Alt Payments Archives

Launching: 2,000 Bitcoin/Crypto-currency Startups

By Jim Bruene Posted on April 7, 2014
Categories: Alt Payments, Cryptocurrency

Jacob K. Javits Center (Wikipedia)

Bitcoin first passed the $200 mark a year ago (vs. $450 today). I didn’t know much about it then, figuring it was a fad best left to the speculators to debate. But I was wrong. Bitcoin, or something similar, appears to be here to stay.

Case in point: There is a 2,000-person Bitcoin event in NYC today and tomorrow, Inside Bitcoins, at the Javits Center no less. But don’t worry if you miss it, the event is scheduled to travel the globe with stops in Hong Kong, Melbourne, Tel Aviv, London, Singapore, Berlin, before landing back in NYC a year from now.

In the keynote, Circle CEO Jeremy Allaire estimated 2,000 startups globally are working on crypto-currency products and services. That alone makes it more than a fad (bubble perhaps, but not a fad). There is no putting the crypto-currency genie back in the bottle. The technology is too compelling. The demand for alternative stored value is so huge that I don’t see it being regulated away, at least outside the west.

Relevance for Banks: U.S. financial institutions will steer clear until regulatory uncertainties are cleared up. While regulators ARE paying attention (even the IRS recently weighed in), don’t expect banks or credit unions here to be accepting Bitcoins for deposit anytime soon.

However, I do expect U.S. prepaid-card based “near banks” (Moven, Onbudget) to work with Coinbase and others to make it easy to move Bitcoin value onto their cards (see note 1). For inspiration, check out the Bitcoin debit card launched today by Hong Kong-based Cryptex Card (press release).

———————-

Notes:
1. Both Coinbase and Onbudget will demo separately at FinovateSpring, three weeks from now.
2. For more, see our Feb 2014 OBR report on alt-payments, Money 3.0 (subscription).

Share this:

Send Post Twitter LinkedIn Facebook

Fintech Four: T-Mobile, Stripe, Andera & Balanced Payments

By Jim Bruene Posted on January 27, 2014
Categories: Account opening, Alt Payments, Crowdfunding, Prepaid/gift cards

Wow, it was a whirlwind of fintech news in the past seven days. Here are four stories that spiked on our fin-o-meter:

________________________________

1. Stripe’s $80 million funding
_________________________________________

It’s not so much the amount of the funding, though that’s one of the biggest C-rounds we’ve seen in the space, rivaling Square’s $100 million round in June 2011. But the jaw-dropping aspect was the valuation, a reported $1.75 billion, double what PayPal just paid for Braintree, which is far bigger than Stripe.

But as PandoDaily’s Carmel DeAmicis and Michael Carney point out, it was favorable terms (2x liquidation-preference) that substantially boosted the valuation. Regardless of the funny VC math involved, it was a monster round for the small company.

Clear winners: Stripe founders and early investors
Potential winners: Other payment enablers who now have access to more funding
Potential losers: Square, which could have bought Stripe at a much lower valuation; PayPal; and other acquirers who now face an even stronger competitor

___________________________________________

2. T-Mobile teams up with Bancorp Bank & Blackhawk Network for branded prepaid card
___________________________________________

An interesting play by T-Mobile – turning their 7,500 locations into cash-handling mini-branches – is its new Mobile Money prepaid card. I’m not sure that’s the business I would have entered if I were in charge, but it will be closely watched. If it’s wildly profitable (unlikely), it could put pressure on the entire U.S. branch banking system. More likely, its success will be moderate and will fizzle out in a few years when T-Mobile finds more lucrative ways to deploy its real estate and sales staff.

In any event, it will be closely watched by banks and non-bank retailers alike. (Potentially, T-Mobile could make more money reselling the consumer data from the effort, than from the prepaid business itself.)

Clear winners: Bancorp Bank (issuer) and Blackhawk (prepaid network)
Potential winners: T-Mobile (and other telcos that copy the strategy)
Potential losers: Wal-Mart, check cashing stores, and other players in the cash space

_________________________________________________________

3. Mobile account opening (MAO) used by 1 of every 4 Andera-powered applications
_________________________________________________________

Andera, the online account-opening powerhouse, this week published a useful report (free with registration) analyzing account-opening metrics across its 500 clients. The stat that caught my eye was the number of mobile applications already being received, despite the newness of the channel for financial transactions. One in four Andera-processed financial product applications are received from tablets or smartphones, up from one in 25 three years ago. And three-quarters of the mobile volume is from smartphones.

