A global bank in your pocket: opportunities in holiday banking
Contactless payments, etickets and the banking apps which could make your smartphone a holiday essential
Our phones still have a bit of work to do though before they’re a totally compelling, holiday-friendly alternative to a credit card and a plastic envelope stuffed with Euros. But we’re not far off.
You know the feeling; you’re off on holiday, it’s 4am, you’re tired, it’s still dark, the car is stuffed full and you’re ready to head off to the airport for a bit of well-earned time off.
In the back of your mind there are two lists—the list of things you’re pretty sure you’ve packed and the much, much shorter list of things you absolutely, positively can’t forget.
Leaving without something on the first list is annoying but leaving without something on the second list is catastrophic and might actually stop your journey in its tracks.
What’s on your short list of essentials; Booking pass? Passport? Credit cards? Cash? Car hire paperwork?
Time to take your digital wallet abroad
Predictions are a dodgy business but I’m going to make one that I think is a pretty safe bet; I predict that within a few short years that list of essentials is going to have one item on it—your phone.
It seems inevitable to me that as smartphones complete their journey from telephone to go-everywhere, do-everything digital assistant they’ll hoover up the whole lot.
Airlines are already wise to the efficiencies of electronic boarding passes, contactless payments and digital wallets are growing in popularity and even passports are turning into computer chips.
Our phones still have a bit of work to do though before they’re a totally compelling, holiday-friendly alternative to a credit card and a plastic envelope stuffed with Euros.
Paying for something with a simple wave of a smartphone will require pervasive contactless payment infrastructure to be the norm in our favourite holiday destinations. We aren’t there yet but we’re heading in that direction, and fast; MasterCard experienced a 174% year-on-year growth in contactless payments across Europe in the final quarter of 2014.
Anyone who has used a credit or debit card abroad will be familiar with the unique combination of convenience and uncertainty that it brings. Convenience because it’s easier to carry than cash and uncertainty because every transaction is followed by that little voice in the back of your head that says “I wonder how much that really cost me”.
Most of us will probably have to wait until we get home before we find out what exchange rate our bank used that day and what the handling fee was.
This seems like a solvable problem.
At the very least our phones ought to be able to tell us the real price, in our preferred currency, at or even before we pay our bill.
Even better for banks would be to allow us to partition our account into two currencies in advance. We could perform a single, virtual currency transaction at the beginning of our holiday and then instruct our phones or cards to pay from the local currency when we’re charged that amount.
Taking your digital bank on holiday
Along with our cards, currencies and accounts I think there’s room for something else in our smartphones too; I’d like to feel the whole weight of my bank in there too.
Last month I wrote about customer loyalty in the age of digital banking and how easy account switching could (and should) see customers who stay with the same bank rewarded for doing so.
Banks have enormous purchasing power and a long reach—giving us access to those things on our holidays would be a great way to show us how much our custom matters.
If I’m hiring a car or paying for a hotel then my bank could be a negotiating partner with the power to demand high standards and competitive prices.
Banks that provide point-of-sale devices to merchants and contactless smartphone payments to customers will also find themselves on two sides of many transactions. With each party having access to a screen and keyboard the bank will have a means conduct or facilitate rich, multi-lingual communication.
That communication channel could be used to provide all manner of rich interactions from individually focussed special offers to useful contextual advice such as how much to tip.
A welcome fellow traveller
I suspect that at the moment most of us think about holiday banking in terms of minimising the potential downsides. It’s about making sure we avoid excessive credit card charges, get the least onerous exchange rate and don’t get our cards stopped because we forget to tell our banks we would be away.
It doesn’t have to be that way and as smartphones become our one piece of essential travel kit banks have an opportunity to change our thinking.
Organisations that can deliver experiences like ones I’ve outlined in this article could elevate our thinking about holiday banking and make themselves trusted fellow travellers.