Loan and credit card company Latitude Financial expects consumers will quickly adopt mobile payments once the major banks all roll out digital payment options.
Latitude, which was spun out of GE Finance in 2015, recently launched Apple Pay and will soon follow with Android Pay and Samsung Pay.
“Our innovation agenda starts and ends with the customer and we know our customers want these features, and that they will deliver a superior payments experience for them,” says Jess Aloi, General Manager, Cards Partnerships.
She expects the use of plastic to decline as mobile takes off. “We are at the beginning of the adoption curve, but once all of the major banks roll out all of the digital payment options, mobile payments will start to scale quickly,” she says.
While cards and payments are changing rapidly, there will still be demand for credit, she says.
“The customer need for credit to fund a transaction will remain, but the way that we serve that need is likely to change a lot,” she says. “It’s certainly not that much of a stretch to imagine apps replacing cards altogether in the medium term.”
Aloi says that as a challenger brand, innovation is very important to Latitude Financial.
“We’re a relatively new business and we are trying to cultivate a start-up mentality. We have big ambitions, but in order to realize them we start small, we run at things hard and we learn as we go,” she says. “Nothing beats highly expert agile teams to drive your innovation agenda.”
Latitude holds innovation events in-house and with partners and co-creates products with its customers as part of its product design cycle. It also has a UX lab on-site.
Along with the launch of mobile payments, Latitude also launched a wearables payment solution in July with the GO Mastercard that it issues in partnership with Harvey Norman. Aloi says customer take up has exceeded expectations, “which tells us that customers are ready and willing to embrace new forms of payment”.
Customers also live their lives on their phones and they are much more demanding of issuers and payment providers
Key is creating products customers love
Latitude is also participating in a pilot with Transport NSW, which allows customers with one of its Mastercard products to tap and pay when they board a ferry, instead of using their Opal card.
Aloi says much of the innovation in payments is driven by higher customer expectations and the fact that they are far less willing to wait for new products than previously.
“Australian consumers in particular, because of the rapid adoption of contactless payments, have naturally come to expect a faster experience at point of sale,” she says. “Customers also live their lives on their phones and they are much more demanding of issuers and payment providers in terms of the digital service experience, and the ability to manage everything they need to, on their own device.”
Aloi says the New Payments Platform
(NPP) will be a game changer, not just because of faster payments, but also due to the richer data, which will in turn enable richer experiences for consumers. She expects to see a huge amount of innovation in development of overlay services.
In terms of whether the NPP represents a threat to credit card issuers, Aloi says there is still a lot to play out.
But she adds: “There is certainly potential for the majors to leverage their ownership of customer aliases to generate an advantage.
“The game for issuers is the same as it ever was though – if you want to defend and grow, you have to create products that customers love, and increasingly that also means digital experiences that are amazing. If you can do those things there will always be room in the (digital) wallet!”
Latitude Financial was born after GE Capital sold its Australian and New Zealand consumer finance business to Värde Partners, Deutsche Bank and KKR in late 2015. While the business already existed, the Latitude branding is new.
It has supplies personal loans, credit cards and insurance to 2.5 million customers and its products include Gem Visa, GO Mastercard, 28 Degrees Platinum Mastercard, MYER Card and MYER Visa.
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