If you have been in the payments business long enough, you have seen trends come and go.
The reputations of the players in our ecosystem have waxed and waned with their successes and failures while attempting innovation.
If youre a payments executive, you need to be an innovation leader in this digital age. You need a sound strategy as you emerge from the days of legacy back ends built for speed and capacity to the era that requires openness and agility. Massive amounts of data and services housed on mainframes need to be delivered in news ways in an era in which mobile apps dominate. But how to you make sure you dont become an also-ran on the digital racecourse?
I suggest you consider these eight important concepts:
What part of my business am I trying to digitize? A digital strategy means taking your business into the world of your customers so that they can receive data and services easily and on any kind of connected device. Mobile devices and apps dominate, but all sorts of devices can be commerce-enabled. In addition, a digital strategy includes a position on data sharing initiatives between enterprises for business intelligence or predictive analytics.
The easy answer to this question is, I want to digitize everything, and in fact, the payments world has always revolved around money movement and the provision of services electronically. The challenge is to decide the priority in which current processes transform to new delivery methods.
How will I make decisions about what goes digital and when? Your customer is king, and you will have to consider their interests first. Sounds easy, right? However, you may feel internal pressure from your colleagues in the technology field to rationalize current systems. Well-intentioned tech executives may tell you that company priorities dictate that legacy stacks of code be updated for long-term efficiency and openness. While this is true, it is also true that the business executives will need to question those internal priorities. It does no good to spend huge amounts of time and money on re-architecture if your clients and partners are leaving you for new digitally savvy disruptors.
What does a value chain for mobile delivery look like? Take an outside look inward. Determine the desired end user experience, then work backward to understand how that experience gets designed and delivered. Is it developed internally or externally? How is that developer supported? Increasingly, the answer seems to be that APIs are needed to open up the back ends to new uses and applications. How will the API be created?
I encourage you, business executive, not to assume these are solely technical decisions. All stakeholders in the business need to provide input into how these APIs are created, what data will be exposed, and most importantly, how it will realize business goals.
What are the specific deliverables at each of the execution phases? The challenging and fun part of digital strategy development is deciding what it means in concrete terms. Do you want a mobile application giving a sole proprietor alerts on disputed transactions? Does that mean you need to deliver the mobile app, or provide a bank partner access to your dispute management system to integrate with their customer management system? Do you want both? Does a single API meet those needs?
An elegantly stated strategy can make you appear to be a thought leader. But that is not why you got into this business, is it? You want to affect real change, and that means being able to articulate at a granular level what your target communities will experience.
What is the impact on my brand? Not all solutions in the digital age will be created by your company, under your brand. For example, your payments API may be used by an mPOS provider to create a restaurant management solution. This solution allows the restaurant owner to manage reservations, tipping and accounting, in addition to accessing your payment gateway. You see the potential for disintermediation from the end user, but that is the complex ecosystem in which you operate. Nevertheless, benefits accrue for your brand. Your company will gain a reputation for innovation with key partners who will deliver merchant relationships.
Am I digitizing existing services, or am I reinventing the way I deliver services? You may have a chance to extend your services into new form factors and innovate. Extending existing services like cardholder balance or payment services is a natural move. Or, you can develop new programs like using geo-location to send consumers targeted content when they enter a store. Think creatively. If the creative juices do not flow, talk to the potential partners who have been knocking at your door, who are serving up things like offers engines, analytics or loyalty programs.
Are my internal resources capable of doing all I need? If the skills you need are outside of your IT departments comfort zone, look for partners. The payments partner ecosystem of today is more complex than ever, but this complexity creates more opportunities to find best in breed solutions. If loyalty programs, mPOS system integration or even API creation are outside of your organizations wheelhouse, then consider buying solutions that will deliver to market quickly.
How will I measure success? You will likely need to set benchmarks for adoption, usage and impact on Net Promoter Scores. You need to measure impact on TPV, improvements in product release cycles, to name just a few. You know what needs to be measured, because your organization has already set your important business metrics. The point is: know what you are going to measure ahead of time and include the instrumentation efforts along with the product release. For example, if you expect an improvement in buyer abandonment rates for web sales, then make sure you can track exactly where abandonment is taking place in the experience.
Mark Waring is a financial services sales expert at Apigee.
