Winning the business of the millennial generation

There is no demographic being wooed by businesses quite like the millennials. The 18-29 generation is tech savvy, sophisticated, cynical, difficult to market to and, critically, the professionals and spenders of today and the future.

It is little surprise then, that publications are awash with articles and reports on how best to engage with this generation. A recent example here looks at what this generation supposedly wants from banking.

All very interesting and informative but one thing the article doesn’t cover is how the millennial generation like to interact, not just for banking but for commerce in general.

The answer is, unsurprisingly, online.

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Biometrics and the trust factor

Last week was a very busy news week for biometrics.

There was news from Uber that their drivers will soon have to take mandatory and regular selfies in order to verify their identity. This was followed by an announcement from a researcher in Singapore who claimed that iris identification software, as piloted by the new Samsung Galaxy Note 7, would be the catalyst for the development of biometric driven mobile payments. Finally, Leonovo and PayPal, founders of the FIDO Alliance, shared the news that they were working on ways to have fingerprint authentication on laptops for payments.

But, even though biometrics are taking a protagonist position on today’s and tomorrow’s technology, there is still some resistance from users.

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Bringing trust into Indian mobile payments

A report out this week has predicted that India will see a tenfold increase in digital payments between now and the end of the decade. That will see a rise to $500bn annually and see the GPD of India rise by 15%. However, unless more trust is built between consumers and banks, this prediction might not come to pass.

Payment industry commentators have often pointed to economies such as India and China as places of great innovation and progress. Just as nature abhors a vacuum, so does economics. Where there is a gap in the market, it will be filled. And this is what has happened in countries such as India where mobile technology has offered financial services to those who previously lacked them.

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Contactless has finally taken off

It was 2007 when Barclaycard launched the first contactless card in the UK. With a maximum spend of £15 and accepted by very few retailers, contactless cards were seen as little more than a gimmick and consumers were sceptical of their security. Sensational headlines about how easy they were to skim and hack did nothing to calm these fears.

Embraced by fast food chains, sandwich shops and coffee shops as a way to beat queues and serve customers quickly, slowly the technology began to expand.

Security concerns were addressed head on: banks and issuers assured card holders that the cards are safe, pointing out that added security, occasionally the consumer will be asked to enter their PIN number.

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EMV and the new avenues of fraud

It has nearly been a year since the 1 October 2015 US liability shift deadline for US credit card companies and merchants to switch to EMV cards. Despite concerns about costs and the challenges of roll out on such a huge scale. EMV adoption has rapidly increased. MasterCard has announced that 80% of its credit cards now have chips, while it has 1.7 million chip-active merchant locations on its network.[1]

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Open Banking and PSD2 Uncertainties

The use of APIs in banking has largely been limited until recently, mainly due to regulation and security. However, European banks will soon be using APIs to provide access for third-party providers, as one of the many changes required by the upcoming the Second Payment Services Directive (PSD2).

A new report by PwC highlighted that banks are concerned that these changes will cause them to lose control of their customer interface.[1] A vast majority (88%) of the banks surveyed in the report believe that PSD2 will have an impact on their business and many see it causing them to change their strategies. Despite the uncertainty and the apparent risks, 44% are planning on providing an open bank offering, with 66% intending to integrate foreign products or functionalities into their own digital offering.

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The Importance of Security for Open Banking

The recent report by the Competition and Markets Authority’s (CMA) has announced significant reforms that are aimed at shaking up the banking industry. The Open Banking report, promises more transparency for UK banking consumers, open APIs and easier account switching.

These initiatives are welcomed by the Fintech industry, as they intend to increase competition, whilst helping customers obtain a better deal from their banks.

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Cultivating Consumer Trust

To get ahead in the competitive ecommerce landscape, merchants have invested hugely to provide a seamless and frictionless user experience, with speed and convenience the main objective. The success of brands such as Amazon and Uber, which lead the way in user experience, suggests that consumers have embraced frictionless, one-click payments.

However, there has been a lot of recent press reports about whether online businesses compromise the security of consumers   to improve user experience.

If so, are consumers aware of this trade-off? It also makes us question if we have now gone too far, and whether consumers would actually welcome and feel more positive towards a brand with more visible security measures.

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Why a little bit of friction is no bad thing

In a video for Fintech Finance, David Poole, our Director of Business Development, spoke about our work with Worldpay in demoing the MYPINPAD solution.

One critical topic he discussed was that of security and giving consumers control over their transactions. This is an area we have been vocal on and with good reason.

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MYPINPAD Joins Vendorcom’s All Party Parliamentary Group on Payment Systems

MYPINPAD is excited to announce its participation in the All Party Parliamentary Group (APPG) on Payment Systems, launched by membership organisation Vendorcom. The group will address key developments in payments systems that affect consumers and merchant businesses. It will also look at the role of payment systems in ensuring the stability of the UK economy and society.

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