Research from Mercator Advisory Group titled From Card-on-File to On-Demand Payments: New Payment Model and Strategies For Payment Providers identifies how card-on-file solutions have been given a new lease on life and are now the primary consumer method for making payments via mobile devices. The report describes several examples of third-party solutions in this model that enable consumers to better control and manage their payments. Examples are also given that show how card issuers have responded to on-demand payments in a tactical way but have so far failed to grasp the strategic implications of this model.
“Sometimes changes in technology and consumer adoption occur so slowly that both the nature of the change and the magnitude of the change are misjudged.” said Tim Sloane, VP, Payments Innovation, and author of report. “On-demand payments may appear to be a simple extension to traditional card-on-file solutions, but nothing could be further from the truth. On-demand payments are a significant shift in the way that consumers prefer to shop and buy and the way that merchants push the payment process into the background. With the issuer’s brand almost invisible at the point of purchase, issuers need to identify new strategies to remain relevant to consumers.”
This report is 21 pages long and contains 7 exhibits.
Companies mentioned in this report include: Airbnb, Amazon, American Express, Apple, Betterment, Braintree, Capital One, Facebook, Final, Google, IBM, Lyft, MasterCard, Mint, Netflix, PayPal, Personal Capital, Snapchat, Spotify, Square, Stripe, Trim, Twitter, Uber, Visa, and Wealthfront.