Accenture Payment Services

Everyday
Payments
How digital is
revolutionizing
payments in the
Everyday Bank
ecosystem
Meet John and Jenny
John recently graduated from
university, secured his first job and
moved into his own apartment.
Even though he feels a bit
overwhelmed about these life
changing events, he is also very
excited about the future. He is
engaged to Jenny, who lives nearby
in the same town.

John and Jenny have had bank

accounts since they were children
and never regarded their bank as
being central to their daily lives.
But in the era of the Everyday Bank
ecosystem, that is going to change.

The episodes throughout this

paper will illustrate how Everyday
Payments will be key to making
this happen.

Towards Everyday Payments 3

The heart of Everyday Payments:

The digitally-enabled account 4

Becoming an Everyday Payment

Provider: Six hot topics 5

A new mindset towards payments

is key to remaining center stage 10

The journey ahead 11

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Towards Everyday Payments
Accentures vision for Everyday Payments The catalyst for this change is digital
has been created with reference to the payments, with accounts enabled to
Everyday Bank1Accentures point of initiate payments over all digital channels
view on how digital is revolutionizing and becoming the focal points for customer
banking and the customer ecosystem interaction and engagement. In this way,
(figure 1). the Everyday Payment Provider will become
a trusted and indispensable partner central
The banking industry, is at a breakpoint, to customers daily lives and activities. By
with imminent disruption, similar in Everyday Payment Provider, we foresee a
scale to that seen already in other retail mix of next generation players in the
industries e.g. photography (Kodak), video payment domain, such as todays banks
rental (Blockbuster). (and Everyday Banks!), card companies,
Todays banks and payment providers have ACHs, processors, payment gateways,
an opportunity to embrace this disruption acquirers and other possible players such
and become central to customers as telcos and retailers. The Everyday
everyday transactions, in the same way Payment Provider will help fulfill financial
that social media and online retailers have as well as non-financial needs and forge
become central to consumers everyday deep and durable two-way relationships
purchasing decisions. in the process.

FIGURE 1. The Everyday Bank

CONSUMER GOODS

AS ADVICE PROV
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BA R AN
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OR

Renewed Pre-Sale
HO

TA
T IO

Branch Role Engagement

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ENT SERVIC
YM ES
PA
Value
Modern
& EDUCAT IO N

Added
and
ATOR

Personal
HE A LT H & P

Relevant
B A NK A S

Banking
Brand
GRE G

Advisor
ve
ow
Sa

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R OT E

Bo
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pen
AG

d, Tra n sfer,
AC C
CT IO

RM
UE

Engaging
ES

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FO
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Excellence
LIT AS
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Interfaces
AT
O R NK
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L EIS IC A
UR E M UN
COM

EVERYDAY BANK RESEARCH SERIES | 3

The heart of Everyday Payments:
The digitally-enabled account
As Everyday Payments emerge and the
surrounding environment takes shape,
digitally-enabled accounts will become
integrated and core components of the
complete service offering. These accounts
will play a key role in enabling the
Everyday Payment Provider to facilitate
transactions for customers at any time,
over any channel and across the value
chainincluding pre-sale, payment and
post-sale activities.
Figure 2 illustrates the digitally-enabled
accounts central role in the Everyday
Payments ecosystem. On the consumer
side, mobile devicessmartphones, tablets
and soon wearablesare already at the
center of daily interactions and will serve
as remote controls for a wide array of
activities and services, including the full
range of payments from the digitally-
enabled account.
On the provider side, the digitally-enabled
account will be accessible on an omni-
channel basis and will be integrated
with services and partnerships that will
enhance the experience and capabilities
for consumers enabling them to use the
account to transact however they want;
configure and interact in personalized
ways; and take advantage of a range of
incentives and rewards that will encourage
them to use and keep the relationship.
In Accentures view, the move to digitally-
enabled accounts is inevitable and
presents traditional incumbent banks and
payment providers with a stark choice.
Either they digitally enable accounts
for their customers and extend their
reach in the value chain organically or
through partnerships; or they leave their
customers with dumb funding accounts,
which would end up merely feeding the
smart and digitally-enabled accounts
provided by other players in the digital
payments market.

