“… We are a payment services company … we have a very good core business -- the charge card and credit card business … As we began to think about where commerce and the world may be going we realized that we needed a different strategic thinking about it …so we thought about how the world will begin to interact and so people will decide how they want to interact and they will choose based on a couple of things … convenience, security and the third one, value … When I think about convenience, if you are sitting at a computer or you may be walking around the street and we may push a deal for one of our merchants to you, you have a mobile phone because it is convenient for you to transact with that device … you may be somewhere and you have none of those things, but you have a fingerprint and that’s how I interact … so our philosophy as a payment company … we don’t pick either one, we have to let the customer choose how they interact with us. Mobile device is just a form factor.”
~~ Gilberg Ahye, Executive Vice President & Chief Development Officer, American Express Company, on his company’s view on the future of mobile commerce as quoted during “The Future of Mobile Commerce,” event hosted by NYC Media Lab, July 23, 2013
Lafayette Restaurant in New York City to attend “The Future of Mobile Commerce.”
DeSilva+Phillips and NYC Media Lab, this annual invitation only event included a wealth of insights by business leader Gilbert E. Ahye, Executive Vice President & Chief Development Officer, American Express Company. The event was moderated by Roger Neal, Founder and Executive Director of NYC Media Lab. Q&A was held after the session.
THERE WERE MANY TAKEAWAYS AND FACTS IN MOBILE COMMERCE I WOULD LIKE TO SHARE WITH YOU; ONE MENTIONED IN THE BEGINNING OF THE SESSION BY AHYE PERTAINED TO GEOGRAPHICS
Not surprising, mobile has surpassed the personal computer in the U.S. all while the U.S. has invested billions of dollars in POS (Point-of-Sale) infrastructure. Ahye believes POS is going to take a very long time for the U.S. to adapt fully to NFS but eventually the credit card business will be replaced by mobile in the U.S.
Besides India and China, according to a recent Juniper Research report, emerging markets such as Brazil, Turkey, etc., are growing at phenomenally faster percentage rates versus mature markets like North America and Europe. However, consider that even with the lower percent growth rate of mobile commerce in the U.S., we still lead the world significantly in regards to the actual user population of mobile commerce.
Juniper Research stated that that the introduction of mobile wallets has provided access to poorer people in some emerging markets, where the proportion of adults without a bank account can exceed 50%. Thus, a new market of mobile users has converged.
Juniper Research also reported in June that mobile commerce transactions reached $1.5 trillion in 2013 and are expected to more than double, at $3.2 trillion by 2017.
TECHNOLOGY IS KEY WHEN IT COMES TO DISRUPTIONS OF MOBILE COMMERCE
American Express is constantly looking at various technologies and has already made investments in other countries. Ahye believes technology will determine how mobile commerce will evolve and American Express will continue strategizing and participating without picking a “winner or loser” technology.
CERTAIN TECHNOLOGIES ARE MORE PROMISING THAN OTHERS
“We know that the NFC device is probably a better form. With an NFC device you can get information. The world is about data and information. So the direction should be about data and how we get data – it is about how do you get data, how do I make the right type of offer to a customer,” explained Ahye. “What information do I get or how do I do it. If you think about American Express, I know a lot about a customer, what merchants a customer has and how much a customer spends, profile. So NFC can profile people – someone spending $150,000 on pet products we know we should push pet products to her. It is really hard to do that on a mass market so the devices need to give us information, we need to create the layer to analyze all that mobile data to promote to that customer? That is the holy grail. We don’t want to be collateral damage to get the data,” added Ahye.