It is with great joy that I read Chris Skinners’ PFM is already out-of-date … we need PFM squared which talks about the value created when Personal Financial Management meets payments. This is the beginning of the connected experience for banking, joining the dots in the value chain to create a simple service by making the network disappear, leaving only the value. The original iPod is the classic connected experience example, connecting the music publishers with the act of listening any place any time. Orchestrating many stakeholders to deliver such simplicity is hard work, but the resulting experience can be revolutionary.
Some predict that NFC mobile payments will wither and die because it creates little if any value for the consumer. Of course they’re right, replacing a swipe with a tap has no real value – if it did then we’d all be using contactless cards by now. Then again that tap is just a feature of NFC, the real value is in the fact that I’m tapping my smartphone and that means that I could be connected to my money every time I pay. Like a card payment, NFC gives the consumer a simple way to pay using the phone – keeping the act of paying as easy as today while opening a door to new value. The question then is not about how I pay but what value can be delivered when I pay?
Many believe that loyalty and vouchers will be the ‘killer’ app for mobile payments but I’ve seen little evidence of this and remain unconvinced. After all is the consumer really crying out for a better voucher experience? Like contactless cards, I don’t believe it’s enough on its own to change how we pay. What we really need is a new way of managing our money – the digital equivalent of cash and a wallet.
Today’s Personal Finance Management is getting smarter but it needs to be part of every day life, it needs to help me manage my spending at every payment. Just making PFM mobile isn’t enough because money management needs to be connected to spending. It needs to be there, in the background, all the time. The real magic comes when smarter PFM is embedded into every day life through mobile payments. Then every payment will keep me informed about how much I’ve spent and how much I’ve got left to spend. I won’t have to check if I’m spending too much, I’ll already know. Then I truly become connected to my money and in control of my spending. Then it’s just me and my money.