Clear winners: Mobile leaders
Potential winners: Andera and other account-opening specialists
Potential losers: Bank branches, which will continue to be a major (albeit costly) source of new account applications

_______________________________________________________

4. Balanced Payments crowdfunds $50,000 to launch new feature
_______________________________________________________

I am a big fan of crowdfunding and expect massive growth (note 1), but I never thought I’d see it used by a fintech company to fund a new feature. But Balanced Payments, a Y Combinator-backed payment-startup serving online marketplaces, successfully raised more than $50,000 last week in about a day (Crowdhoster campaign). That surpassed its goal for adding a “push to debit card” (Techcrunch post).

It sounds too good to be true. But the startup used a clever incentive system for backers: prepaid fees. In other words, Balance customers could pledge a few thousand dollars for the feature, and then that money paid upfront would cover a given amount of transaction fees in the future. And the more that was pledged, the cheaper the transaction fees became. And there was a large incentive to pledge at the $10,000 level (see below).

Here’s the earnings table:

>> $1,000 pledge receives 1,000 prepaid transaction at $1 each
>> $2,500 pledge receives 3,333 transactions for $0.75 each
>> $10,000 pledge receives 40,000 transactions for $0.25 each

You could also toss in $25 for a T-shirt.

So far, there are 26 backers (25 if you don’t count my T-shirt pledge).

———-
Note: For much more on crowdfunding (debt and equity), see our May 2013 report (subscription).

Share this:

Send Post Twitter LinkedIn Facebook

Fintech Four from Last Week

By Jim Bruene Posted on November 25, 2013
Categories: Alt Payments, Bill payment, Personal Financial Management

Since my previous Fintech Four (when Bitcoin was a lowly $200), it’s been an interesting few weeks. Here are the standouts last week:

_________________________________

One: Coin is an overnight YouTube sensation
_________________________________

Who would have guessed a $50 payment gadget could be a viral hit? In the week since it was announced, the 105-second demo video (made Sandwich Video) has racked up more than 6 million views, 26,000 likes, and almost 9,000 comments. The company said it’s original $50,000 crowdfunding goal was hit in 47 minutes, they have not said how many have been sold since. According to a button on its site, the pre-order period will last 30 days.

Many of speculated about why this happened, but the most concise summary is on Quora written by Brian Roemmele. He lists five reasons:

1. The product solves a real problem, too many cards in the wallet

2. Coin implies there is a limited supply

3. It was selling at for a limited time at 50% off

4. It appealed to early adopters with a blend of “old” meets “new”

5. $5 referral credit (against the $50 cost) with a built-in sharing button at the end of the purchase process.

________________________________________

Two: The latest fintech prize winners
________________________________________

Fintech startups have been taking home awards at various fall tech events this fall. Here are six winners in from the past 10 days:

1. FinovateAsia Best of Show winners from Singapore (post):

BehavioSec biometric authentication
IND Group Essence mobile banking app
Kofax loan underwriting solution
Yodlee Tandem financial collaboration app

2. Innotribe Disrupt winner at NextBank LatinAmerica (Bogota, Columbia)

Intoo, a 6-person Brazilian small business financing portal, won the Latin American round of the year-long Innotribe contest

3. Get In the Ring winner at this Dutch startup competition (Rotterdam)

EyeVerify (FinovateSpring 13) took home $11,000 in cash, plus a potential million euro investment, for its eyeprint authentication technology (post)

___________________________________________

Three: Finovera launches “PFM for your bills”
___________________________________________

Finovera (FinovateSpring 13), officially launched its billing/PFM portal and landed a favorable TechCrunch post. The service competes in the PFM space, but is more focused on the billing and payments side (along with Manilla and doxo). Unlike analyzing/charting spending, the process of organizing, paying, and archiving bills is a near-universal need. So, it’s an area that retail banks should pay close attention to (note 1).