FIGURE 2. The digitally-enabled account

Consumers Everyday Payment Providers

Digital interactions in the Digitally-Enabled Account

day-to-day lives of consumers

Established
and Alternative
Currencies
Configure
Access & Service Retain & Reward & Interact Transact
Mobile Bank Partnerships Personal Finance Immediate Credit
Banking Planning & (Push) E.g. real-time
Tablet Bank Loyalty credit transfer
Online Retailing Management
Education Deferred Credit
Internet Bank Promotions Personalization
Health In-Store Retailing (Advance) E.g. credit
ATM card payment
Media and
Entertainment Transport & Ticketing Immediate Debit
Branch (Pull) E.g. debit card
Retail Person-to-Person payment
Telephone Bank
Travel Person-to-Business Recurring Debit
Web Chat (Subscribe) E.g.
Utilities recurring credit card
Social Media payment
Closed Scheme Debit
(Redeem) E.g. air miles
redemption
[]

4 | EVERYDAY BANK RESEARCH SERIES

Becoming an Everyday Payment Provider:
Six hot topics
The dynamics of the traditional payments
ecosystem are undergoing fundamental
and irreversible change. So, what do
organizationswhether banks or non-
banksneed to do to ensure they succeed
in becoming an Everyday Payment Provider
in the new landscape of digital payments?
In Everyday Banking, successful players
will need to reinvent themselves and offer
a complete customer proposition that
is truly embedded around consumers
daily interactions and underpinned by
a digitally-enabled account. The same
is true in Everyday Paymentsand to
achieve these goals Accenture has
identified six hot topics in the payments
landscape that prospective Everyday
Payment Providers need to focus on for
success in the digital economy.
FIGURE 3. Six hot topics in the digital payments environment for Everyday
Payment Providers
The Digital Economy
Consumers Merchants
Everyday Payment Providers
1 Polymorphic Payments
2 Digital Commerce
3 Immediate Payments
4 Cards Innovation
5 Digital Corporate Payments & Transaction Services
6 Payments Transformation for Digital
Payments are becoming Polymorphic as Underpinning each of these are the core
new payment methods proliferate and the digital technologies revolutionizing the
landscape fragments. Digital Commerce way we live mobile, the umbilical
is driving demand for these new payment chord to everthing digital; social media,
methods and creating the environment for the destination for interactions and
them to flourish. Immediate Payments information; rich data, the glue that
is an important prerequisite for new enables relevant, contextual and
real-time services suitable for the digital informative interactions and connections;
world, providing a superior customer and cloud, allowing ubiquitous and
experience through instantaneous scalable access to digital applications.
payments, 24/7/365. Cards Innovation is
imperative to transition to digital and
migrating cards from physical forms to
mobile devices and the cloud. In the
corporate world, a transition is required
also to migrate to Digital Corporate
Payments and Transaction Services.
Finally, Payments Transformation for
Digital is the next phase of simplification
and replatform programmes already
underway in many banks and payment
providers, so that they can operate and
thrive in the growing, polymorphic world
of digital payments.
SMEs, Government
Corporates
EVERYDAY BANK RESEARCH SERIES | 5

