Experiential payments

The opportunity
Experiential payments can be a bridge, welcoming new customer segments that may be overlooked in your existing retail journey.

Use case
Starbucks understood that teens are its rising customers, but cash isn’t their common currency. Payments through the Starbucks app eased this barrier, giving teens a sense of autonomy in their purchases while allowing parents to maintain oversight. Parents can easily load a virtual gift card, accessible through the Starbucks app, and instant payments at the register speed the process of selecting, ordering, and paying. In addition to nurturing a new customer base, Starbucks encourages these teens to become core customers, showering them with loyalty stars, offering timely deals, and enabling order-ahead functionality.

The future
We imagine retail brands that breathe life into overlooked customer groups through digital wallets and virtual gift cards. A single app that holds your membership card, debit card, and ID for members-only retailers like Costco. Perks for reloading virtual gift cards and buying through the app at casual restaurants like Chipotle. And even retail bank services that focus on under-represented communities with streamlined embedded banking, embedded lending, and investment products.

The opportunity
While digital currencies are on the rise, they still exist on the fringe because we have not yet adopted a simple physical payment method. Digital wallets like Coinbase and Apple Pay are paving the way with smartphone users but are missing out on customers who need the ritual of a physical object to symbolize payments.

Use case
There’s already a range of physical objects that serve as long-term or short-term digital wallets beyond the smartphone. Disney pioneered the idea with its MagicBands, which are connected to customer credit cards and IDs. Carnival’s Princess Cruise Lines sells bracelets and necklaces to hold its Medallions, enabling tap-to-purchase while on board, opening cabin doors, and offering personalized experiences. Connect&Go has even pushed the form factor into single-use paper bands for music festivals and conferences.

The future
We envision greater momentum toward physical/digital wallets as customer expectation continues to shift to buying as an experience. A physical object that represents the idea of currency makes it easier for customers to move from selection to payment and combines the “in-the-moment” excitement of the physical retail experience with the efficiency of e-commerce.

The opportunity
Moving beyond integrated payments, embedded payments remove the purchasing step, making the transaction a seamless, streamlined part of the overall process. Instead of fragmenting the buying experience, embedded payments can keep customers within the emotional journey of a brand.

Use case
Owning a Tesla is a well-crafted, luxury experience. And with the addition of an embedded wallet, the seamless experience extends into effortless payments. Through the Tesla app, any retail experience made within the vehicle also becomes faster and sleeker. Driving through a car wash, pulling through a to-go window, using a parking garage, driving on toll highways—all become moments of instant payment that save the driver time, hassle, and effort. Eventually, embedded payments could be expanded to an autonomous vehicle that drives itself to a repair shop and handles scheduling, communication, and billing.

The future
We imagine smart cities with a fully on-demand transportation ecosystem: tap-to-pay trains, autonomous shared vehicles with embedded wallets, reliable electric bikes, and easy-to-rent scooters. Embedded payments unlock the complexity of moving people where they need to go.