Barclays sets eyes on U.S. mobile payments market
Signaling serious interest in the U.S. mobile payments market, banking and credit card giant Barclays has named a respected telecoms heavyweight to lead a local operation with a staff of 165 at launch.
Dekkers Davidson, a veteran of Oliver Wyman, Fidelity Ventures, Rogers Cantel, Sprint PCS and AT&T, has assumed his post as head of U.S. mobile business at Barclaycard U.S. Based in Wilmington, DE, the executive’s mandate, while more focused on mobile payments than banking, is clear.
“We’re looking to make the plastic credit card a four-way device: consumers with merchants and merchants with consumers, who want personalized treatment,” Mr. Davidson said.
“Part of our strategy is to look at mobile as another way for distribution,” he said. “Our focus will be more on mobile payments and transfers, less so on mobile banking.”
Mr. Davidson is charged with identifying the potential for Barclaycard to enter and solidify its presence in the United States via the appropriate strategy, partnerships and technology for mobile banking, payments and commerce.
The executive will also leverage Barclaycard’s overseas expertise in mobile banking and contactless payments.
In his new capacity, Mr. Davidson will report directly to Amer Sajed, CEO of Barclaycard U.S., which is the local payments business of the British banking firm.
The hire comes only four months after Barclaycard and Orange launched the first contactless mobile phone payment service in Britain. Samsung is also part of the initiative.
According to the company, there are more than 11 million contactless-enabled Barclayscards and Barclays debit cards designed to both cut lines at retail locations and the cost of credit and debit card transactions.
Barclays and Barclaycard together have 56,000 contactless terminals in Britain that accept payment for retailers including EAT, Prêt A Manger and, Subway.
Indeed, Barclays’ Absa subsidiary was the first bank in South Africa to launch mobile banking, letting customers conduct banking transactions such as payments, account transfers and balance checks without being tethered to their computer or visiting a local branch.
The goal is to replicate the experience in the U.S.
Experience in the pocket
Mr. Davidson was hired away from management consultancy Oliver Wyman, where he was practice leader for the North American telecoms sector and worked with leading carriers and smartphone makers in North America and Europe.
In the past two years, Mr. Davidson also advised the ISIS consortium comprising carriers and other industry players keen on making mobile payments a reality.
Before Oliver Wyman, Mr. Davidson spent time as a venture partner at Fidelity Ventures focusing on mobile commerce and payments. He was also CEO of data networking startup Cetacean Networks, president of the Ontario region for Canadian carrier Rogers Cantel Inc. and New England area vice president for Sprint PCS.
Mr. Davidson got his start at AT&T. As he moved up the ranks and through companies, he also found time to acquire a Harvard MBA.
It is this deep trench of experience that brought Mr. Davidson’s attention to Barclayscard as it gets more aggressive in the world’s largest economy.
Barclayscard has co-branded credit card programs with 40 organizations, including U.S. Airways, Frontier Airlines, L.L. Bean, Priceline, Travelocity, BJ’s Wholesale Club, Barnes & Noble and the National Football League.
Mobile payments will enable contactless payments at retail and redemption of offers at point of sale, as well as conduct ecommerce and mobile commerce transactions.
The promise of riches with mobile payments and banking has attracted a slew of services including those from ISIS, wireless carriers, PayPal, Visa, MasterCard and consortia of banks.
The latest to enter the market is Google with its Google Wallet, although there the idea for the search giant is to sell advertising against data and traffic.
To Barclayscard, the key is frictionless payments and the journey to price personalization.
“Mobile payments and mobile commerce will allow retailers and merchants to move down the personalization road,” Mr. Davidson said.
“Right now, we have a situation in North America and Europe where it’s very fragmented,” he said. “They’re working on local trials for the U.S. market.
“Yet the market has not ignited. This year and next year the market is going to ignite. We’re going to see three to four winners emerge in the next two years.”
However, to be on that short list will require the adoption of three stances, Mr. Davidson said.
First is security. Consumers must get the sense that a mobile payments transaction via that brand is safe and secure.
Next is innovation and getting the message out that the bank or financial institution is on the cutting edge.
Finally is the reputation for frictionless customer service.
“We have the benefit of knowing what works well in the U.K. with Orange and Samsung,” Mr. Davidson said.
“Mobile is all about making payments simpler,” he said, “and mobile is one of the top three priorities for this institution in the next five years.”