___________________________________________

Four: Virtual currencies gain more real-world backing
___________________________________________

U.S. regulators didn’t exactly endorse Bitcoin and other virtual currencies, but they didn’t condemn it either (Financial Times article). That was enough to send prices through the roof, touching $900 by some reports, a nice 50x gain since Jan 1. Most assets that appreciate so rapidly fall back to earth, but no one knows for sure if Bitcoin isn’t than 1-in-a-million item that defies common sense.

But this is not JUST a Bitcoin story, it’s about the “Internet of money.” And it could be the biggest financial innovation since the credit card. However, it’s still boggles my mind that regulators who are having a hard time letting normal people invest in privately held companies, are not clamping down on unregulated virtual currency trading. This story is far from finished.

Table: USD value of a Bitcoin at Mt. Gox (last 6 months)

—————–
———————–

Notes:
1. For a deeper dive, see our report on paperless billing and banking (Nov. 2010, subscription).
2. All Finovate alum videos are available free of charge at our Finovate.com website.

Share this:

Send Post Twitter LinkedIn Facebook

Simple to Launch Bluetooth-Based P2P Payments

By Jim Bruene Posted on October 21, 2013
Categories: Alt Payments, P2P Payments, Simple

I’m glad I stayed until the end of Money2020. Some time after 5pm on day four (9 Oct 2013) of the biggest financial tradeshow since BAI Retail Delivery in Nov 2000 (see note 1), Josh Reich introduced two members of team Simple, Tom Wanielista and Collin Ruffenach. The duo proceeded to send each other the first Bluetooth-enabled payment I’ve ever seen. It looked a lot like a Bump payment, recently relaunched by Capital One 360, but without the awkward phone gyrations.

The feature is called MoneyDrop, built by Wanielista and Ruffenach, and allows Simple users within a few feet of each other to transfer money with a few finger swipes in the Simple mobile app. It’s easy to use, since other Simple users automatically pop up on the MoneyDrop screen when they are in range (see screenshot below).

The startup didn’t say when the service will be available to Simple’s 65,000 customers, but TechCrunch reports it will hit iOS first (iPhone 4S or above required) with Android in the pipeline.

Bottom line: MoneyDrop is similar to the Palm Pilot “beaming” service PayPal began in 1999, but then quickly abandoned for email p2p model (see note 1). The ubiquity of smartphones makes it much more interesting today. Still, the requirement that both users have a Simple account, and newer smartphones, limits its uptake for now (note 2).

While I didn’t know it at the time of the Money2020 session, Square was about to introduce a drop-dead simple P2P payment system (see Friday’s post). That’s a free and easy way for Simple customers to move money as well. It took just 3.5 hours in my test for money to move from my Chase debit card to my Simple account. Not as cool as instant MoneyDropping, but it works with any Visa/MasterCard debit.

Despite all that, I think it’s a great move by Simple. MoneyDrop provides a tangible leg up on other mobile banking apps, a moderate viral boost, and great publicity.

———————————

Simple MoneyDrop P2P payment service (8 Oct 2013)

———————————————
Notes:
1. Retail Delivery topped out around 10,000 attendees (includes exhibitor staff) in 1999/2000. After just two years, Money2020 is at more than 40% of that.
2. A TechCrunch commenter noted that MoneyDrop also sounds like what stealthy Clinkle is planning to unleash on the world. Quite a coup if Simple beat them to market.
3. For more info on peer-to-peer payments (P2P), see our Online Banking Report issue devoted to the topic (Dec 2009, subscription).

Share this:

Send Post Twitter LinkedIn Facebook

First Look: Google Wallet "Pay by Gmail" (and the Pain of Authentication)

By Jim Bruene Posted on May 22, 2013
Categories: Alt Payments, Google, Mobile Payments, P2P Payments

As you probably already know, last week Google launched P2P payments via Gmail (and through the Google Wallet mobile/online interface). Once authenticated, users simply “attach” funds to an email message (see inset).

Bank transfers (e.g., ACH) are free while card-based payments will cost senders 2.9% of the amount, with a $0.30 minimum. However, all transactions are free for an unspecified time during the launch period.

