May 30, 2017
Allison Beer is the Managing Director, Global Head of Digital Payment Strategy & Partnerships at JPMorgan Chase & Co. Allison has seen the latest FinTech wave from the early days when she was at American Express, working on what we know now as mobile payments. This has given Allison a front row seat to collaborative, partnership-driven innovation in financial services. We were very honored to speak with Allison to get her thoughts on mobile payments over the years and her view today at JPMorgan Chase. We hope you enjoy the conversation.
Please note, this interview has been edited for clarity and brevity.
Patrick Rivenbark: Allison, thanks again for taking the time to speak with LTP. I want to start with a little history. Before your payments work at Chase, you were part of pioneering work in mobile wallets and payments at American Express. How do you remember that time?
Allison Beer: Sure. This is way before Apple Pay, Samsung Pay, or Android Pay. I first became heavily involved with mobile wallets and digital wallets several years ago when the carriers stepped in and worked to create a joint venture to establish an interoperable wallet for mobile payments. I had a lot of interaction with the stakeholders in the industry as we worked to set up the infrastructure for what would become the mobile payments industry today.
PR: Can you expand on who exactly you were working with and why you were doing it? A lot of this work is taken for granted now. What were you thinking about, what were the problems, you had to solve?
AB: At that time, it was unclear whether the technology was going to be NFC or some other technology to communicate the payment. We were focused on what would the carrier interactions be, because the carriers had gone out of the gate with a pretty clear point of view on mobile payments. Banks wanted to have a seat at the table, and be totally involved with what is now called Softcard, but also explore what other partnerships they could create to ensure that there were viable customer options.
PR: Other than the literal payment, there are a lot of ancillary concerns of risk, security, identity that are still felt trying to be solved today. How did you approach this? What else did you think about?
AB: That was the most interesting piece. How do we make this more secure? A lot of the industry’s early work was evaluating ways mobile payments could be more secure. I think that is probably the frontier that’s most interesting about digital payments even today. When we started, tokenization was just a theoretical concept. Now, tokenization is happening at increasing scale.
My philosophy was that this new technology should enhance the payment ecosystem so customers get enhanced servicing, an enhanced experience because it's more secure. It should be more seamless. At the outset, we learned all of the information the carrier had at their disposal – customer data and the customer’s tenure with the carrier. That information could be helpful when the customer is using the device to pay. We undertook years of work to understand what device and carrier information could augment the risk information any financial institution had to assess for an enhanced servicing experience for the customer.
PR: What have you seen evolve over the last several years that’s enabling that enhanced experience?
AB: I think mobile payments are at least as secure, or more secure, as other payment methods; our focus has been on enhancing the security of these platforms over time. Chase has an absolute commitment to ensuring the security of the payments on the platform.
The real frontier of innovation will come as companies focus on enhancing that security. There’s so much new innovation in terms of authentication, whether its fingerprints, or iris, or voice recognition, or IOT enhancements, or enhanced use of location. There are just a number of features that are constantly emerging to make mobile payments and digital payments much more secure. They need careful analysis but there is significant promise.
PR: How do you balance security and regulation with the customer experience?
AB: I don't see those things as mutually exclusive. In fact, I think they are essential components. When it comes to people's money, we want to make sure it’s secure. And customers aren’t going to take the risk with a new payment platform if they don't believe it is secure. We certainly aren’t going to promote solutions to our customers if we have any security concerns.
That said, having enhanced security means there may be fewer layers necessary to complete a payment. It may make the customer experience more seamless. That's really what customers are looking for with new payment methods. They are looking for convenience, they are looking for security, and they are looking for enhanced value including the ability to manage their physical wallet in a digital way.
PR: Part of the benefit of having this transaction data is you get a lot of information data about their habits, what they’re doing. How do you approach using that data a thoughtful way of enhancing the broader customer experience?
AB: Personalization is key. This is something that we have been really focused; how do we make sure we are removing friction for customers. Personalization helps us enhance the services that we provide for end-users and make sure that we’re customizing their experiences in a way that that will help them to engage on our platforms and with our brand.
