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Intro & News
Welcome to episode 5 of the Mobile Payments Today podcast. I am your host, Will Hernandez.
I wanted to thank everyone who’s tuned in so far.
The first bit of news, Square and how they’ve released a set of developer tools for building custom in-person checkout experiences. This is important is because it is Square, they have tremendous reach. We’ve already see what Square has done in this area with their SDK. Shake Shack’s self-service kiosks use Square’s SDK.
What Square has pushed in their latest press release is their new hardware for self-order kiosks and mobile points-of-sale. This will live on top of Square’s payment ecosystem. The customized products will allow developers to work with existing Square merchants and popular industries. It will allow new verticals to get involved with Square’s offerings as well. The transportation industry will be a potentially huge user of these options.
One more news item is Chase expanded mobile ATM access across the US. It is now available at 16,000 ATM’s nationwide. I bring this up because the expansion of mobile ATM access; we talked about this in episode 1. It’s been amazing to see how this simple technology has added a big reason to use mobile wallets. And mobile wallets are struggling in the US, but this provides a simple way to use it. It provides convenience to a person’s daily life. This is something mobile wallets and banks need to pay attention to, creating simple tools to improve people’s lives.
Mary Hines Q&A – Citi Managing Director, Customer Engagement and Innovation
Will: Thanks for joining us. Given your position with rewards at Citi, what’s the state of mobile loyalty right now in 2018?
Mary: Mobile creates amazing opportunity to build loyalty with your customers. Because of the engagement people have with their mobile devices. About 60% of consumer’s time is spent digitally via mobile. At Citi that creates this opportunity to drive long term relationships with our customers.
It is unique in how frequent that interaction point is.
Will: What are some of the bigger challenges to meeting the consumer expectations, that seem to change on a daily basis?
Mary: When you look at loyalty programs since their creation, in the late 80’s, they’ve been pretty much the same scheme. You get points for certain things, and you can use those points to redeem. What’s really changed is how consumers redeem their points. Now, 70% of our redemption occurs off our site. They are at our other locations, our mobile app, or in the checkout at our key merchants.
What’s great is you have the personalization, we don’t have to guess what a consumer wants. We just need to know where the consumer goes. The challenge now is developing the relationships with the merchants, to enable the consumer to redeem for what they want. You also have to make sure you’re creating a seamless experience across a wide array of digital channels.
Will: What are some of the right partnerships, to make sure consumers are redeeming those points?
Mary: It really is about the top retailers and travel partners. Some of our strong partnerships are with Amazon, Best Buy, and others. We are launching with PayPal later this year. It gives consumers ubiquity, to use the points wherever they are for what means the most.
When we can’t build a specific partnership, we also have ways consumers can use points via mobile app or desktop for select charges on their credit card statement. You can use points to pay it down, instead of cash.
Will: The ‘Thank You Program’, you hear so much about it. How do you integrate that functionality into the mobile app? And how is that translating into increased engagement?
Mary: We have within our mobile app, to check your point balance and use those points for charges or gift cards. We’ve seen tremendous engagement with that. In 2016, we launched and it accounted for 10%, in 2017, mobile went up to 25%. What’s amazing, it’s growing the pie. So redemptions overall, increased by 20% total.
It enables consumers to discover the rewards program, who aren’t as engaged with it. It’s great for us, because when people are able to see the value of the rewards program, they feel good about using the card for payments. You want to create that continual cycle of seeing value from the product the consumers have.
Will: You mentioned making sure the consumers sees the value of a rewards program. How difficult is that to push the message, or make sure the value is set and the consumer uses it?
Mary: That’s where mobile has created such great opportunities for us. To make it easier for consumers to discover it. When they’re on the app and paying their bill, right there they see they have points and can cover their charges. Or if they’re checking out at Best Buy and they enter their banking card number, it pops up to say you can use points to cover the purchase.
We actually have to do less specific marketing to educate the customer. They’re able to discover it themselves. We also have the benefit of having a true global rewards program. We’re live in 11 international markets in addition to the US. We can look at best practices across the globe in driving loyalty, and apply them to the different markets. For instance, in Asia, one of the most popular ways to redeem is when you make a transaction, you get a text message that says “Do you want to use points for that?” and the customer just texts “Yes”. That’s something incredibly popular in Asia markets, that we’re considering to bring to the US.
Will: What about the ‘Thank You’ program in general. You see the commercials, and marketing of it. Why has that been such a huge success story, and a model for loyalty programs?
Mary: One of the unique things about the programs, we leverage it across our Citi relationships. So if you’re a Citi Gold customer with a retail banking side, and a Thank You Prestige Card, you’re getting points through both of those relationships, into one points bank. You don’t see that often. We’re also constantly looking at how we offer the best value, and go to where the consumer is. So it makes it easier for the consumer to engage with the program.
It used to be many people would wait and store up their point bank, before using them. Through many of the redemption options today, people use their points on average five times a year. That just creates this constant reinforcement of value for being a Citi client. That’s what my team focuses on every day.
Will: Mary, thanks for taking the time this week, I appreciate it.
Mary: Thank you for having me.
Will: Will mobile payments replace the need for kiosks? It seems like the majority of observers think it will be a compliment. Where do we stand right now with how mobile payments and kiosks going together?
Elliot: That’s a loaded question. They go together in different ways. The biggest long term factor we’re looking at is the growth of ecommerce. Ecommerce is driven tremendously by mobile. Where kiosks come into ecommerce is self-service kiosks is a point of sale for ecommerce. There are a lot of brand manufacturers who are expanding into various venues to get their products to the customer. That includes self-serve kiosks, in a transportation venue, or retail area. The self-serve kiosk as a merchandising tool is growing rapidly.
One way mobile payment will influence self-serve kiosks, the customer could be sitting at home and looking to make a purchase, and after a purchase they will get a list of places to pick up the merchandise, which could be a kiosk. So in this way, we’re seeing the mobile device could direct consumers to the kiosk. That has great growth potential.
Another way the two are complimenting each other is we have a lot of self-serve kiosks replacing traditional retail formats. Micro-markets are growing, where there used to be a vending bank to serve themselves, instead of having the vending bank, we have a kiosk there and open shelving. They’re pulling the product from the shelve, scanning the bar code at the kiosk, and mobile payments is an option consumers will have at the kiosk. As self-service expands, mobile will tie in with that growth.
Will: One last question, do you think at this point anybody who is getting into self-service, they have to keep mobile payment in mind as an option to pay?
Elliot: It all depends on what location you’re talking about. There are some demographics who are slow to use mobile payments. Areas where there is older people, and cash is by no means dead.
The general feeling in the industry among the technology players is you have to have every possible option. Then you evaluate by a location-to-location basis, as to what channels you deem to be most relevant. There are some places today you don’t have to offer cash as an option. We’re seeing the numbers out there, the mobile option is gaining acceptance. You can’t be in retailing today without mobile acceptance.
Will: Elliot, thanks for taking the time today, I appreciate it.
Elliot: Thank you, Will.