Knowledge bites: about super apps and open banking with Planet and Mastercard

Paul Stoddart of Mastercard, and Rory O’Neill of Planet, the Platinum Sponsors of MPE Berlin 2020, discuss the most trendy topics of the season: open banking and super apps respectively

Paul Stoddart, President, New Payment Platforms, Mastercard

Open banking in Europe is often described as a revolutionary change, but the concept is actually fairly straightforward. Open banking gives people and businesses more control over their bank account data, and enables them to give consent to third parties – such as fintechs or other banks – to access those accounts and build new services.

Across the globe, the move towards open banking is underway. It has been interpreted in different ways in different regions, but the intention remains the same: to encourage more competition, innovation and better solutions for customers.

Europe’s open banking regulation – PSD2 – came into full effect in September 2019, and things have developed at pace since. By the end of 2019, more than 260 third parties were registered to connect to financial institutions’ APIs and more than 1 million UK citizens had used an open banking service.

The answers to open banking’s growth lie in the opportunities it offers all parties. Firstly, it allows banks to improve customer relationships through broader data access and by offering better services - such as account aggregation and more accurate credit decisioning. At the same time, digital players and third-party providers get the opportunity to develop new services to improve customer experience and offer users improved personalisation.

In order to continue on this journey and realise the full benefits to all parties, there needs to be a willingness to overcome the early challenges. Collaboration is key and trusted, established providers, like Mastercard, will play a role in delivering solutions and solving technical challenges that help financial institutions and third-party providers connect, and protect customers against fraud.

We’re still just at the beginning and the opportunities of open banking are much broader than just banking. One can easily see how it could evolve into ‘open data’ and improve customer experience in other markets, such as pensions, insurance, utilities and the wider digital economy. This vision might be a few years away still, and some may still doubt whether it will ever take off, yet I wholeheartedly believe open banking will succeed because – at the heart of it all – businesses and individuals need to exert more control over their personal data in a digital world and have a genuine need for these innovative, new solutions.

The new normal: how personalised digital payment apps will become the cornerstone of a customer-centric retail experience

Rory O’Neill, Chief Product and Marketing Officer, Planet

For international spenders, there is a common thread that runs through the entire retail experience: their mobile phone. From planning their trip from their sofa in Shanghai, to strolling down London’s Regent Street, and paying for a luxury handbag in their favourite store, this ever-present companion offers a major opportunity for businesses looking to shake up their customer engagement strategy.

A majority of retailers’ needs can now be met through single mobile apps. ‘Mega apps’ like AliPay and WeChat allow brands to interact, attract and transact with international audiences, who frequently spend almost four times that of their domestic counterparts.

Last year, our data showed sales to international shoppers in Europe grew by 7%, with the average spend per purchase also rising, by 3%. This is in sharp contrast to the 2.2% sales growth measured across the retail sector in Europe, including domestic shoppers.

One of the most efficient and effective ways to reach these high-spending international shoppers is through mobile payment technologies – which for many audiences make up the majority of retail payments in store.

Three out of five US smartphone users have a mobile wallet that they use to pay for purchases in store. What’s more, research from PwC has shown that over two-thirds of Chinese consumers expect brands to use their data to provide personalised experiences. Digital payment apps help brands do just this: connecting with customers in a way they appreciate and understand.

Retail journeys can now be entirely personalised for these prolific spenders. Mega apps offer a platform for sophisticated, targeted marketing campaigns and customer interaction, elevated by geo-targeting capabilities that enable brands to serve up content at the right moment, attracting shoppers straight into their store. These leads are then easily converted into sales via agile digital payments technology in-store, helping people spend freely in currencies they’re familiar with, but also through methods they use at home.