John sets out for the TV store
via the caf
One of the first items John would like
to buy for his new home is a flat-screen
TV. He spent the past couple of weeks
researching online retailers, checking
price comparison websites, asking Jenny
what kind of TV features she would
like and getting advice from friends on
Facebook. Now he has pretty much made
up his mind about the model he wants.
John heads off to the electronics store and
as he leaves his apartment, he receives a
notification on his mobile phone that the
local caf around the corner is running a
breakfast promotion. So he orders ahead
and pays for the meal from his digitally-
enabled account. When John arrives at
the caf, he is automatically checked
in via low-energy bluetooth beacon
technology and simply collects the food
from the fast-track counter. The payment
happens seamlessly and securely in the
background.
6 | EVERYDAY BANK RESEARCH SERIES
OFFE
PAY R
LATER
before arriving to review and An afternoon stroll generates
buy his chosen TV a personalized offer
When John arrives at the electronics That afternoon, Jenny is walking down the
store, he is reminded how busy it can get high-street in the town where she and
on a Saturday afternoon, with customers John live. She is passing the local chemist
queuing up everywhere. He finds the TV store when the geolocation functionality
he wants to buy, uses his mobile app to
in her digital wallet pushes an offer for
perform a real-time price comparison
her favorite brand of toothpaste, giving
against nearby and online stores and
her a choice of a cashback payment or
decides to go ahead with the purchase.
To avoid the queues, he uses his mobile to extra loyalty points. She clicks on the
scan the TVs unique QR code. This gives offer, walks into the store and completes
him a view of the stores remaining stock the entire transaction on her mobile
handset, choosing the option of additional
levels and available delivery slots, and tells
him that his digital account provider loyalty points (which are also stored on
currently offers a pay later option, with her device). Seconds later she walks out
interest free payments over three months. with her toothpaste.
John confirms the purchase and receives a
welcome package with links to online user
manuals for the TV. Simultaneously, an
electronic receipt is saved onto his phone
and stored securely, so he has evidence
of payment readily to hand should he
ever need it in the futurefor example
if the TV proves to be faulty. Separately,
John also receives a text message from
the retailer reminding him about the
delivery time and a text message from his
Everyday Payment Provider proposing a
favorable offer for an extended warranty
on the TV.
1. Polymorphic Payments
As digital payments proliferate, Everyday
Payment Providers give their various
customersindividuals, merchants,
businesses, corporatesthe ability to pay
with alternative and emerging payment
methods, as well as with cards. They
perform digital transactions, no matter
the underlying payment method, currency
or channel used and independently of
2. Digital Commerce
Digital commerce depends on an
ecosystem of connected content and
service providers. This includes Everyday
Payment Providers who leverage their
existing relationships with consumers and
other businesses (including merchants)
and the relevant information they hold
including transaction data, credit scores
and customer preferencesto extend their
reach and enable collaboration across the
purchasing value chain.
What does this
mean for John
and Jenny?
where the value is held. Payments are
John and Jenny have more control
polymorphic. Acceptance is ubiquitous
and choice. When making a payment
and tailored payments processes morph
in-store or online, they gain the
into the integrated customer experience
option to complete the transaction by
that merchants and Everyday Payment
choosing to use value held with their
Providers design for customers needs
Everyday Payment Provider or value
(including the use of embedded Application
held in a closed scheme such as air
Programming InterfacesAPIs).
miles or loyalty programme. John and
Jenny also benefit from a consistent,
familiar and easy-to-use process for
every payment, no matter where, how
or to whom they are making it, or
how small or big it is.
What does this
mean for John
and Jenny?
The traditional boundaries between
John and Jenny can be better
pre-sale, payment and post-sale activities
rewarded for every transaction. For
are becoming increasingly blurred and
example, they can seamlessly take
integrated. This strategy enables Everyday
advantage of offers, discounts or
Payment Providers to deliver an enhanced
redeem loyalty points simply by
customer experience and more value for
transacting using their digitally
their customers through dynamic and
enabled accounts. The interaction
integrated propositions and experiences
itself is simplified by combining
which are tailored to specific situations
the offer redemption, discount or
and needs.
loyalty redemption with the amount
remaining to pay, in one integrated
transaction.
EVERYDAY BANK RESEARCH SERIES | 7
3. Immediate Payments
Digital transactionsand especially
polymorphic paymentsrequire a new
industry capability that provides real-time
account-to-account transfers and
payments between connected Everyday
Payment Providers, banks and partners.
A reliable and efficient immediate funds
transfer mechanism with real-time
information flow, available 24 hours a day
4. Cards Innovation
To enable Everyday Payments, cards
need to be optimized for the digital
environment, with transformed processing
capabilities. Issuers need to address a
number of challenges which range from
