Could Mobile Payments Get a Boost from Lowly Stickers?

By Jim Bruene Posted on
Categories: Contactless payments, Credit/Debit Cards, Mobile Banking, Mobile Payments

image Even though I have credit cards from Citibank, Wells Fargo, U.S. Bank, American Express and Chase, I have never been offered the opportunity to add contactless payment capability to my card, so I still have no firsthand experience of that particular wave of the future. 

And it hasn’t been too high on my list of things to try, since it still requires carrying a piece of plastic or an additional device such as keychain fob (inset). I don’t see much benefit to tapping a piece of plastic compared to swiping it.

However, I do look forward to NFC-enabled mobile phones. But given the hurdles for adoption among carriers, payment processors, and issuing banks, I wasn’t expecting that much before the next summer Olympics.

But now an interim workaround is being tested around the world: the contactless payment sticker. It’s a quarter-sized sticker you plop on the back of your mobile phone making it instantly payment-enabled.

That allows consumers to leave their wallets at home, a nice benefit for outdoor enthusiasts, club goers, or anyone who doesn’t want to worry about losing their wallet while on the go. Of course, we’ll need a few million more contactless-enabled merchants before the wallet-free world is realistic for most, but widespread use of stickers could move that along (see note 1).

Who has it?
There are several rollouts under way around the world. For example:

USA Technologies Pay Dot contactless payment sticker

Note:
1. There are about 110,000 PayPass merchants worldwide, less than 1% of the 25 million locations that accept regular MasterCard cards. 

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First Sales Report on an iPhone Finance App: Tipulator Downloaded 3,200 Times

By Jim Bruene Posted on
Categories: Apple, iPhone, Personal Financial Management

imageAccording to TechCrunch, the $0.99 tip calculator app from TapTapTap has been downloaded 3,200 times in the month it’s been available. Net income to the developer, after Apple takes its 30% cut, is $2,200.

TapTapTap also markets a much more sophisticated location-based search tool that has generated $50,000 in revenues for the developer.

Tipulator is ranked number 20 in our Aug. 5 rundown of the top-20 banking and finance apps. Today it ranked number 27.

Apple ranks the most popular apps within each category, but does not provide download totals. Tipulator numbers were provided by developer.

What it means
1. iPhone users, so far, are willing to pay for apps. Who would have thought that more than 3,000 people would go to the trouble to download an app to help them multiply their bill times 15% to 20%? And there are two tip calculators that ranked higher in the App Store.

2. There is real demand for mobile financial tools, even very simple ones. Financial institutions should consider launching a branded calculator app in the Apple App Store.

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Lending Club Adds Secondary Market to Updated S1

By Jim Bruene Posted on
Categories: Lending Club, Loans & Credit, P2P Lending

image Lending Club filed an amended S1 statement, a positive sign that it is moving through the registration process in a timely fashion.

As we noted here after reading the original S1, Lending Club has indeed added a secondary marketing piece to its business plan. Holders of its notes (aka individual lenders), will be able to sell their Lending Club loans through a market run by an undisclosed third party.

Here's the pertinent section from pp. 50-51 of the August 1 S1 (note: the name of the partnering broker-dealer is not disclosed; hence, the blank space below):

Trading System
Lender members may not transfer their Notes except through the resale trading system operated by           , a registered broker-dealer. This trading system is an Internet-based trading system on which Lending Club lender members who establish a brokerage relationship with the registered broker-dealer operating the trading system may offer their Notes for sale. In this section, we refer to lender members who have established such brokerage relationships as “subscribers.”

Subscribers may post orders to sell their Notes on the trading system at prices established by the subscriber. Other subscribers will have the opportunity to view these prices, along with historical information from the original loan posting for the member loan corresponding to the Note, an updated credit score range of the borrower member and the payment history for the Note.

I skimmed the updated S1 and didn't see anything else particularly noteworthy. Another blogger, Doughroller.net, noted that the company is adding more credit factors to its loan-pricing model. You can see the new formulas in the S1 filing (pp. 36-38).

