When consumers prepare to pay for purchases these days, a growing number of them are whipping out their phones instead of their wallets. Mobile payment apps have added a new and convenient way for people to pay for goods and services.

Mobile payments are gaining momentum in the UK, with Apple Pay having an initial monopoly and Google recently announcing its UK launch.

The total value of proximity mobile payments is set to see a significant growth of 210% in 2016 and has the power to revolutionise the shopping experience, making payments more convenient and faster. It’s an attractive option for brands and customers alike as it makes the payment journey for the customer much more simple.

As these digital wallets gain market traction, banks and retailers could find themselves in trouble. There are more players entering the space. According to Bloomberg News, Walmart, Starbucks and even Chevron petrol stations are working on plans for their own digital wallets.

But the ‘walled gardens’ of Apple and Samsung Pay make it difficult for brands to implement the systems and add extra costs to the merchants.

  • Usable only on phones they manufacture and within constraints of their systems (walled garden effect)
  • Credit card based systems
  • User data owned by Apple et al
  • No options for customisation
  • Added fees

Beacon payment technology can get around these methods through using a combination of phone-agnostic beacon technology and a phone app. This method allows brands, banks and payment merchants to fight back against the duopoly through a white-labelled solution that is completely customisable.

How? Follow the Nordics

Product B-2Tech-savvy consumers, world-leading smartphone penetration and progressive banks have kept the Nordics ahead of the game with mobile payments. In 2013, Danske Bank launched MobilePay to address the need for very simple money transfers.  The ambition was to make transferring money to friends as easy as sending a text message. The business payment aspect of MobilePay then evolved from this.

Danske Bank’s MobilePay payments are now accepted in shops across Scandinavia, including McDonalds and Starbucks outlets, and all that is required of the customer is a free app that is installed on their iOS, Android or Windows Mobile device. Once purchases are scanned at the checkout and payment is requested, the mobile device is waved over the smart beacon with the app running. In response a customer is immediately shown the purchase amount and the app waits for confirmation through a simple pin and swipe gesture. In seconds a purchase is made without having to enter any amount manually or having to use a payment card.

Mobile payments platforms are providing retailers with an intuitive customer experience via inexpensive technology and removes costly merchant fees as the technology takes transactions direct from bank to retailers, changing the value chain.

The Dankse Bank owned mobile wallet was the third most popular app in Denmark and Norway (after Facebook and Facebook messenger) and over 90 million transactions by 2.8 million individuals were made through MobilePay last year alone.

Directly engaging with customers & creating brand loyalty

By directly engaging their customers, brands and banks can also create additional brand loyalty as well as providing a desirable feature to entice new customers.

The solution does not require technology and equipment that is expensive or difficult to access for retailers and it is intuitive to use and easy to understand for the end users. The payment is so easy and effortless: “They have all been mighty impressed by how easy and fast it is. People get really pleasantly surprised, and sometimes they have to try several times because they have a hard time believing that it really is that easy” says Danish supermarket Rema 1000’s project leader, Steffen Skov Larsen.

This disruptive technology has implications beyond ease of use for the customer and retailer. Because the technology takes transactions direct from bank to retailer, it changes the value chain by removing merchant fees, acquirers and payment service providers from the fee structure and comes with enhanced security so there is less chance of fraud or error.

These changes in the customer journey should be a consideration factored in to future marketing strategies. The way that we shop and purchase goods are changing.

Now the power is in your hands

Beacon technology gives banks and retailers the control to implement their own systems, creating bespoke white-labelled devices to the client’s specification with a custom payment system – outside the expensive walled gardens of Google, Apple and Samsung.

The problem for banks is that millennials who could become their new customers are deciding against conventional banking and choosing instead to bank through the growing number of mobile payment services. If banks want a fighting chance to catch up with third-party mobile wallets, they’ll need a digital payment technology to do it.

David Fernandez

David Fernandez


David Fernandez, founder of Netclearance Netclearance.