Credit/Debit Cards Archives - Page 4 of 13

Apple Just Put a Mobile Wallet In 100+ Million iPhones: But Is This Passbook a Friend or Foe of Banks?

By Jim Bruene Posted on June 12, 2012
Categories: Apple, Credit/Debit Cards, Mobile Commerce, Mobile Payments, Wallets

If it wasn’t obvious already, Apple is becoming the operating system of your life. And since money touches much of what we do, it’s no surprise that the company is moving into the payments side.

Actually, Apple is already there. The most valuable company on the planet is already the biggest payments issuer, with 400 million payment-enable iTunes accounts.

Now, when iOS6 becomes available this fall, Apple will be the biggest mobile wallet provider as well, when 100+ million iPhones automatically getting one with the new OS upgrade.

The new baked-in wallet app is called Passbook, I presume because iWallet was taken, or Apple is saving it for something even bigger.

But regardless of the name, Passbook has broad implications in payments and commerce in general. One look at the UI (inset) shows what banks are up against. An app loaded with store cards! Just what a gazillion big-spending early adopters have been hoping for (congrats to Target and Starbucks for leading the way again).

The main reason ~~iWallet~~ Passbook is such a big deal, besides the Apple halo effect, is that it automatically opens your “virtual card” when you walk in the store. Yes, you read it correctly. Automatically. Opening. Mobile. Payment card.

For example, when you walk into Starbucks its virtual store card, rendered in 2D bar code, will be triggered on your phone. You just swipe the lock-screen notification, enter a PIN (if necessary), scan your phone at the POS, drink your coffee and enjoy the perks (see below).

Is the POS experience dramatically better than using your Visa/MasterCard plastic? Not really during those 15 seconds of your life, but it’s not worse either. Shaving 2 seconds off transaction time is not what this is about. It’s the retailer value-adds that make it a huge winner.

Smart merchants will tack loyalty points/rewards/amenities (how about a free shot of vanilla in that latte?) on to Passbook-enabled purchases and you will soon be conditioned to pay with your phone. Really, just having your receipt stored safely away in the Passbook app could make the difference between using the store card vs. MC/Visa.

Because Apple wants to be platform, not a bank, they are making the tools available to developers to create apps that play nice with Passbook along with all the other iPhone utilities. So I see this as bank/issuer friendly, so far anyway, though not everyone will benefit.

While this is only speculation, I see a couple things likely to happen:

1. Proprietary single-brand (closed loop) payments make a comeback: With a direct connection to the front-screen of your iPhone as soon as you walk in the door, retailers can put together compelling in-store loyalty offers on the fly. For example, I can walk into Best Buy, and up pops my store loyalty card on the front of my iPhone. And they can dangle all kinds of bennies at me in real time, while encouraging me to pay with my Best Buy credentials rendered in a QR code on the screen (and later via NFC or a “cloud” connection).

2. Banks and card issuers partner with retailers to become the preferred “Passbook card:” For stores that don’t want to bother with the payments piece, instead of presenting a store card with the customer walks in the door, they could present the preferred partner card. For example, Costco, which only takes American Express, could launch an AmEx Passbook card when customers walk in the door.

3. The beginning of the end for paper receipts: Users will have the comfort knowing their receipts are all accessible via iPhone (and in the iCloud). So they will opt out of paper receipts at the register.

4. Mobile offers/coupons just found a new home: If you want iPhone-wielding consumers to see your offer, Apple just created an instant place to store (and discover) deals. I’m not sure if this is good or bad for ad-supported banking, but it’s something to consider.

Bottom line: I could go on (for instance about Siri integration), but my head is about to explode with all the possibilities. Time will tell, but I think we just witnessed a watershed moment in mobile-enabled shopping and payments.

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Recommended reading:

Read the full analysis by Glenbrook’s Scott Loftesness here.
Fantastic stuff on on Quora too (HT to Brad Strothkamp for the link via Twitter).
The list of all the features via Techcrunch.

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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.

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Cardify homepage (24 May 2012)

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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.