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Reward Checking Account Results: $5.5 billion Down, $2.994 Trillion to Go

By Jim Bruene Posted on
Categories: BancVue, Deposits, Checking, Savings, CDs, Metrics & Market Research

Reward Checking banner at First State Bank (13 Aug 2008) In the year or so that they’ve been widely available, so-called reward checking, those high-yielding accounts that require a hefty number of debit card transactions (see note 1), have attracted quite a following.

image But besides the number of blog posts and press mentions, we’ve had few other metrics upon which to gauge their success. Until now. In an email to me yesterday, the company behind many of the accounts, BancVue, laid out the total rewards checking results across its client base:

  • 381 financial institutions live
  • 610,000 reward checking accounts
  • $5.5 billion on deposit in the accounts
  • $9,000 average balance
  • Opening more than 13,000 accounts per week (700,000 annual run rate)
  • Average of more than $14 million in deposits per financial institution
  • Average of 1,600 accounts per financial institution

Although $5 billion isn’t even the rounding error across the entire $3-trillion U.S. retail deposit market, it’s real money to the smaller banks and credit unions offering the program.  

Notes:
1. Most accounts require 10 to 12 debit transactions per month in order to earn the high yield. For more info, see our previous coverage and Finovate Startup video here.
2. Upper-right graphic comes courtesy of First State Bank, Gainesville, TX.

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Intersections Inc.’s Identity Guard Brings Back 6-Month Free Trial and Adds Free Credit Report and Score

By Jim Bruene Posted on
Categories: Advertising & Promotion, Credit Reports & ID Theft Protection, Intersections

imageIdentity Guard, the direct-to-consumer credit-monitoring brand from Intersections, has a new logo, homepage design, and a compelling new offer: six months of free credit monitoring (Good Start option) PLUS 30 days of access to your credit report and score (see previous look here).

And unlike most offers in this industry, this freebie is made with no obligation. Intersections does take billing info as part of the sign-up process, but unlike most others, they will not automatically begin charging a monthly fee at the end of the six-month free trial (see note 1). Last year, Intersections offered the six-month free trial (post here), but did not include the free credit report/score (see note 2). 

Identity Guard hompage (11 August 2008)

Identity Guard homepage (11 Aug 2008)

Separately, I ran across the company’s banner ad today at Amazon’s IMDB site (below). Here, the company is taking a more traditional approach, offering a 30-day free trial plus $3/mo discount on its flagship Total Protection service (regularly $17.99/mo). 

Identity Guard banner at IMDB (12 August 2008)

Identity Guard banner on IMDB (12 Aug 2008)

Landing page from the IMDB banner (12 Aug 2008)

Identity Guard landing page from IMDB banner (12 Aug 2008)

Notes:
1. I tested the free offer last year and can confirm that they did NOT bill me for the service after it expired, nor did they pester me to become a paying customer at the end of the trial.

2. See our Online Banking Report on Credit Monitoring Services for more information.

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Wesabe Adds Twitter Integration for Account Updates

By Jim Bruene Posted on
Categories: Personal Financial Management, Twitter, Wesabe

imageWesabe’s latest feature, the ability to update your account via Twitter, isn’t likely to find too many users in the short-term. However, it’s a great marketing move that could see a fair amount of uptake over time (see note 1).

Although there are less than 2 million Twitter users, the company is currently white hot, one of the most talked about Internet companies (see Google trends below, which shows Twitter search volume is 7x or 8x that of “phishing“). So why not draft off Twitter’s hype, as long as it’s not too costly?

How it works
After logging in to Wesabe and providing your Twitter name, you then simply send a private or public message (aka Tweets) to Wesabe’s Twitter account. Wesabe then adds the expense to your cash-tracking account. You can include merchant name, expense categories, and descriptions to the transaction (see examples below).