With an estimated 400 to 500 million global Gmail users, the service has the potential to become an important method of sending money (it’s only available to U.S. users at this point). However, like all U.S.-based P2P services, it’s easy to send money, but not always so easy to receive it.

In my first test, I was able to claim the funds relatively easily with my four-year-old Google Wallet account. There was a short authentication process with a login, name, address, birth date and last four digits of my Social Security Number (SSN). After claiming the funds, I was then able to send money out of the system (note 2).

After sending my two cents over to Larry Page, congratulating him on the launch (see screenshots below), I then sent money to my work email account. While it was deceptively simple to send the money, I was unable to claim the money, despite already having an active Google Wallet associated with that email address.

After receiving the email notification, I went through the same authentication process as above. But after logging in and providing my personal info, I was hit with four additional out-of-wallet authentication questions, apparently pulled from public databases (I think NOT my credit bureau due to the errors..see below).

But apparently there was an error in the out-of-wallet Q&A served to me. The first two questions obviously pertained to me, and I answered them correctly, but the final two did not (note 6), so I answered “none of the above.” But Google didn’t believe me, and I was told my answers were “inconsistent” and that I could not be authenticated online.

I was invited to upload three pieces of documentation since I failed the Q&A (all required):

Picture ID (e.g., drivers license)
Proof of address (e.g., utility bill)
Social Security card

Unfortunately, I haven’t laid eyes on my Social Security card for several decades and haven’t a clue where it is. And in 18 years of testing online account opening, no one has ever asked for it. So I’m stuck. Had someone sent me a real payment, I would be extremely frustrated, and would have to either ask for a check to be sent, or use PayPal.

Bottom line: This is a brilliant play by Google, taking everyone by surprise. However, P2P payments (in the USA anyway) are still a pain to receive the first time which dampens their viral growth (note 7). I understand the reasons for good authentication, though it still seems like overkill given that I was only claiming a one-cent transfer via a pre-existing and active Google Wallet account (used for more than $400 worth of purchases this year). And especially after I provided the correct name, address, birth date, SSN and two additional out-of-wallet questions.

But I know the folks from Mountain View, Calif., will work the risk-procedure kinks out quickly (there is a reason it’s called “beta”). And if they stick with it (RIP Google Reader), Google should be able to build a critical mass of financially authenticated users, making “gpay” as easy as using PayPal.

————————-

How Gmail Pay works

Step 1: Craft email message and click on the “$” icon at the bottom of the compose screen

Step 2: Attach funds via Wallet balance, bank transfers, or card; then add memo if desired

Step 3: Press send

Step 4: Final chance to review

Final: Confirmation copy is placed in your inbox (note 8)

—————————-

Notes:
1. During the beta test, you can become a P2P user only by first receiving funds from an existing user.
2. I have two Google Wallet accounts, one set up in 2009 and the other established in January 2013 when I got a Nexus NFC phone with built-in Wallet support. The credit card associated with both accounts was stolen earlier this year, and I had to add a new card to both wallets before I could use them. This could have triggered additional authentication requirements on the second Wallet account.
3. The payment appears as a “card” within a Gmail. There is no indication in the title of the message that it might contain money (user controls the rest of the email).
4. The transaction fee was waived for my Discover Card-based payment. I assume it would be on other card types, but I didn’t test that.
5. Users have the option to add a memo to the payment (in addition to what’s included in the email message).
6. Ironically, if the recipient was mobile-deposit-enabled, it would be easier the first time to send a high-resolution image of a check that the user could take a picture of and then deposit via mobile banking. Or, for Capital One 360 users, the emailed image could simply be
uploaded directly into their account (see post).
7. Though I suspect the last two questions could have been drawn from online info about my brother, who has a different first name and lives 2,000 miles from me.
8. Yesterday, confirmation emails went to my inbox when I sent a payment. Tonight, I am not seeing that: It’s only showing in my Sent messages.
9. For more info, see our recent Online Banking Report: Digital & Mobile Wallets (published Feb 2013, subscription).