dematerialization of plastic cards,
ongoing migration of payments to
digital, sustained hyper-growth rates in
contactless volumes with changes in
customer behavior and diminishing card
revenues due to regulatory pressures.
8 | EVERYDAY BANK RESEARCH SERIES
every day of the year, is a vital building
block for the creation of new, innovative
digital payments methods and to make
modern economies more efficient and
competitive. Immediate payments with
real-time payment finality 24/7/365 and
balance update is also essential to a
compelling end-to-end payments
experience for customers.
For acquirers the implications of the move
to digital are even more profound as they
need to expand from a traditional card
acquirer role to a much broader
polymorphic acquirer role. At the same
time they need to address the rapid
growth of e-commerce and m-commerce,
the convergence of online and in-store
payment methods and the emerging
demand for differentiated acquiring
services and value added services.
What does this
mean for John
and Jenny?
John and Jenny can send and receive
payments in real-time from their
bank accounts at any time of the day
and no longer experience any delay
in seeing the status of the payment.
Jenny has left filing her tax return
until the last minute, but thankfully
is able to do so late in the evening
through her governments 24/7 tax
website and is able to pay the tax
due before the midnight deadline.
She can see on the website her tax
office has acknowledged in real-
time receipt of both the tax return
and tax payment. John meanwhile
is reminded tomorrow is his younger
sisters birthday. He sits next to Jenny
doing her tax and together they
film a short selfie wishing Happy
Birthday. Opening his mobile banking
app, John sends his sister $25 to her
mobile phone number, attaching the
greeting video to the gift payment.
What does this
mean for John 1234 5678 9012 3456
John
and Jenny?
John and Jenny rarely see their plastic
cards anymore as they have become
embedded and hidden in digital
wallets or integrated in their mobile
phones.
For example, John and Jenny can now
make card payments online, in mobile
apps or in-store (contactless) without
having to carry around pieces of
plastic in their pockets.
5. Digital Corporate Payments
and Transaction Services
Everyday Payments will also transform
corporate payments and transaction
services and Everyday Payment Providers
will leverage digital to improve customer
engagement, increase cross-selling and
expand their range of offerings to include
full value-based managed services. This
includes adoption of mobile devices to
6. Payments Transformation
for Digital
Everyday Payment Providers will update
and refine their payment transaction
engines to meet digital challenges and
customer expectations. Consolidated
payment platforms running multiple
payment types will become the engines
for polymorphic payments, processing
growing transaction volumes across a
range of digital channels from digitally
enabled accounts and supporting real-
time transactions and information flows,
24/7/365.
allow treasurers and financial controllers
to view transaction information and
authorize payments remotely from their
offices; and it includes using digital to
enable seamless links between physical
and financial supply chains, for example
across shipping, trade finance and
international payments.
In particular, Everyday Payment Providers
will need to expose their payment engines
through APIs to the outside world, so that
merchants and other service providers can
embed them in their applications. This
transformation will lay the foundation for
a strategic capability that is agile, flexible,
resilient and scalable enough to underpin
new, differentiated and enhanced
customer-centric payments propositions
suited to the digital world.
What does this
mean for John
ACCOUNT
BALANCE:
$46.23
CONFIRM
PURCHASE
and Jenny?
Thanks to payment APIs, John and
Jenny can control their digitally
enabled accounts directly within
retailer apps. This includes seeing
their account balances before they
confirm a purchase, selecting the
account and sending payment directly
to the retailer. They notice that the
checkout experience is a delight
quick, easy and integral to the rest of
the retailer app.
EVERYDAY BANK RESEARCH SERIES | 9
A new mindset towards payments is key
to remaining center stage
So what does this mean for todays banks,
payments processors, card issuers and
acquirers?
A clear top-line message is that
payments can regain center stage for
customers of all types, as payments
processes capture increasing amounts of
information about the customer and act
as the vital touch-point enabling banks
and payment providers to engage their
customers in ongoing conversations.
These two capabilities open up a host
of opportunities in areas such as cross-
selling, relationship-building and the
provision of targeted and personalized
advice and service.
It is equally clear that the focus of
differentiation in the emerging digital
payments environment will be across
the end-to-end customer experience of
the transaction process, not in individual
stages. Engagement with customers
through experiences that delight is critical
to mass adoption of digital payments.
To achieve this type of differentiation,
the customer interaction will need to be
seamless, friction-free and tailored to
specific contexts, with complexities such
as security embedded and hidden.
Customer interactions will also need to
be easy and consistent irrespective of
payment or currency typea need that
calls for polymorphic payments. And the
entire experience will need to harness
the transaction itself as the enabler to
something bigger, such as a ride on a bus,