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Feature Friday: Wow! More City Bank Texas Mobile Controls for Debit Cards

By Jim Bruene Posted on May 10, 2012
Categories: Credit/Debit Cards, Feature Friday, Mobile Banking, Security

Luckily, I ran into Jim Simpson, SVP IT at City Bank Texas, at Finovate Tuesday, or I might have missed his bank’s significant new app update this week.

I am so impressed with what they are doing down there in Lubbock. First, it was the debit card on/off switch a few months ago. And now they just added three new control switches (see inset):

Increase daily withdrawal limit at the ATM
Increase daily debit card purchasing limit
Allow foreign transactions

All three controls temporarily increase limits so customers can easily approve their own authorization exceptions (within limits).

Bottom line: Putting more control into the customers’ hands is what mobile banking is all about. And City Bank has taken the lead.

But they are just getting started. From what Jim told me this week, they have plenty of other ideas in the hopper. Keep an eye on these guys.

Update 17 May: I neglected to mention that the software is from Austin, TX-based Malauzai Software.

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Feature Friday: Ally’s Mobile Cash-Bank Finder & Call-Center-Hold-Time Meter

By Jim Bruene Posted on May 4, 2012
Categories: ATMs, Credit/Debit Cards, Mobile Banking, Service

Ally Bank jumped into the mobile fray launching a pair of apps last week, one for customers with account access, and the other an "ATM & Cash-Back Finder," the anyone can use.

The apps are well designed, as you’d expect from a direct bank with 1 million customers and $30 billion on deposit (note 1). But there were two novel features worth highlighting:

1. Real-time wait time in the call center: The mobile app contains a very prominent real-time indicator of just how long you’ll be on hold if you call Ally Bank. I’ve already raved about the Website version of this feature, so I won’t go into much detail. But it makes even more sense to place it front and center on an app on a mobile phone used to call the bank (see left screenshot below).

2. Cash-back locations included with ATM finder: While I’m not sure if this is an industry first, but after a fairly extensive search in the Apple App Store came up empty, I know it’s not common. Ally combines ATM locations and places where you can get cash back at the POS into a single map and/or list view (see right screenshot below).

Ally mobile banking app Ally ATM & Cash Finder app
for customers for anyone

Ally also makes sure its website visitors know they’ve gone mobile with a clever graphic in the middle-right of the homepage.

Ally homepage featuring new mobile offering (3 May 2012)

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Notes:
1. Ally announced the 1-million-customer milestone along with mobile apps (press release). Compared to a year ago, accounts were up 30% and deposits grew 25%.
2. While this could increase call-center calls, Ally must believe the customer advocacy positioning makes up for the increased costs.

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Capital One Add Rewards to Mobile App, Includes Ability to Redeem for PREVIOUS Travel

By Jim Bruene Posted on April 20, 2012
Categories: Capital One, Credit/Debit Cards, Feature Friday, Mobile Banking, Rewards Programs

Although it was one of the last major banks to launch an iPhone app, Capital One is now positioning itself to be a leader in mobile. Its April 5 iPhone app update included a new rewards function that’s the best I’ve seen.

Rewards point totals are clearly shown on an old-school “flip number” display (see screenshot right). But the novel part, and this may be an industry first, is the ability to redeem rewards in real-time, for travel purchases you’ve ALREADY MADE. (You can also redeem for cash or gift cards.)

I thought this was some kind of typo when I first saw it in the marketing material. So I tested it myself this morning. And sure enough it does exactly what it says.

Previous travel purchases made on the Capital One card are displayed in the app. Users select the one(s) they want to redeem for mileage points and Capital One provides a statement credit to refund the user for the purchase. Brilliant!

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Capital One’s mobile reward redemption for previous travel (20 April 2012)
Note: Select a transaction (below left), confirm (below right).

I also like Capital One’s new app “home page.” Instead of forcing a login before users can do anything, the bank offers several non-secure content areas:

Browse our products
Find branch/ATM
Mobile banking FAQ
Contact us

These are useful for customers who can’t or don’t want to log in. And of course, for prospects kicking the “mobile tires” at the bank.

