Abstract
Technological innovation, recent regulatory initiatives and mass consumers’ changing expectations are quickly re-shaping the payments’ sector, paving the way to a more open environment where even non-banking players see a huge opportunity to gain momentum and disrupt the incumbents, namely the financial institutions. Fintech startups, high-tech firms but also mobile network operators are indeed challenging the status quo with their innovative propositions, trying to disintermediate banks from their traditional function of payment service providers. In the payments market, mobile wallets represent one of the innovations with highest potential of growth in the consumer-to-business segment. Payment market is a large and profitable segment for retail banking. Besides revenue streams from card payment transactions, new sources of revenueas and value creation have been unleashed by digital payments. This paper contributes to provide a better understanding of the mobile wallet ecosystem, also analyzing a set of four business cases so to identify potential sources of competitive advantage for retail banks in a market characterized by an increased non-bank competition. Mobile wallet platforms can be a powerful tool for banks to cope with the customer-centric approach. The structure of the paper analyse the recent trends in the financial services industry, involving the entry of new players (Fintech); the evolution of payments in the market; the concept of ecosystem applied to the new payment landscape; and it outlines the banks’ roles in the new mobile payment environment.
Highlights
A number of factors, including technological innovation, changing regulatory framework and consumers‟ expectations as well as increasing competition, have been deeply affecting the financial services industry in the recent years
This paper contributes to provide a better understanding of the mobile wallet ecosystem, analyzing a set of four business cases so to identify potential sources of competitive advantage for retail banks in a market characterized by an increased non-bank competition
The structure of the paper analyse the recent trends in the financial services industry, involving the entry of new players (Fintech); the evolution of payments in the market; the concept of ecosystem applied to the new payment landscape; and it outlines the banks‟ roles in the new mobile payment environment
Summary
A number of factors, including technological innovation, changing regulatory framework and consumers‟ expectations as well as increasing competition, have been deeply affecting the financial services industry in the recent years In this fast-paced environment, financial institutions have seen their market leadership in many of their core businesses under attack from newcomers. The payment market has characterized by the rapid proliferation and widespread adoption of innovations This fall into a number of avenues of change – from streamlining payments or integrating billing, to mobile payments, security developments, or cryptocurrencies and peer-to-peer transfers. The actions that retail banks can undertake from a strategic perspective to maintain their leadership in the payment industry and take advantage of new opportunities for value creation In this part, the objective is to analyze a range of different strategic options to enable banks entering the mobile wallet market successfully. In paragraph 7, main conclusions and managerial implications are outlined for banks undertaking the mobile wallet business
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