The Coming Convergence of Alternative Payments and Digital Marketing Strategy

Future Convergence of Alternative Payments and Digital Marketing Strategy : 2011 Edition

During October, I had the distinct pleasure of attending the BAI Retail Delivery Summit 2011 and the 3rd Mobile Contactless Payment Innovations Summit. These shows discussed various aspects of banking and payment convergence with digital mobile devices. The majority of the presenters focused on the technology and near field communications issues. But there were a few speakers who had different perspectives.

Paul Galant, CEO of Global Enterprise Payments for Citigroup (C) opened the payment innovations conference with a keynote entitled “Fostering Globalization of Mobile Payments: Why Are We Note There Yet?” The talk communicated a vision “starting from scratch” to redesign banking. Mr. Galant asserted that this will require changes in not only technology architecture but also in business models that fund and sustain the investment and risk taking. He layered in Peter Drucker and John Wannamaker quotes to make his case about the business issues. Quotes from these individuals often appear in my business keynote speeches, it was refreshing to see someone using similar frameworks about the future of business.

Mr. Galant also asserted a vivid future vision culminating with saying, “The next five years will make the past five years look like we were standing still. A lot more destructive innovation is yet to come.” The issues of educating merchants and consumers will be challenging to achieve the desired behavior changes. The stakes are large, potential increases incremental revenue as paper migrates to digital are in the tens of Billions of dollars for each one percent shift that is made to digital. Dickson Chu, Managing Director & Head of Digital Networks & Mobile Payments, Global Enterprise Payments stated similar themes about business models in his later participation in a panel on loyalty and rewards.

A large panel including Google (GOOG) discussed visions of how the Google Wallet and other competing digital wallet technologies will transpire. It’s still early days in this space and the panel was extremely fragmented.

There were two other panels with speakers from large and small merchants that I found to be fascinating. These merchants expressed concerns about near field communications technology cost, payment fees, increased costs due to fragmentation of payment types and difficulties with pricing strategy in a world of increasing real-time consumer price transparency on mobile devices. Dave Mathews, SVP of Technology and Operations at the National Restaurant Association pointed out that the majority of restaurant providers are still using payment terminal technology developed in the 1900’s and were unlikely to replace it unless they saw clear benefits to doing so.

Other keynotes from Paypal, Vantiv, Isis and Billion Revolution discussed similar topics on the emerging nature of payments. The hallways were buzzing business development activity as there is both considerable activity and reasons to be excited about the future of alternative payments and the coming convergence with digital marketing.

David Dalka is the Emerging Media & Technology Editor for the Wiglaf Journal.