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Marketing: Bank of America Offers $25 to Reactivate Visa Card

By Jim Bruene Posted on April 3, 2012
Categories: Bank of America, Credit/Debit Cards, Email Samples

Last fall, my primary personal credit card from Bank of America was compromised, and I was issued a new one. While I was waiting for the new card to arrive, I got in the habit of using another bank’s card. When the replacement card arrived, I stuffed it in a drawer, unactivated and still stuck to the mailer, forgetting I’d ever received it.

Fast forward six months, and I get an email this morning from Bank of America, offering $25 if I spend just $250 on the moth-balled card before June 30 (screenshot below). Coincidently, I’d just run across the forgotten card while doing a little preliminary tax prep.

The offer requires activation, a smart move that avoids paying out $25 to someone who never even noticed the offer. And I was pleasantly surprised that I had to do nothing more than click the Activate Now button in the email. Within a few seconds I was greeted with a confirmation delivered through a BofA webpage (second screenshot; see update below).

Bottom line: It worked. I’ve got the BofA card back in my wallet, and I’ll be using it tomorrow. And as I’m sure the bank knows, they are likely to make the $25 back within a month or two, assuming I resume my previous charging behavior. Well done, BofA card marketing dept.

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Bank of America email offering $25 cash back to reactivate my credit card (3 April 2012)

The one-click activation process* took us to this screen on the BofA website

*Update 4 April (in response to comment): Although I didn’t test it, it looked as though the single click activated the offer only. I still had to phone BofA using the usual process to activate the card. It would have been nice to have been able to do both through the Activate button.

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The Debit Card On/Off Switch from City Bank of Texas

By Jim Bruene Posted on January 23, 2012
Categories: BancVue, Best of the Web, Credit/Debit Cards, Debit Cards

City Bank of Texas has been a mobile innovator for more than four years, launching a ClairMail-powered mobile site in Oct 2008. I first heard its story at the Mobile Summit in June 2009. At that time, the bank already had 10% of its online banking base using mobile.

City Bank now offers a full range of apps including Android, iPhone and iPad, which make for a pretty impressive graphic. The new apps are powered by Malauzai Software.

And, in a world where most apps look pretty much the same, it has managed to pioneer several unique features:

Debit card on/off switch: If customers ever want to switch off their debit card, because it was misplaced, or if funds are running low, they simply move the toggle on the My Cards page of the mobile app (see inset).
Reward-checking status: City Bank is a long-time rewards-checking client of BancVue. Its mobile app includes a rewards-tracking feature so users can see where they stand in the three-level program (see the Android screen in the lower right below).

Both features are must-haves. But the on/off switch is brilliant both for its simplicity and value. And this tangible mobile feature/benefit likely to get talked about in the press and at the weekend barbeque. We are giving it an OBR Best of the Web award, the first of the year and 84th of all time (see note).

The City Bank of Texas mobile lineup (link, 23 Jan 2011)

Note:
1. Since 1997, our Online Banking Report has periodically given OBR Best of the Web awards to companies that pioneer new online or mobile banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important industry development. If anyone knows of other financial institutions offering a similar feature, let us know and we’ll update the post. City Bank of Texas is the 84th company to win the award since 1997 and the first in 2012. Recent winners are profiled in the Netbanker archives.

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American Express Serves Up P2P "Pay Me Back" on Ticketmaster

By Jim Bruene Posted on November 21, 2011
Categories: American Express, Credit/Debit Cards, P2P Payments

It’s a problem as old as money itself. The person making a purchase on behalf of a group inevitably gets stuck with a larger share as others “forget” to pay him/her back (note 1).

Two weeks ago, American Express launched a clever product tie-in on TicketMaster to help change that. After making a purchase, a prominently placed box suggests using Serve to “Get Paid Back.” Buyers are encouraged to use Serve to send money requests to friends for their share of the tickets. Given how social ticket purchasing is, it’s a great place to introduce P2P.

But there’s still the not-so-small problem of getting everyone signed up. Both sender and recipient must have Serve accounts. And while all transaction are currently free, the FAQs warn that coming Jan 1, there will be a fee of 2.9% + $0.30 per transaction funded via credit card. Checking account (ACH)-based transactions will remain free.