PR: Can you give either a specific example that you’ve already done or that you’re working on, that highlights that?
AB: No two users are going to log into our platform to see the exact same thing. We try to customize our offerings for the end-user based on their preferences. That’s the fundamental of personalization. We try to have a broad offering of digital solutions for our customers so that they can interact with Chase in the ways that work best for them.
We have the industry-leading mobile banking app, we have enhanced services on Chase.com and we offer a lot of functionality and services through third party digital wallets like Apple Pay, Samsung Pay, or Android Pay. We want customers to pick the offering that works best for them, in the ecosystem with which they choose to transact, and we work to personalize that based on the information we have.
PR: We’re in an age of partnerships but FinTechs are also supposed to be, eventually, coming after banks like Chase. What is it that Chase has that is hard to replicate no matter how good your technology is?
AB: It's exciting that there are so many emerging FinTech companies. We also have a long history of innovation, and we’ve been working with FinTech companies for decades. That said, our strategy is not either/or. There have been several partnerships that Chase has announced in the marketplace. Where it makes sense to partner, Chase partners.
PR: As digital banking transformation continues, what is changing at Chase to increase that iteration time? Particularly since Chase has a lot of legacy technology and existing customers?
AB: In many ways, Chase does not feel like an established bank as much as it feels like a highly sophisticated technology company with the security of a financial company. There’s a real commitment to digital transformation within Chase and to leading in digital customer service. The case for digital is clear. When a customer uses one of our digital channels, we are seeing 20% higher net promoter score, higher retention rates, and higher spending. Plus, we simultaneously lower costs of service and, frankly, customers are happier; it’s a win-win. That’s a great case for investment.
PR: What is most misunderstand or not appreciated about payments?
AB: Payments are incredibly complex. There are many different players in the ecosystem. There have been some really great insights from FinTech partners, some of whom Chase has been really proud to partner with, but there are layers of regulation and customer expectations that a lot of emerging companies don’t appreciate. Customers expect 24-hour, 7-days-a-week servicing. They also expect that things work every day, all day long and that there is ubiquity in the ability to transact on whatever platform exists. It’s that always-on customer servicing that tends to trip new companies up.
PR: What surprises you the most in this payment space over the last 5-7 years?
AB: The pace of change is slower than we first expected. If I reflect back to 2010 and consider what we what felt would happen in seven years, things have rolled out more slowly. The market may also be less fragmented than we thought it would be.
PR: Do you have a thought on why that is? Or do you just think that is just how it goes?
AB: Payments are complex. As I have said, innovation in this space is hard in part because there are so many players in the ecosystem that have very different needs. As a result, it takes a while for solutions to rise to the top.
PR: Do you have any thoughts on what that value could look like going forward?
AB: Until mobile payment acceptance reaches a critical mass and customers can use mobile payments at every merchant where they shop on a frequent basis, you can’t leave your wallet behind. At the end of the day, if you’re fishing out your phone today you get a very similar experience to fishing out your wallet. There has to be a reason to use your phone over your wallet. First, acceptance must be addressed. Second, the value prop of digital payments needs to be enhanced. There are some emerging trends. I’m excited to see how the industry plays out.
PR: Last question. What’s a pretty significant thing you’ve changed your mind about in the last couple of years?
AB: That’s a really good one. I was a late adopter of a wearable, and ever since I’ve got one, I'm completely obsessed. The thing that I love the most is that it tells me when my next meeting is, so I am late less, and I love it for payment because my phone is often stuffed in a purse. I have a new favorite card – the Sapphire Reserve card – and I consolidate all of my spending on it. I use my watch for pretty much every purchase. I love it, and I love that I can tap and pay and get out of there.
PR: That's a good use case to highlight the customer diversity in FinTech. Taking my phone out of my pocket versus using a watch isn’t as compelling to me. I take the convenience of my pockets for granted! That’s a good way to end it. Thank you so much for the time.
AB: This has been great. Thank you!