Share this:

Send Post Twitter LinkedIn Facebook

PayPal Onboarding Email Messages

By Jim Bruene Posted on March 5, 2013
Categories: Alt Payments, Onboarding, PayPal

As a followup to last week’s post on the signup process at PayPal, I thought I’d share the onboarding messages received during the first 10 days. There have been three so far (see screenshots below):

1) Day 0: Welcome message

2) Day 3: General message about PayPal benefits

3) Day 4: More specific message about shopping with PayPal

I’ve yet to link a credit card or bank account, so I expect more messages in the near future.

Bottom line: Onboarding is one of those areas that is impossible to perfect. It’s an art and you’ll be forever tweaking it. That said, there are some basics tenets to follow: a friendly, immediate welcome message and prompt followups with benefit-laden messages. PayPal ticks the boxes here, though they could add a bit more visual punch and tighter copy.

——————————–

Initial confirmation message from PayPal (24 Feb 2013)

Day 3: Followup message outlining PayPal benefits

Day 4: Followup details shopping opportunities with PayPal

Share this:

Send Post Twitter LinkedIn Facebook

First Look: The Application & Onboarding Process for PayPal Here

By Jim Bruene Posted on June 28, 2012
Categories: Account opening, Alt Payments, Mobile Payments, PayPal

I put my name on the list for PayPal Here (its response to Square) when it was announced in the spring. Yesterday, I received my invitation to “apply” for the service.

I was a little surprised that I still had to apply given that I’ve had this PayPal account since 1999, and have run many thousands of dollars through it, both as a buyer and a merchant. But I understand the enormous risks in payment acceptance, so I will happily oblige some hassle.

Interestingly, the process must be done via the mobile PayPal Here app. You cannot simply complete the application via PayPal’s normal online system. Again, this is slightly inconvenient for me, but it’s good to see PayPal enabling the mobile app for signup. This may be the first financial product from a major U.S. company that has a mobile-only app process.

The mobile signup process is a little confusing. First, you must download the separate PayPal Here app (it in not integrated with the regular PayPal app). Then when launched, if you press “register” on the opening screen (screenshot below), instead of being allowed to register, you are asked to put yourself on the PayPal Here waitlist

I thought I’d hit a dead end, so I went back to the invitation email (below). What you must do instead is login to the app with your PayPal credentials (note 1). Once in, users go through a quick account verification, then a merchants services mini-application, and ID check against credit bureau data.

At the end of the process, a reader is mailed to your business address and an optional debit card is mailed to your primary address on file. But you are immediately allowed to begin accepting payments through by scanning a card with the mobile camera or keying it in. That’s impressive.

The next day, I received an email with a tracking number for the reader (screenshot below).

Bottom line: The process seemed a little convoluted for an existing customer. But, in all it took 4 to 5 minutes and required no supporting info and I was able to accept a credit card immediately. Had I not had trouble logging in, I could have completed it in closer under 3 minutes. Overall, I score it a B+.

—————————————-

Email to apply for PayPal Here (26 June 2012)

PayPal Here login screen
Note: Invited users must login, NOT try to register (which won’t work)

Pre-populated account Card reader
verification confirmation screen

Confirmation email the next day (28 June 2012)

————————–

Note:
1. The email said to login with my PayPal email address and password. I got an odd error message doing that, saying to “append my code to the password.” I think this is because I have second factor authentication turned on for my PayPal account. But I could not see any way to get a code sent to me through the PayPal Here app, so I was stuck. I then tried logging in with my PayPal mobile credentials, and that worked fine. It seems like there might be a bug here.

Share this:

Send Post Twitter LinkedIn Facebook

Two Card-Linked Offers/Rewards Startups Launch at TechCrunch Disrupt

By Jim Bruene Posted on May 24, 2012
Categories: Alt Payments, Credit/Debit Cards, Crowdfunding, Launches, Rewards Programs

While I’ve read TechCrunch since its beginning, I’ve only been able to make it to their semi-annual event, Disrupt, once before. It’s usually just too close to our own Finovate. But this year I made the trek to Pier 94 in Manhattan to see what was going on in tech in general and to meet with the fintech startups in the Startup Alley or Battlefield launch competition.

There were six fintech companies in total. Three offered variations on card-linked offers, one has developed an alternative payment system, one was a newer payments gateway, and surprisingly there was just a single crowdfunding platform.

