Transformation of Cell Phones into Credit Cards to Begin  In this blog I have reviewed several different mobile payment concepts as well as the prospect of mobile phones replacing credit cards.

Here’s how it works on the back end Transformation of Cell Phones into Credit Cards to Begin :

With the way smartphones are evolving, it seems inevitable that at some point at least one of these new technologies will take off and many of us will add another form of electronic payment to our arsenal.

Mark Sullivan of PCWorld. com has a great article about the likelihood that this process will begin in 2011 and reach “broader adoption” in 2012. He writes specifically about one of the contenders – a start-up called Boku – but his reasoning applies to an emerging industry like whole. This is how he describes the mobile payment process Transformation of Cell Phones into Credit Cards to Begin :

Scenario #1: You’re in a store and find something you want to buy. You go to the counter and swipe the phone. The chip in your phone is verified with the store’s billing system and your payment is made.

Scenario #2: When you shop online, you have even less time to rethink impulse purchases. You watch the first two minutes of a movie and decide you want to pay to watch the rest. You simply enter your phone number on the website. Your phone company / credit card company will send you a text message asking you to confirm your purchase. You return a confirmation text and that’s it Transformation of Cell Phones into Credit Cards to Begin .

. When you buy a phone, you also have the option to buy a credit card.

A “credit card” is just a chip that’s built into your phone. Your purchases do not appear on a separate credit card account. They are now listed on your phone bill Transformation of Cell Phones into Credit Cards to Begin.

Sullivan’s outline of the future mobile payment process should also help dispel widespread mistrust that mobile phones will eventually render credit cards obsolete. What will actually happen is that credit cards will turn smartphones into payment tools, not the other way around. In other words, the only thing that will be gone will be the piece of plastic that currently contains your credit card account information. Just as books are gradually moving from their age-old paper form to their current digitized appearance Transformation of Cell Phones into Credit Cards to Begin .

Perhaps the most interesting question, aside from who or what will become the dominant smartphone payment platform of the future, is what role mobile networks will play in this process. Broadly speaking, there are two possible scenarios:

The carrier provides a line of credit.
The credit line is provided by the bank Transformation of Cell Phones into Credit Cards to Begin .

The first option will allow carriers to take the lion’s share of the processing fees charged to merchants accepting mobile payments and potentially charge customers interest on the portion of their balance that isn’t paid off at the end of the month. Basically what credit card companies do. But do carriers want to become credit card companies? Or perhaps the question should be whether regulators will allow them to act as banks whether they want to or not. The answer is that it is unlikely to happen Transformation of Cell Phones into Credit Cards to Begin .

The second option is the one that is already being tested by three large American operators – Verizon, AT&T and T-Mobile. They teamed up with credit card issuer Discover and British bank Barclays to test a service that will allow users to make payments using their phones, which will then be processed in Discover’s payment system. Barclays will apparently manage credit card accounts. Transformation of Cell Phones into Credit Cards to Begin  It was not explicitly stated, but it appears that one of the banks (probably Barclays) will underwrite the lines of credit.

Whichever payment service wins the mobile race, credit cards in their plastic incarnation are unlikely to completely disappear from our wallets anytime soon, just as paper books are likely to co-exist with their digital counterparts for some time to come. But with enough time, they both go the horse-drawn wagon route Transformation of Cell Phones into Credit Cards to Begin .

Users expect more, faster and better banking services.

This applies to everything and credit card services are no exception. Banks that design the best apps for their credit card users and create optimal user journeys will win over the competition. They will need technology to do this Transformation of Cell Phones into Credit Cards to Begin .

Here we summarize five ways banks can use new technologies to create best-in-class user experiences for credit cardholders.

AI and big data provide faster loan approvals
In the past, getting approved for a credit card could be a cumbersome process Transformation of Cell Phones into Credit Cards to Begin .It will take a few days to a few weeks. The salesperson would approach the customer, sign the contract, and enter the customer’s information into the bank’s system. The bank would then check the customer’s credit history and approve a certain credit limit. Finally, the bank would send the card to the customer, who would then activate it by phone or purchase.

Figure 1. Credit card approval processes

In contrast, online loan approval is much faster and more convenient. Internet companies acquire customers through digital marketing. With the customer’s permission, they identify and analyze customer behavior and proactively offer a credit limit. Once a customer gets a credit card, which can be physical or digital, the bank dynamically adjusts the credit limit based on the customer’s spending patterns Transformation of Cell Phones into Credit Cards to Begin . They also cross-sell other financial products through digital marketing.

