The Rise of Mobile Payment Services and What it Means for the Customer Experience in the Financial Sector

With 56% of US bank account owners saying they access internet banking services via a mobile or tablet device and 34% saying they routinely use banking/financial services apps, no company in this industry can currently overlook any detail on their mobile and app experiences, or not address customer requests in the channels they actively use to reach out to brands. What are leading companies doing right, and what should legacy institutions strive for?

Smartphones are how we get things done online

Over the last few years, personal mobile devices have climbed their way to become the primary medium we use to go online. The usage of these devices has become prevalent across the many things we need to get done in our daily lives, including financial services.

The Rise of Mobile Payment Services
Despite growth flatlining between 2017 and 2018, mobile has increased by 83% in its importance as the ultimate device to go online since 2016. Digital financial services on mobile are no different during the same period, as banking apps usage has increased 36% and mobile payments usage with 40%.

The decline of skepticism in performing transactions that involve sensitive information on other devices aside from the traditional PC/desktop/laptop has contributed to the growth of e-commerce transactions on mobile as well as the spread of mobile payment services, like PayPal or Apple Pay, whether on daily grocery store visits or to pay for meals at your local restaurant.

The importance of the app experience

With mobile being the preferred medium to access most things online, banking services are no different.

This reason is one of the premises for the fintech company boom we are witnessing. Over the last couple of years, these companies have been picking up the user base largely overlooked by well-established institutions by coming up with products that respond well to their consumer day-to-day banking services demands. Although late to the game, legacy companies are picking up on the momentum created by digital money solution apps.

By looking at what tech disruptors in the industry have been doing, many legacy institutions have launched mobile payment service ventures in the US and other countries worldwide. Visa with Visa Checkout, Mastercard with MasterPass, and Chase Pay from JP Morgan are a few of the examples in the US. However, coming late to the game and facing a lot of challenges in user experience caused many parent companies to shut down these ventures. Their mobile payment services are now served to consumers through partnerships with both Google Pay and Apple Pay, which offer far better app experiences to their credit card clients and have a far larger market share on mobile that these companies can harness.

The importance of the app experience
PayPal and Apple Pay largely dominate the share of usage of mobile payment services in the US.

Why customer reviews matter

As of October 2019, the last legacy app standing in the US mobile app market is Chase Pay from JP Morgan. Although it is set to be discontinued in 2020, we looked at its rating on both Apple and Google app stores and compared it with the leading mobile payments service in the country, PayPal.

With no surprise, PayPal has superior average ratings on both stores, Google Play and Apple App Store, when compared with Chase Pay.

On Google Play where we can see the percentage of reviews which have received a reply, PayPal has responded to 673 English language reviews since the beginning of the year. Of the total 14,541 reviews, which received a negative sentiment in that language according to our tool analysis, the customer care team has replied to 5%. On the other hand, Chase Pay’s app on Google Play hasn’t registered any reply from JP Morgan’s support team. Google Pay’s app on its store has an even higher response rate when compared with PayPal’s, as the Google app support team has responded to 28% of all negative reviews since January.

An analysis of the top topics that bring users to review the apps also clearly show more satisfied users for PayPal, and less satisfied users for Chase Pay:

Paypal on Google Play

Why should financial companies care about the reviews from their customers? In 2019, US bank account owners are saying consumer reviews are their number 2 source for information about a product or service. To unlock growth from future users, anyone who wants to see their app or product succeed should address their negative reviews and turn the discourse back around.

Be where your customers want to reach out to you

Social media is another channel where customers flock to reach out to their financial institutions. Having positive feedback on these channels on your product or service matters, as 23% of all US bank account owners say they use social media to find out more about products and services, and that good reviews on these channels are a key decision driver. However, users are not just passively looking to social media, with 16% of all US bank account owners currently use at least one social media platform to ask a question to brands or send and receive messages from brands. This large chunk of users cannot be overlooked, and social media is also why fintech companies like Revolut in Europe are building large customer support teams to give their clients the responses they need.

Be where your customers want to reach out to you

Where on social media are US bank account users more likely to reach out to brands? Facebook. According to GWI data, they prefer to use both Facebook and Facebook Messenger to reach out to brands. Twitter has gathered the reputation of being the social media channel used for customer care by most brands due to its characteristics as a platform, but clearly, its usage has been shrinking, as it decreased 10% between Q1 2017 and Q2 2019.

Knowing where your customers are and having the right tool and processes in place to make your support team more efficient in handling large volumes of requests can and will help you unlock business value.

To know more about how we can help you mirror the best practices of customer experience in your industry to meet your business demands, reach out to us.