town, pay a parking meter, board an airplane, or make a dinner reservation and then easily split the tab.

It's this experience of ease and speed that has been introduced into our lives by mobile and connected devices that we now expect when we go to pay for something. But for companies focused on the emerging technologies that support fast, seamless payments, there's a catch. It turns out that the youngest customer segments also want the old-fashioned, high-touch personal experience, especially when something goes wrong. You might say, then, that today's sweet spot is at the intersection of new and old, underscoring the importance of omnichannel communications.

Not just innovation, but integration

When it comes to payments, and banking more generally, mobile's impressive influence extends not only to high-profile innovations, such as in-app merchant payments, mobile wallets and person-to-person (P2P) payment technologies like Venmo and Zelle, but also to those technologies integrated into our daily activities. Use of mobile banking apps and the range of activities they now support is soaring as we grow more comfortable checking our balances and keeping an eye out for fraudulent transactions from our mobile devices. This year's study found that two out of three consumers used their bank's mobile app to access their accounts, make transfers or conduct other related activities over the last year.

Consumers Increasingly Use Mobile Banking Apps - 2018 - Top transactions consumers conduct through a bank's mobile app continue to be: 93% view balance, 82% view recent transactions

Despite this trend toward mobile — and perhaps partly because of it — more of us are also looking for the personal touch, especially when we have an issue with our payment card. Our study found that more than 70 percent of us want to call customer service and speak with a representative if we have an issue with our card. Surprisingly, those most likely to walk into a bank branch if they have an issue with their card aren't those who grew up with them as our only option. Today it's the youngest consumers who are more likely to walk into a physical branch or service center.

High-Touch Customer Support - 72% of us want to call customer service and speak with a representative if we have an issue with our payment card. (Source: 2018 TSYS U.S. Consumer Payment Study)

This preference for customized service also extends to marketing and communication. Three out of four of those responding to our study said they are open to offers, and three-quarters of them are interested in those offers from their bank being tailored to their needs and interests. They also want control over how and when they receive them, with the majority preferring monthly offers.

Getting More Personal - 73% of consumers open to receiving offers - most are interested in personalized offers from their bank tailored to their needs and interests. Majority prefer monthly offers.

Consumers want control

News reports continue to detail the latest data breaches, ranging from email accounts to payments and sensitive personal data. A PYMNTS.com article suggests the vast majority of consumers aren't too concerned about breaches since they believe banks and payment networks 'have their backs.'1 Even so, our study revealed consumers continue to be concerned about the security of their accounts and personal information.

When we asked about the possibility of account or personal information being stolen in the future, 88 percent of respondents expressed some level of concern. In the past year, more than 50 percent responded they have taken actions to protect themselves, including changing online passwords for email, online banking and the websites they shop. Many have obtained and reviewed their credit reports. With the growth of e-commerce, it isn't surprising that our study found credit cards continue to be considered the safest online payment type, which we attribute to consumers' desire to protect their deposit accounts from the inconvenience associated with online fraud.

Even with the protections offered by the card issuers and actions taken to protect themselves, our study found people want the power to catch and stop fraudulent transactions. With the ubiquity of mobile, it makes sense the most attractive mobile features allow them to do just that.

Consumers of all ages hold some level of concern with security. More than 50% of consumers have changed their passwords for email, online banking and the websites where they stop.

Experience is king

So what does this all mean for companies looking to remain competitive in the payments space? People like choice. And when it comes to banking and payments, we have more choices than ever. But while mobile technologies and digital tools are critical to delivering the ease and speed demanded by our anytime, anywhere lives, they must complement rather than replace the high-touch traditional channels.

It's this integrated and personalized experience of online ease and offline support that will help companies win and keep customers, especially in those critical moments when they need help. After all, the first time your customer's dog orders $1,000 worth of organic dog food from his Alexa collar, your customer is going to want to explain that to a person.

To read more from TSYS' annual U.S. Consumer Payment Study, click here.

1. Webster, Karen. "Why Consumers Will Shrug Off the Marriott Breach." PYMNTS.com. 3 December 2018. Web. 12 December 2018.

The statements and opinions of the writer do not necessarily reflect those of TSYS.

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Allen Pettis

Allen Pettis is executive vice president and chief customer officer of Issuer Solutions at TSYS, responsible for all global account management and sales. Previously, Allen served as president of North America Issuer Solutions and executive vice president of TSYS and was responsible for all client-facing functions, including account management, client support, risk management operations, output services, managed services and loyalty services.

A 32-year TSYS veteran, Pettis was formerly responsible for major account relationship management, the commercial card division, and all production areas of support, card services and authorizations. He has also held numerous managerial positions, including group executive for relationship management and affiliate operations, senior director, as well as assistant vice president and vice president of Support Services.

Pettis received a Bachelor of Business Administration in Management from Columbus State University and graduated from University of Oklahoma's bank card school. He also serves on the board of directors for junior achievement for Columbus and West Georgia, as well as the United Way of the Chattahoochee Valley.

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