Big data algorithms and AI play a key role in this approach. With the customer’s permission, these technologies help banks identify, analyze and use real-time data about customer behavior and transactions. This dramatically speeds up credit processes while improving customer experience and risk control Transformation of Cell Phones into Credit Cards to Begin .

AI and big data in practice

China Merchants Bank uses Huawei FusionInsight Real-Time Decision Engine to automate the loan approval process. A process that used to take about a week is now almost instantaneous. Customers instantly receive a virtual credit card that enhances their banking experience Transformation of Cell Phones into Credit Cards to Begin .

The engine also supports an intelligent real-time anti-fraud system. This cut the number of high-risk cases in half, saved CNY 100 million in losses, and increased processing capacity tenfold. Service continuity reached 99.99% Transformation of Cell Phones into Credit Cards to Begin .

Another example is the Credit Card Center of China Minsheng Bank, which partnered with Huawei to build a Big Data Joint Innovation Lab. The lab uses machine learning and artificial intelligence technologies to unlock the value of data and facilitate innovation. Its main goals include improving the customer experience, increasing marketing conversion rates, improving risk management and reducing administrative costs Transformation of Cell Phones into Credit Cards to Begin .

China Minsheng Bank now uses a graph database that takes just five minutes to retrieve eight types of interrelated data on 17 million customers. The lab can intelligently identify and analyze customer feedback and respond by providing more than 400 million smart services per year. With Huawei’s help, the bank has also built a one-stop model development and training platform Transformation of Cell Phones into Credit Cards to Begin . Data teams use the platform to iterate algorithms 30% faster.

In 2021, Asian Banker recognized the partnership as the “Best AI Innovation Lab in China”.

Interoperability with payment platforms enables personalization
China is the world leader in digital payments Transformation of Cell Phones into Credit Cards to Begin . The country and the global shift towards digital payments began in the early 2000s. More than two decades later, in 2021, according to China UnionPay, 90% of all payments in China will be made through mobile apps.

2004 – 2010: Alibaba’s Alipay launched a checkout function on the Internet e-commerce platform. Users could link their bank card to an Internet account and pay for online transactions, allowing the rise of e-commerce Transformation of Cell Phones into Credit Cards to Begin.

2011 – 2016: WeChat launched its digital wallet to enable payments through the social media platform. Customers could now pay by scanning a QR code with their smartphone. They could also link their bank account and easily transfer money to others or to their WeChat wallets.

In an effort to popularize digital payments, WeChat Pay launched a “red packet” feature so users could send traditional money envelopes to friends and family via WeChat. The feature went viral during the 2014 Spring Festival Transformation of Cell Phones into Credit Cards to Begin .

WeChat Pay and Alipay were funded through funding. They used this money to encourage users and merchants to switch to digital payments by providing coupons and discounts. Both quickly became digital payment giants and established complete payment ecosystems. This process cut banks out of the middleman as they were not involved in payment processes or had access to user payment data. As such, they could not prevent money laundering and credit card fraud, leading to higher transaction risks Transformation of Cell Phones into Credit Cards to Begin .

2017 – 2019: To better regulate digital transactions, China established Netlink. The organization began to centrally manage online payments made by non-banking institutions. This meant that WeChat Pay and Alipay had to share bank card users’ payment details with card issuers, helping banks mitigate fraud risks. This means that WeChat Pay and Alipay have remained independent and do not share data with each other Transformation of Cell Phones into Credit Cards to Begin .

2020 – 2022: The People’s Bank of China announced China’s digital fiat currency – e-CNY and began trial operations in many cities across China. Commercial banks also started to innovate. In addition, WeChat Pay and Alipay have started exchanging their users’ payment information. With the popularity of interest-free installment services, the credit card business model has continued to evolve.

Going forward, we expect interoperability within the digital payment system to continue to evolve. Regular credit cards will further be linked with UnionPay, Alipay, WeChat Pay and e-CNY, enabling personalization through big data analysis. The entire digital payment market will move to a multi-platform architecture involving both banks and internet companies Transformation of Cell Phones into Credit Cards to Begin . This will have a snowball effect on innovation and increase the added value of digital payment ecosystems.