Startup Battlefield competitors from fintech: TechCrunch selected thirty companies in advance. All have agreed to launch their companies on stage at the event.

Cardify: Card-linked loyalty/offers geared toward local merchants. Sean Rad is CEO and of the West Hollywood company which has raised $750,000.
Mirth: Same as above. Jeremy Philip Galen is Founder. The NYC-based company is bootstrapped.

Startup Alley participants from fintech: These are companies less than two years old that qualify for a table in the networking hall. Each day one of the Alley companies is voted to the stage to compete in the Battlefield.

LocalBonus: A card-linked offers platform focusing on the local market
Payintele: An alt-payments company using barcodes to pass info between merchant and payee (I’ll do a whole post on them shortly)
PayLeap: A payments gateway from two previous Authorize.net execs
The Crowd Funds: A crowdfunding startup from former E*Trade CTO, Joshua Levine

Observations: It was interesting to see three new card-linked rewards companies all going after the local market. But if you look at what Groupon’s done with local merchants and where Square is headed, you can see there are huge opportunities here.

And the payment APIs available from Cardspring (which both Mirth and Cardify use) are making it relatively easy for startups to tap into a merchant’s card transaction streams to make offers, tally rewards, identify frequent customers, and communicate with them.

As a side note, Cardify has a gorgeous UI. It’s very hip and high-end looking like something you’d see at more well-funded companies such as Square, Simple or Mint (screenshot below). Kudos to the design folk there.

———

Cardify homepage (24 May 2012)

—————————-

Notes:
1. While not a fintech company, as an auction junkie, I was intrigued by Outbid’s social mobile/online auction platform. The company said it’s talking to four banks looking to host live auctions on their site to use for promotions and social gaming. I think it’s a promising idea, one I’ve explored a few times over the years. But with Facebook Connect you can actually get a critical mass of customers involved very quickly. The company had the cheesiest demo I’ve ever seen (and that’s saying something), but that shouldn’t impact your decision.

Share this:

Send Post Twitter LinkedIn Facebook

Feature Friday: Paying Online with Cash

By Jim Bruene Posted on April 27, 2012
Categories: Alt Payments, Feature Friday, Mobile Payments, Wal-Mart

I love headline alliteration and it’s good to have a shtick, so I will periodically post a “Feature Friday” here. It turns out I started last Friday with Capital One’s new mobile rewards feature, the ability to trade rewards points to pay for PAST travel (and they did it without resorting to time travel).

This week, old-school cash was in the news:

Finovate fan favorite PayNearMe launched a mobile version of its cash-based payment service that allows users to buy online then take the receipt to 7-11 to pay in cash (or card). Until now, the system relied on a printed receipt to hand over to the cashier. And printing is so 2009. The new mobile version (inset), does away with the printing, allowing users to show the cashier a barcode rendered on a mobile phone. From then on, the process is the same.
WalMart just launched a “pay with cash option” that works with its Walmart.com site (screenshots below). The company could extend the service to purchases at other ecommerce sites if it wants to drive more traffic to stores.

Relevance for Netbankers: While we don’t spend much time here discussing cash, it’s still important across most demographics. And banks have a huge stake in the game with their ATM bases and other cash-handling infrastructure.

Banks could do the same thing as PayNearMe, using their branch and ATM networks to take cash over the counter as payment. And many parents may prefer sending junior to the bank instead of the convenience store.

But I also wonder if we’ll see the reverse? Instead of handing cash over to the 7-11 clerk, parents can transmit a bar code to their kid’s mobile to allow them to walk out of the store with a crisp $20 for lunch and a bus ride home. And it would make sense to extend that capability to mobile-enabled ATMs and even branches.

Anyway, that’s all for this week, have a great one!

———-

Walmart homepage (27 April 2012)

Homepage popup lays out how it works

Walmart checkout
Choose “cash” icon under “enter a new payment method”

Share this:

Send Post Twitter LinkedIn Facebook

Square for the Holidays

By Jim Bruene Posted on December 5, 2011
Categories: Alt Payments, Email Samples, Square

It’s not easy packaging banking products as holiday gifts. Prepaid gift cards are an obvious exception, though few banks actively market them online. And ING Direct’s Sharebuilder has for years sold a beginner’s investment package that’s intended to be given to kids or grandkids (see Wells Fargo/Sharebuilder 2002 holiday email below).