Most common: Update via private message (no one else will see)

Private Twitter message to Wesabe


Less likely: Update via public message (your friends will receive it, and if you have an open feed, anyone could see it)

Public Twitter message to Wesabe

 

Google Trends for Twitter vs. phishing (9 Aug 2008)

image

Note:
1. Updating accounts via text message and email has much wider appeal. It’s one of the recommended items in our personal finance feature set. See our Online Banking Report on Personal Finance Features for more info.

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Online Financial Services Scorecard: May 2008

By Jim Bruene Posted on
Categories: Compete, Metrics & Market Research

compete_may08.png

May continued to show increases in both deposit and home-loan shoppers while demand for credit cards edged downward. On a year-over-year basis, almost all segments are down with the exception of home equity and home purchase.

  • Credit card shopping was down slightly (-1%) compared to April and down 7% in applicants. Conversion also declined 2% over the previous month.
  • Compared to April, deposits had big gains in both checking and savings shopping, up 8% and 5% respectively. 
  • Both savings and high-yield savings saw more than 20% gains in number of applicants compared to the previous month; however, both were down compared to a year ago.
  • Despite increased shopping volumes, home-secured lending, as measured by the number of leads and/or applications, dropped compared to last month. The largest was the 38% drop in refinance activity.
  • Conversion rates were down in all three loan categories, dropping 1% in home equity, 2% in purchase, and 4% in refinance.

About the Financial Services Scorecard
A year ago, we introduced the Financial Services Monthly Performance scorecard produced by Compete. It summarizes the overall performance of 23 large U.S. financial institutions and lead-generation sites. Refer here for the detailed methodology as well as companies tracked.

Notes:
1. Year-over-year comparisons were added to the chart beginning in March 2008. Because of ongoing methodology tweaks, the percentages in this table may be slightly different than if you went back to the data from a year ago and calculated the change. 

2. Leads/applicants = Leads or applications depending on whether the site being tracked is a lead-generation site or an actual lender.

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Top 20 Finance & Banking Apps in Apple’s App Store

By Jim Bruene Posted on
Categories: Apple, Bank of America, iPhone, Mobile Banking

image It’s been almost a month since Apple launched its App Store for native iPhone apps. According to the company, 25 million have been downloaded, an impressive one-million-per-day pace (11 Aug update: The company reported 60 million downloads, with $30 million in sales, during the first 30 days.)

Luckily for banking geeks, Apple added a Finance category (see screenshot below), so it’s easier to track what’s popular in our sector. As of early today, a total of 42 finance apps were listed. The 20 most popular were (note 1): 

Rank Name Type Price Release* Rating** Num***
1 Bloomberg News Free 16 July 4 337
2 CheckPlease Tool to split dinner bills Free 31 July 3 77
3 Mobile Banking (BofA) Banking Free 4 July 2.5 323
4 PayPal Payments Free 1 July 2 85
5 Balance Expense register Free 30 July 4.5 41
6 Puluwai Real Estate Search Real estate Free 20 Jun 3.5 38
7 3in1 Mortgage Calc Calculator Free 30 Jul 3.5 7
8 TipCalc Tip calculator Free 19 Jul 3.5 6
9 TipTap Tip calculator $0.99 1 Aug 4 30
10 Budget Personal finance mgr $1.99 24 Jul 3.5 37
11 MyAccounts to Go View accounting info Free 15 Jul 2.5 16
12 Swissquote Stock quotes Free 17 Jul 3 2
13 LoanCalc Calculator $0.99 26 Jul 3 18
14 Mortgage Payment Calc Calculator $0.99 2 Aug 3 9
15 Day Bank Expense register $3.99 14 Jul 3.5 64
16 SplashMoney Banking & PFM (note 2) $9.99 24 Jul 3 84
17 iXpenselt Expense register $4.99 9 Jul 3.5 52
18 PocketMoney Personal finance mgr $9.99 1 Aug 3 55
19 LoanShark Calculator $4.99 30 Jul 4.5 5
20 Tipulator Tip calc $0.99 30 Jul 4 33