Super apps create seamless services
As we have already discussed, digital wallets are becoming more and more popular. Many customers no longer need to carry a physical credit card, instead using a digital card on their mobile wallet. Now banks have a new space for acquiring, activating and retaining customers – mobile applications. To create a seamless experience for their customers, banks are deploying super apps that consolidate a number of services into a single app Transformation of Cell Phones into Credit Cards to Begin .

Financial services: This includes managing cards, accounts and credit limits, searching for transactions, as well as accessing online stores, insurance products, coupons and installment payments. Banks need robust digital operations to win customers through these scenarios Transformation of Cell Phones into Credit Cards to Begin .

Affiliate Services: Customers get discounts when they use the app to order food online, pay for food at restaurants, or take out and Transformation of Cell Phones into Credit Cards to Begin .

A quick guide to digital transformation in your wallet.

Co-authored with Luca Troisi, Founding Partner and Chief Digital Officer at Enhancers, this article is part of a series on the future of fintech and originally appeared on fintechdistrict.com Transformation of Cell Phones into Credit Cards to Begin .

Previous entries: A bank account becomes a marketing space

1. Plastic recycling
In banking jargon, payment cards are commonly referred to as plastic. The same raw material that industrial designers have been working with since the 1950s creates new and meaningful objects that have fueled the spectacular growth of the home furnishing industry worldwide. Today, UX designers can play a similar key role for debit, credit and prepaid cards in the age of open banking, envisioning future experiences and relevant new products, both digital and physical Transformation of Cell Phones into Credit Cards to Begin .

We Enhancers are already seizing this opportunity, starting with a preliminary map of emerging behaviors and trends and innovative card-based services. Here are the first results of our survey.

2. Open payment
Rituals associated with cards – such as hiding when entering PINs, writing down codes as fake phone numbers or constantly moving cards from your wallet to safe places at home and back again – show how cards are often seen as strictly personal, privacy-sensitive and potentially vulnerable objects Transformation of Cell Phones into Credit Cards to Begin .

However, a paradigm shift is occurring precisely in this discomfort zone, where cards are gradually turning into digitally shared money management tools.

Related to this trend are products such as Extend or Spendesk, which enable advanced management of virtual cards for companies and services experimenting with the temporary sharing of credit cards through mobile applications. In an open banking environment, cards are also becoming “open platforms”. Radically new participation options are being prepared.

3. Loan under construction
Cards were the fastest growing non-cash payment method last year (+17% year-on-year for debit cards, +11% for credit cards). This seemingly improbable surge in usage as the mobile payments hype peaks can be partly explained by increasingly inclusive policies with simplified and progressive access to credit cards for everyone.

Forget credit scores: next-generation services like CreditStacks (a card for professionals moving to the US) are based on experience building credit. The focus is less on users’ actual financial situation—their “history”—than on their potential, as defined by their money-related behavior, their payment patterns, and so on.

Amazon itself released its own Store Card Credit Builder; at the same time, more and more products are being launched that are laser-targeted at specific audiences: Deserve, for example, awards college students with a card designed to manage their education expenses as well as graduate stages.

Getting a credit card is no longer a medium-term goal, but a starting point. New interaction models are now available for cardholders, such as that provided by Zero: a loyalty service with payments, where new users start at an entry level with a few benefits, such as basic cashback and small rewards, and can then expand the program by reaching annual spending goals with increasing benefits and the increasingly popular physical card (from quartz to carbon).

4. Let’s get physical
Speaking of which, the actual properties of the card as a physical object are being heavily experimented with.

The plastic is complemented by embedded technology to maximize speed and safety

. Battery-free fingerprint readers on cards, for example, are likely to become a default feature for next-generation products: users add their fingerprints when the card is activated, and can then authorize transactions without having to enter PINs or external devices. Mastercard and Visa have already developed this kind of solution, which is being implemented by banks such as NatWest.

Zwipe goes one step further by embedding its fingerprint technology into wearable devices: not only is it a breakthrough payment tool, but also a source of highly valuable financial-biometric data that powers new services not yet introduced.

5. The end is the beginning
Openness, access, hybrid technology. If payment cards have a future – and we’re sure they do – this is where we should all start designing it. The development of fintech also includes a rethinking of plastics.

Roberto Maggio is a Partner, Chief Content Officer and Head of Verbal Design at Enhancers. He teaches Digital Marketing and Growth Hacking at IED, at the Università Cattolica in Milan and at the Interaction Design course at ITS ICT in Turin.

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