To beat PayPal at this game, the service needs more than just well-placed ads. For example, integration directly into the Ticketmaster shopping cart, where buyers could enter friends’ email addresses to automatically “charge” them their share (subject to their approval of course).

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Product placement after purchasing on Ticketmaster (11 Nov 2011)

Landing page

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Note: We covered P2P payments two years ago in our Online Banking Report (subscription).

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Square Updates its Merchant Platform

By Jim Bruene Posted on November 15, 2011
Categories: Advertising & Promotion, Credit/Debit Cards, Square

In 15+ years of accepting credit cards, there have been few notable communications from our acquiring bank or payments gateway, other than normal transactional messages (note 1). Square looks to be changing that with a focus on merchant (and end user) experience.

For example, today I received an email outlining Square’s latest platform enhancements (see first screenshot). The message included an enticing Open for Business with an invitation to watch a 70-second video outlining enhancements to its merchant platform, including built-in rewards capabilities (note 2).

The company has grown quickly. Basically starting at zero at the beginning of the year, they are now doing up to $11 million per day in card volume. More impressively, they are up to 800,000 merchants. Assuming a $65 to $70 average ticket, that’s around 150,000 transactions per day, or 4 to 5 million per month. But that also means the average merchant is only doing 1 transaction every 5 or 6 days.

And the user experience is far from perfect. Square has suffered growing pains as it learns to manage a business fraught with fraud and uncertainty. We tried to use Square at Finovate last May and couldn’t get transactions authorized, apparently due to tight account limits in force then.

Four months later at FinovateFall, most transactions were authorized, much to the delight of attendees who used it. But unbeknownst to us (note 3), the money just sat in the Square account waiting for us to confirm our bank account. One small test-transaction had been sitting there since May.

Bottom line: The company flat-out does a great job with design and UX, very Apple-esque. I expect to see a lot of innovation out of Square given its funding, valuation, and celebrity founder. The promise of turning transaction receipts into a dynamic communication is especially interesting (previous post).

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Email from Square (received 1PM Pacific, 15 Nov 2011)

Landing page (not logged in; link)

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Notes:
1. It could be that I’ve simply forgotten messages received years ago. But I can say for sure that there have been very marketing/customer service messages, because I pay attention to them. My acquirer is not one of the major players.
2. TechCrunch has a good rundown of the new features.
3. In fairness to Square, they did mention on the merchant receipt that we needed to verify the bank account. But during the heat of the conference, I never noticed that. Click on inset to see the company’s transaction receipt (highlighting mine).
4. I wonder what it will take to convince Japan’s Square-Enix Holdings, creator of Final Fantasy (video game) to part with the Square.com domain name (which is currently unused).

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11/11/11 Promotion at Notre Dame Federal Credit Union

By Jim Bruene Posted on November 11, 2011
Categories: Advertising & Promotion, Credit/Debit Cards

Today is a big day for number nerds (note 1), as 11/11/11 makes its once-per-century appearance. So last night, I started looking for banks or credit unions using the date for a price promotion (note 2). With U.S. interest rates hovering around the 1% mark, I figured it would be pretty easy to find financial institutions offering CD specials at 1.11% APY, hopefully the 11-month variety.

But after googling for at least an hour, I came up empty. I found a few 1.11% APYs for longer-term CDs, but no one that was promoting it as a Nov 11 special. I was about to give up, but tried “1.11% discount” and up popped Notre Dame Federal Credit Union going all in on the 11/11/11 theme.

The home page (below) features a huge ad for its 1.11% APR holiday loan of exactly $1,111. And can you guess the term of the loan? Yep, 111 days! Thank you NDFCU marketing dept, you rock.

Fine print: There is one small catch. To get the loan, members must apply for and be approved for the credit union’s Visa Platinum card (presumably you can still get the holiday loan if you already have the CU’s card). So it’s really a credit card promotion in disguise, but that seems fair. It’s a good price, and allows for a little expansion of the holiday budget, but with the discipline of a loan that must be repaid before April tax time (note 3).

The offer is good through the end of November. And the loan application can be made online.

