It doesn’t seem that long ago that mobile phones were used to perform just a handful of basic tasks – voice calls, text messaging, and, if you were lucky enough, for taking poor quality photographs and videos.
But the advent of smartphones and the tablet has changed all that. These days we use our ’devices’ to make video calls, to download and listen to music, to check our email and our social media accounts. Mobile technology is now beginning to change the way we bank and manage our money. Some would go so far as to say that, as a consumer today, it doesn’t really matter whether or not you have your wallet on you, so long as you’re carrying your phone.
But what’s happening in the business space? Are users still supposed to be wowed by being able to initiate a payment remotely?
Tom Gregory, Head of Digital Payments at Barclaycard believes there is a lot of potential yet to be fulfilled. “Although we started by focusing on the consumer market, in Barclaycard we have an area of our business called global commercial payments which is basically what traditionally you or I would know as corporate credit cards. And there are a lot of things that we can take from what we are doing in the consumer world into that environment,” he says.
One such idea is to examine how the new technology could be utilised to transform the way companies manage expenses. Traditionally, the process that an employee follows to complete an expenses claim remains largely manual and paper-based. Employees are required to fill in various forms which are then sent to management for approval before being forwarded to accounts staff to key in each item into the firm’s accounting system. If mobile payments technology could be linked to an expense management app then perhaps this could help to make it a simpler, less time consuming process for employees and account managers alike.
“If we could put some of our payments services onto a phone that could be really good for employees in a company because it would help them to manage their expenditure, and link it in to an expense management system then you can make it really easy for them in terms of reconciliation of expenses in terms of availability and just the simplicity of it as well,” says Gregory.
Cutting out the middle men?
Mohamed Anis, Head of Client Services for Consulting and System integration at Infosys, believes that corporates could perhaps go one step further and use the latest mobile and tablet technology to cut out the credit card companies and banks altogether.
Describing the benefits of this approach he draws a comparison with disintermediation strategies used by big retailers in recent years. “I have seen precedents set”, he says. “There is a big consortium of retailers in the United States who realised that they were processing in the region of billions of dollars in card payments every year. And of that, a percentage was going straight to card companies as fees. So the thinking is, can we actually issue cards to our regular consumers, and can we pass this saving directly back to the customer, thereby disintermediating some of the card companies and some of the middle men.”
Anis wonders whether a similar idea could one day be applied to corporate treasuries to assist in the payment of company expenses, with reimbursement of payments taking place exclusively through mobile phones, making the company credit card redundant.
“What is currently stopping these corporates from leveraging these large cash pools that they already have, and using some the latest technology around mobility and tablets?” The technology is already in place, he says, it is merely a matter of working out how best to apply it to expense management. “One of our clients has already rolled out a fully-fledged mobile wallet to 16m customers in India. So the technology has got the scale, we have got the security figured out, the infrastructure that is needed to transfer money to an employee. All of those bases have been covered from a technology perspective.”
Like Gregory at Barclaycard, Anis is also excited about the potential of apps to improve the management of expenses. “It is something we have been looking at as well” he says. “What it would allow you to do is, if you go to say Germany you could take a picture of your food bill at the airport and request automatic reimbursement. I think about 70% of the app is already there, the final mile of the payments process is all that is missing really.”
Whether or not that will come by disintermediating the banks remains to be seen however.