the download and use of the latest app, or
the purchase of a long-desired item.
All of this means that current banks and
payment providers will need to think in
new ways. This new mindset will require
an acceptance of the need to share
information, offer interoperable solutions
and make pricing transparent.
It will also involve identifying and
exploiting new ways of making money,
by providing ecosystem partnersand
10 | EVERYDAY BANK RESEARCH SERIES
thereby individuals, merchants and
enterpriseswith a widening array
of value added services to proliferate
CHECK
payment functions wherever merchants CONFIRM
PAYMENT
and consumers require them. CHECK
Everyday Payment Providers will need to
achieve all this against a background of
intensifying competitionfor example Out for the evening
as immediate payments compete with
cardsand declining payment fees Later in the evening, John and Jenny
as regulatory actions bite. Therefore, are having dinner with friends. The
operational efficiency is also a critical restaurant offers the ability to pay
factor, leading some players to evaluate at the table and Jenny opens her
utility plays. Indeed, the optimal new mobile app, scans the restaurant bill
capability model may be utility-driven at and confirms the payment for the
its core, with specific capabilities acquired whole amount. Their friends then
and accessed from complementary partners. settle their shares of the bill directly
with Jenny by pinging money from
As various players seek to seize leadership their digitally enabled accounts to
positions in the race to become Everyday Jennys mobile phone number. Seconds
Payment Providers, it is clear that a later, Jenny has received the funds
one-size fits-all strategy will not apply. and can see them in her account.
Instead, the approach will vary depending
on each contenders existing strengths Tired, after a long day, John and
and positioning. But in Accentures view, Jenny take the bus home. In an
the winners will be those participants Everyday Payments world, they never
who focus rigorously on the key themes need to buy physical tickets anymore.
and priorities that we have identified in Instead they simply tap their mobile
this paper. phones against the contactless reader
on the bus. The system automatically
To succeed, are you ready to operate in a calculates the cheapest fare and
fragmented, polymorphic landscape? Are stores a virtual ticket in their
you focused on customer engagement digital wallets.
to provide relevant payment services in
digital commerce? Are you exploiting real-
time capabilities? Are you innovating your
cards capabilities to operate digitally? Are
you focused on corporate customers and
meeting their transaction banking needs
with digital payment propositions? Are
your payment platforms fit for the digital
age and are you ready to expose them
through APIs to your customers?
These questions are critical. Get them
right and you are positioned to provide
the next generation of payment services
at scale and mass adoption of digital
payments is the key to success for the
winners in Everyday Payments.
The journey ahead
Accenture can help banks and other
market participants navigate the
complex journey toward differentiation
and leadership in Everyday Payments,
thanks to our strong set of skills, assets
and capabilities honed through our own
transformation to digital.
At Accenture, we are continuously
developing our own ecosystem of digital
assets, accelerators, strategies and
capabilities to help banks and payment
providers become leaders in digital
payments. To support and accelerate our
clients progress along their Everyday
Payments journey, we leverage our
expertise in strategy, systems integration,
mobility, analytics, interactivity, delivery
centers and Expertise as a Service.
EVERYDAY BANK RESEARCH SERIES | 11
Contact us
Accenture can equip your organization with the tools and insights
you will need to win in Everyday Payments, please contact:
Massimo Proverbio
Accenture Payment Services
Global Lead
massimo.proverbio@accenture.com
Jeremy Light
Accenture Payment Services
Europe, Latin America & Asia Pacific Lead
jeremy.light@accenture.com
NOTE
1
For more details, please visit:
www.accenture.com/everydaybank
Copyright 2015 Accenture
All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.
Alex Secchi
Accenture Everyday Bank
alessandro.g.secchi@accenture.com
ABOUT ACCENTURE
PAYMENT SERVICES
Accenture Payment Services helps banks
improve business strategy, technology and
operational efficiency in three key areas:
core payments, card payments and digital
payments. This includes a focus on
transaction banking and on compliance,
risk and operations. Accenture can help
banks simplify and integrate their payments
systems and operations to reduce costs
and improve productivity, meet new
regulatory requirements, enable new
mobile and digital offerings, and maintain
payments as a revenue generator. Its
home page is www.accenture.com/
paymentservices
VISIT US AT
www.accenture.com/everydaybank
FOLLOW US ON TWITTER
@BankingInsights
ABOUT ACCENTURE
Accenture is a global management
consulting, technology services and
outsourcing company, with more than
336,000 people serving clients in more
than 120 countries. Combining
unparalleled experience, comprehensive
capabilities across all industries and
business functions, and extensive research
on the worlds most successful companies,
Accenture collaborates with clients to
help them become high-performance
businesses and governments. The
company generated net revenues of
US$30.0 billion for the fiscal year ended
Aug. 31, 2014. Its home page is
www.accenture.com.
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