This year, Square joins that short list with a gift-wrapped box containing its iPhone/Android dongle, used to swipe credit cards. You can order 1, 2 or 3 packages online at a cost of just $1 each for the gift wrap. The dongles are sent to the buyer who must distribute.

I learned about it in an email right before the Thanksgiving holiday (screenshot below).

Bottom line: While recipients may be a little less impressed once they find out these dongles are free online, overall I love it. It’s really the payments advice doled out when giving the package that can make it special.

Good idea and great email/landing page design: A

———————————

Email received (22 Nov 2011)

Landing page (link)

Wells Fargo/Sharebuilder email from Dec 2002 (post)

——————————

Note: We cover email marketing, financial website usability, payments and much more in our subscription publication, Online Banking Report.

Share this:

Send Post Twitter LinkedIn Facebook

WV United FCU Offering Both Square and Dwolla Payments

By Jim Bruene Posted on November 14, 2011
Categories: Alt Payments, P2P Payments, Square

During an an onstage interview at The Wall Street Journal’s AsiaD conference, Jack Dorsey said he was working with banks to distribute Square readers/accounts directly to bank customers.

Since it was Honk Kong, I was thinking OCBC or HSBC. But it turns out the first financial institution (note 1) to take Jack up on his offer, is WV United FCU, a 5,000-member CU headquartered in Charleston, West Virginia. If that name sounds familiar, it’s because it was the first financial institution in the world to implement mobile remote check deposit in August 2009 (previous post). WV United is also featuring Dwolla P2P/alt-payments on its homepage.

Square: The CU is promoting Square on its home page (see screenshot #1 below). Square is the first of five promotions that rotate across the top (see also Dwolla below). The promotion features the 2.75% merchant rate and uses the @square Twitter feed to make it more interesting. The landing page invites members to signup for Square and redirects them to the startup’s webpage. It doesn’t appear there are any official affiliate arrangements. But Square allows payments to be transferred to any bank account, so WV United members can have the proceeds automatically deposited to the CU account.
Dwolla: The Dwolla connection is more integrated, with a co-branded online account opening page (screenshot #4). There is also more info loaded onto the CU’s page including a short video, the @dwolla Twitter feed, and a features/benefits section.

Bottom line: No one is going to accuse 11-employee WV United FCU of not keeping up, innovation-wise, with the big banks. In fact, it’s setting the pace in some areas, albeit in a more "bolted on" fashion (note 2). Granted there’s little, if any, direct revenue from these efforts. But they also require no infrastructure investment. So, if they keep members satisfied and employees excited, then it’s a win.

—————————————-

1. WV United FCU homepage (14 Nov 2011)
Note: The credit union leveraged Bank Transfer Day for another 10 days (lower right). Smart.

2. Landing page for Square promo (14 Nov 2011, link)
Note: Square Twitter feed on right

3. Landing page for Dwolla promo (link)

4. Co-branded online account opening (link)

Notes:
1. They are the first that I’ve heard of. There could be others linking to Square in a similar fashion.
2. When I say "bolted on" I mean that the experience isn’t integrated with other WV United online offerings. Integrated is best, but bolted on is a good way to test the market and keep costs down.
3. For more info on P2P payments and other topics, see our subscription service, Online Banking Report.

Share this:

Send Post Twitter LinkedIn Facebook

Launching: Openbucks Gift Card Payment Network

By Jim Bruene Posted on September 12, 2011
Categories: Alt Payments, Launches, Prepaid/gift cards

Today at TechCrunch Disrupt, Openbucks announced its “gift card” payment network which works like an ATM switch; you can use whatever value you have in a participating gift card to buy something at any participating online retailer.

For example, you could use the $20 in your Subway card (a beta participant) to buy virtual goods at online games. Eventually, they want to expand beyond the purchase of digital goods.

The product is targeted to those that don’t have debit or credit cards, especially heavy game-playing teenagers. “Gift cards” would be added to the payment options at checkout at the gaming site.

Share this:

Send Post Twitter LinkedIn Facebook