In Switzerland, old payment habits die hard. Debit and credit cards are still the preferred ways to pay, and most people carry cash. New payment methods are barely a blip on the landscape. Going by these insights from the Swiss Payment Monitor, traditional card providers have nothing to worry about. But is a Business-As-Usual strategy really the best option?
Old habits can and do change. Banking customers in Switzerland are not switching their alliances yet – but the initial signs are visible. 70% of the Swiss Payment Monitor’s respondents indicated they would be open to using new forms of payment more frequently in the future.
The main factor for choosing a payment method, and not just in Switzerland, is security. Bank customers know they are protected if their card is stolen. The fintech newcomers cannot offer their customers anywhere near the same guarantee. This does afford traditional providers some leverage over new competitors right now, but will not cushion them from disruptive change forever. With the big tech and data companies showing an increasing appetite for a share in the payments market, traditional card providers should therefore scout the horizon for emerging changes to their role in the landscape.
Stay relevant – with or without plastic
Some providers are already working on new concepts that mark a shift away from plastic cards. Among the stream of ideas emerging from Visa innovation labs, for instance – everything from biometric authentication, to concepts for turning connected devices in the IoT into potential points of sale – the actual physical plastic is no longer important.
The key challenge will be to stay relevant. With so many new players surging onto the market, card providers can differentiate by combining traditional security with innovative services that use their considerable base of customer and purchase data. As Visa (and others) show, it is by leveraging the power of data analytics and AI that card providers can differentiate. Essentially, card providers will have to evolve from credit-card companies into data companies. Through predictive analytics, companies can sharpen their fraud detection abilities, and offer chatbot-type apps to improve response times and deliver a customer experience that is designed more tightly around the individual user. Smart tools that customers can use to gain instant insights into their own buying patterns are another option.
For more ideas and insights on finance and banking in a digital age, visit Cognizant online.