What job do I want my payments technology to do for me today?

In his new book, Competing against Luck, Clayton Christensen, Professor of Innovation at Harvard Business School, describes in detail the Theory of Jobs to be Done – a deep understanding of why someone, for example a consumer, or an innovator, makes a decision. “The vast majority of innovations fall far short of ambitions. Correlation is not enough; causality needs to be understood.”[1]

What are the implications for payments? Nobody wakes up in the morning and wants to make a payment; thus we are told the payment should be as inconspicuous and frictionless as possible. Similarly, few people wake up in the morning wanting to use their smartphone to make a call. Expecting something to do what it has always done, just a bit better, is innovation by correlation. Causality demands we ask, and repeatedly ask, “What is the Job to be Done?” Only occasionally is that simply making the payment. Understanding the whitespace is key to unlocking substantial value-add opportunity.[2]

Accenture also acknowledges the need to understand causality. “Traditional segmentation does not go far enough……Categorizing consumers based on age, income, marital status or ZIP code is business as usual and still has merit……Yet segmentation based purely on demographics does not provide this deep customer insight. For one, it does not account for customer characteristics in today’s all-important digital context. It also lacks the human insight essential to bring truly personal value to consumers. It misses the deep emotional currency of money—what it means to how people live and to how they see themselves.”[3]

In short, though occasionally the requirement is to do the basics right and no more, the greater opportunity lies in widening our traditional perception of payments. Payments technology needs to deliver a curated experience, across the entire buy cycle from research or impulse purchase (which, Prof Christensen argues, isn’t really an impulse; it is catalysing a latent need, again a Job to be Done) through to reconciliation, delivery, and returns.

Consumers want curated experiences; and these may be different even on a single shopping trip. And they do not want an identical experience independent of location and device; if they have made the effort to visit a store (as most do, most of the time), they expect and deserve a differentiated experience.

Recent innovations in the Nordics offer some insight. The region has consistently been a cradle of payments innovation. Cheques are long since gone, and an increasing number of fast food and retail outlets no longer accept cash. The global banking industry push to instant payments is old news; Sweden and Denmark have had instant since 2012 and 2014 respectively.[4]

Retailers are trialling new models.  Rema, one of the leading retailers in Norway, recently launched a loyalty programme Æ, providing a 10 percent discount on fruit and veg purchased in-store. Within 48 hours of launch, 6 percent of the total Norwegian population had downloaded the App; three weeks after launch, adoption was 16 percent of the population. Rema had a challenging lead time from requirement definition to launch of around four weeks across the Christmas period, which they achieved by leveraging features including tokenisation and identity-on-file from their technology provider. “We needed our technology provider to deliver a solution for identifying the customer in real time, with their payment card. The real time identification of the customer is key for the success of Æ.

“I want to highlight our technology provider’s ability to take ownership of these challenges and solve them quickly and efficiently within a short time frame,” says the project leader of Æ at REMA 1000.

Delivering a curated experience requires a connected estate. The experience needs to be tracked, adjusted, and improved quickly, overnight if needed. And it needs to be done at scale – all stores in a franchise must be updated near simultaneously.

The traditional POS device was a ubiquity tool; few of us notice the brand name of the provider. It did a very basic job, well.  The current generation of devices is very different, more like a smartphone than a first-generation mobile phone. It is easy to forget that the iPhone is only a decade old; it has set entirely new user expectations. The POS device is similarly transforming, as retailers and acquirers refresh their payment estates. New POS hubs are multifaceted and highly mobile, and support multiple payments modes and consumer interactions such as digital advertising. This offers a solution to the age old problem of frustrated consumers in the queue – provision of interesting offers and content whilst they are waiting, not to mention the ability for merchants to personally engage and conduct transactions with customers in-aisle.

“Value delivery in payments is about elevating relationships with consumers. Today’s payments apps are transaction focused. Think of all this as first-generation functionality.  It is solid, but it is not sufficient. 66 percent of consumers characterize their relationship with their primary payments provider as purely transactional. 63 percent of consumers participate in payments rewards programs.”[5]

The new Job to be Done is defined far more broadly than ‘payments’. Many people wake up in the morning and want to shop. That requires a new generation of technology, delivering a curated experience, at scale.

[1] Competing against Luck, Clayton Christensen, Professor of Innovation at Harvard Business School

[2] ibid

[3] 2016 North America Consumer Digital Payments Survey, Accenture

[4] http://www.instapay.today/tracker/

[5] 2016 North America Consumer Digital Payments Survey, Accenture