Source: Netbanker/Online Banking Report analysis of Apple App Store data, 5 Aug 2008
PFM = Personal financial management
Bank of America iphone app (5 Aug 2008)*Release date of latest version; there may have been previous versions released earlier; currently reviews carry over from previous versions
**Average user rating on 1-to-5 point scale
***Number of user reviews posted

 What’s notable:

  • Nine apps have a download fee ranging from $0.99 to $9.99
  • Only four have a user-rating of 4.0 or better (on a five-point scale): Balance (4.5), Bloomberg (4.0), LoanShark (4.5) and TipTap (4.0)
  • Three apps, including two of the most popular, are rated below 3.0: BofA (2.5), PayPal (2.0) and MyAccounts to Go (2.5)
  • The most-reviewed apps are Bloomberg (337 user reviews) and BofA’s mobile banking (323) (see previous coverage)

What’s innovative:
I haven’t used any of the apps yet, but from reading the descriptions, there’s not much new here (notes 3, 4). The apps fall into four main categories:

  • Tip calculators
  • Other financial calculators such as loan payments
  • Expense/check registers
  • Personal finance tracking apps

Even though these functions aren’t very advanced, the ability to access them easily from your mobile phone makes them more interesting. And banks looking to create a useful iPhone app should take note. BofA was criticized in early user reviews for posting little more than a landing page for its normal mobile banking screen (see screenshot above).

Financial institutions would likely find a more receptive audience if a couple useful functions were added to the application besides an online banking login screen. It would be relatively trivial to add an expense register, tip calculator and other calculator functions to the banking app. 

Apple App Store Finance category (5 Aug 2008)

Notes:
1. Apple does not provide any metrics on how many times the apps have been downloaded. It just lists them in rank order.

2. Download transactions from more than 200 financial institutions supporting Intuit’s DirectConnect

3. The most interesting app is SplashMoney’s account aggregation app that allows you to download transactions from more than 200 financial institutions that support Intuit’s Direct Connect.

4. See our Online Banking Report on Mobile Banking for more info.

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Login, Logoff Marketing Messages from Bank of America, PayPal, US Bank, WaMu and Wells Fargo

By Jim Bruene Posted on
Categories: Advertising & Promotion, Bank of America, PayPal, US Bank, Washington Mutual, Wells Fargo

image After returning from some R&R in Iowa and Kansas, I logged into my banking and credit card accounts to see what I'd forgotten to attend to before leaving town. Luckily, everything seemed in order this time.

Always on the lookout for online marketing examples, I thought it would be  interesting to compare and contrast the marketing messages presented to users as they logged in and logged out of five major banking sites. 

  • Bank of America (business and personal credit cards): BofA typically has a marketing message at login and logoff.
    Login  The bank's brokerage division is pitching free Morningstar mutual fund research. I haven't seen this one before, and it seems a bit wordy, so it may be the first time for this offer (see screenshot #1 below)
    Logout  A pitch for a cash-back business credit card. It's a good offer, but perplexing, given that I already have a business and personal card with BofA. Not sure why they want me to have three (screenshot #2).
  • PayPal (verified account): PayPal has used log-in splash-screens almost since it began in 1999 with a mix of marketing and service messages. But they don't overuse the technique, so it's noticeable when they have a new splash-screen running.
    Login  No marketing, just direct entry to main screen
    Logout  No marketing, just a landing at the usual PayPal merchant emporium (screenshot #3)
  • US Bank (multiple accounts): I don't think I've ever seen a marketing message from US Bank at login or logoff. I believe I've seen a service message at login a few times over the years, but it's extremely rare.
    Login  No marketing, just dropped on main account page as usual
    Logout  No marketing, just a brief "you've been logged out" message
  • WaMu (business checking): I've had the account only a few months, but WaMu has frequently posted marketing messages at login, and they've been relatively creative, as you'd expect.
    Login  Pitching its WaMu Live concert promotion which provides exclusive access to summer events to WaMu credit and debit card holders (screenshot #4). 
    Logout  No marketing, just a solid recap of security precautions, a good message to leave with online banking users (screenshot #5).
  • Wells Fargo (credit card): Wells uses marketing messages frequently at both login and logout.
    Login  Electronic statement (paper turnoff), something I've not done yet (screenshot #6).
    Logoff  Home equity loans (screenshot #7)

