Brave banks. This is what is fundamentally behind the success of getting more than 65 per cent of all Scandinavians to use mobile payments on a regular basis. These banks are forward thinking and willing to alter their business models to meet the imminent threats to their business.
It’s all happening very soon: AliPay is coming to Europe and PSD2 will crack open bank accounts for Apple, Facebook and others. Being a retail bank isn’t as easy as it once was. But what can you do, as a retail bank right now, to ensure your success?
“Launch a mobile wallet,” is what all the analysts say. But then, “we’re not even sure we need this,” said consumers in this survey from AmEx.
So, with wallets failing to cut the mustard and consumers sitting on the fence, how has the Scandinavian market seen more than 65 per cent mobile wallet adoption – a percentage which continues to grow?
If we look at the Scandinavian market (Denmark, Sweden and Norway), we find three different stories that all share the same basic result. Over two posts, I am going to share some of my thoughts.
Winning the market “the Scandinavian way”
In Denmark, one retail bank decided to address the market first. Danske Bank introduced a mobile payment app (MobilePay) and made it separate from their traditional mobile bank app. They enabled the new app to address the whole market, including customers from other banks. This would become the app that today, nearly everyone in Denmark has downloaded.
The MobilePay app enables you to charge your card when you send money to mobile numbers. The recipient is invited to join the free to use service, asked to enter a bank account number to where money will be forwarded and then asked to add their own card to complete the loop.
In this way the system addressed the market of private transactions, replacing the need for cash, for free. Yes, the bank is losing money on card processing fees, but we will cover that “problem” later.
In Sweden the mobile payments scheme launched was a collaboration between several banks, and in Norway two banks are now battling it out to win the market. Even though the market conditions are different in the three countries the second half of the story is mutual.
Key learnings introducing mobile payments to a market:
Besides the marketing element, this launch strategy might seem identical to several other Mobile Wallet services, such as Pingit by Barclays. But there are differences. The main one being that the next new feature of Pingit was introduced more than one year after its launch, so the great success of 120,000 users in five days quickly became no news. People get bored, fast which means even faster innovation is crucial.