Should digital banking and payments be fun… or frictionless?

We’ve been looking at digital wallets and the payments ecosystem lately, trying to determine what matters more to consumers: that paying friends and businesses becomes more enjoyable and engaging, or that it becomes almost unnoticeable.

For standalone payment apps , their brand hinges on being useful. Pay with us, and we’ll reward you with points or give you some digital loyalty ‘vouchers’.

But for the ‘ecosystem’ players like Apple, Amazon, maybe even PayPal, what matters more is becoming part of a network that encourages users to use the payments services they offer – without even really noticing.

Noticeable or behind-the-scenes?

It’s a well-worn example and the business has its own issues to consider, but in terms of keeping the boring act of paying ‘behind the scenes’, Uber excels. It just happens.

Comparably, Starbucks is placing focus on the payment process and rewards that in-app payments will bring. Customers are immersed in a fun and engaging loyalty scheme.

Using relevant incentives could easily sway a regular Starbucks coffee-drinker to choose one app over another. As our Head of Marketing, Kirsty Cooke, argued recently, ‘Why would I use a regular wallet like Apple Pay when my Starbucks payment app gives me free coffee every so often, and helps me skip the queue?’

The argument extends beyond payments. With the technology at their disposal, banks and banking providers should be able to deal with my finances with almost no interaction from me.

Not that simple

But people are different… and these differences can be significant. For some, giving the brand control of a payment requires more trust than the brand actually has with the customer. For others, this is not a concern. These psychographic differences are being used with great effect by, for example, pollsters. From the New Scientist (2 August):

‘Using combinations of people’s interests, demographics and survey data, it’s possible to direct campaigns at individuals based on their acceptance of ideas and policies. This could have a big impact on the success of campaigns.’

Today, the apps provided by most brands do not differentiate between different user types. A rare example is Santander: it developed the SmartBank app targeted at younger people, while others use their Personal Banking mobile app. (Interestingly, neither of these apps can be found on their website.)

One of the interesting aspects of the marketing of services is the degree of control that customers are willing to take. Often users will be prepared to increase the control as their understanding of the service, and the service process, increases. Other user segments will not want to take control, leaving the service agent to do all the work – whether the agent is human or artificial.

Add security into the mix and the segmentation variables or psychographics can be very valuable aids to the design of services and apps that allow the customer to transact how, when and where they want.

For some, fun may not be important. For others, it may be very important. Friction may be key if it demonstrates to customers, for whom security is important, that care is being taken.

Offering choice

It is not a question of choosing either fun or frictionless interactions; the customer experience can be both fun and frictionless. It depends on the emotional needs, both conscious and unconscious, of the customer – and these needs can vary according to the context; for example, by the amount of the transaction, location and time of day.

The solution lies in the ability to allow customers to configure their interactions spontaneously so they can choose the experience on demand. The alternative is that the digital experience designers have to create a single app that meets the needs of every different type of person – which is impossible.

The brands for whom customer experience is an important contributor to maximising customer lifetime value will use data and technology to allow customers to personalise their apps on demand.

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