What's Innovative?
There wasn't anything particularly enlightening in these examples. The WaMu Live pitch was the only truly unique message. For the most part, they were typical, well-crafted marketing messages you'd expect from these major players. That's fine now, since most customers don't yet have "banner fatigue" at their online banking site. But going forward, the messages will need to be more targeted and more interesting to get attention and action from jaded online users.

The other issue is frequency. You'll figure this out through testing, but there's a line you don't want to cross where a splash-screen message presented at every login ceases to be effective and is just plain annoying.

Finally, for financial institutions, such as US Bank, still not using this login real estate for sales messages, your customers thank you; however, quick-loading, targeted messaging, used with discretion, should benefit your bottom line.   

1. Bank of America login screen for business-credit-card only account (1 Aug 2008)image

2. Bank of America logoff screen (1 Aug 2008)

image

3. PayPal logout (1 Aug 2008)

image

4. WaMu login screen (31 July 2008)image 

5. WaMu logout screen (1 August 2008)image

6. Wells Fargo login splash screen (1 Aug 2008)

image

7. Wells Fargo logoff screen (1 Aug 2008)

image

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Frost Bank Momentum Account Combines Reward Checking and Personal Financial Management

By Jim Bruene Posted on
Categories: Andera, Deposits, Checking, Savings, CDs, Personal Financial Management

image After a solid decade ignoring the financial management features of online banking (see note 1), we now have two banks doing very interesting things melding transaction accounts with personal financial management.

Frost Bank is the latest visionary, launching its Momentum Account this week (press release). The account melds high-yield checking, goal-oriented savings, and financial management into one online offering. Unlike PNC Bank’s VirtualWallet, which is clearly aimed at the youth market (see previous coverage), Momentum goes directly to the online sweet spot, 30- and 40-somethings trying to manage their money in a more systematic way.

Frost Bank Momentum Account video page (30 July 2008)

The account
Basically, it’s a fee-free, interest-bearing checking account with the usual freebies: debit card, online banking, bill pay. After the first three months, balances of $15,000+ earn 3% and those under $15,000 earn basically zero. However, the bank has added an interesting twist they call “DIY APY (see screenshot below). For every 10 monthly debit card transactions, they add 5 basis points to the interest rate, up to a maximum gain of 0.25% (for 50 debit card transactions).

That’s a piddling amount, earning about a buck a month (pre-tax) for someone with $25,000 in the account typically doing 10 to 19 debit card transactions monthly. Yet most consumers like the feeling of winning the rewards game, so it should be good for marketing and retention.

Like PNC’s VirtualWallet, online account opening is powered by Andera.

The innovations
Besides the DIY APY gimmick, the new account is noteworthy because it incorporates goal-oriented savings and transaction tracking into the interface. Users can allocate funds to one or more savings goals and set up automated transfers to the savings sub-accounts.

The interface also includes budget-categorization features using the folders metaphor. And the usual charting and graphing functions are available. Unfortunately, there is no online demo, so I could see only the features in the bank’s demo video. 

Is it trendworthy?
I’m not ready to say that two examples make a trend, but given all the interest by investors and the press in online personal finance, I think this is the beginning of an interesting period in online finance product development.

Frost Bank homepage announces “DIY APY” (30 July 2008)

Frost Bank homepage announces Momentum account (30 July 2008)

Note:
1. See Online Banking Report: Personal Finance Features for Online Banking for more information on the pros and cons of various personal finance features.

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