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Notre Dame FCU hits all 1’s on its homepage (11 Nov 2011)

1.11% loan landing page (link)

Notes:
1. I’ve been one for a long time. When I got my first calculator, I pressed “+1” on it 111,111 times just to fill the screen with 1s, the hard way.
2. Most U.S. financial institutions are closed today for Veterans Day, making it less likely to have a special one-day promotion.
3. Members also have the options of rolling the balance onto their NDFCU credit card at the end of the term.
4. Digital clock image from UK’s Daily Telegraph which had a 9-hour head start on the day.
5. Other 11/11/11 news:
– NY Times looks at 11/11/11 promotions
– DealerTrack marked the day with a press release about hitting the 1,111 lender milestone.
– The only promotional email I received using the day was from Starwood hotels (see inset)

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Capital One Driving Mobile Use with Sweepstakes

By Jim Bruene Posted on November 9, 2011
Categories: Advertising & Promotion, Capital One, Credit/Debit Cards

Boosting mobile engagement has a promising ROI. Among other benefits, the potential $6+ saved per displaced call center inquiry can have a meaningful impact on the bottom line (note 1).

And while volumes are growing, Capital One says mobile usage is up 5-fold compared to last year, it’s still a lightly used channel compared to phone (voice) and online.

Yet, for a card issuer, mobile is THE most important channel for the NFC/Square/GoogleWallet future.

So it makes a ton of sense to pull out the stops now to get customers using the bank’s mobile app. Capital One in particular, as one of the last majors to get into the app store, likely has an awareness problem with mobile cardholders. Even if the CapOne native app was downloaded, it’s buried so deep on the iPhone’s screens, that users forget about it. In my case, it’s on screen number eight and I rarely see it even though I use my card almost every day.

To attract more mobile uptake, the card giant launched a usage sweeps today. Between now and Jan 6, each cardholder will get one sweepstakes entry every day they log in to the mobile app or mobile web (SMS activity does not appear to count). One person will win a 16GB Wifi iPad2 each day. And a grand prize of a Chevy Volt will be awarded at the end (full rules). The total prize package is $80,000, less than the cost of one 30-second spot on an about-to-be-cancelled sitcom.

The sweeps is being promoted with a small homepage link and a prominent mention on the main mobile banking page (see second screenshot below).

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Capital One mobile sweeps landing page (link, 9 Nov 2011)
Note: The call to action, text “power” to 80101, was not working in my test.
Update 10 Nov: Fixed

Main mobile banking page (link)

Notes:
1. Of course, you also have to put in place a mobile channel strategy that actually does displace call-center inquiries. That’s easier said than done. Also, financial institutions paying mobile vendors for each active user, may not want to boost mobile usage in this way.
2. Despite the name of our subscription newsletter, Online Banking Report, we cover mobile issues almost every month.

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Credit Karma Launches "Hands Free" Account Aggregation

By Jim Bruene Posted on November 7, 2011
Categories: Credit Karma, Credit Reports & ID Theft Protection, Credit/Debit Cards

Everyone likes the idea of an online PFM, but relatively few will take the time to enter the necessary account numbers and passwords. Fewer still will keep it running smoothly by coming back periodically to update passwords, provide security question responses, and so on. That friction means it’s not benefiting as many people as it could.

But Credit Karma removes the friction, at least on the credit side, with its latest feature, My Accounts (see first screenshot below; see fourth screenshot for today’s email announcement). The startup parses credit bureau data to automatically present each user with an aggregated look at their debt over time. The service requires ZERO account info from the user, they simply sign up with Credit Karma to get free credit report info.

Historical data is captured each time the user updates their credit info at Credit Karma. Since it’s new, there’s just a single data point on my account (see second screenshot).

To earn advertising and referral income, Credit Karma integrates card offers into My Accounts with a Recommended Cards tab in the tertiary navigation (third screenshot). Cross selling is also woven into other areas as well (first screenshot). Credit Karma also covers home loans, auto loans, and personal loans. Each has their own tab in the secondary navigation.

The company has 3.5 million registered users and is adding 500,000 every quarter.

Bottom line: Keeping closer tabs on debt has huge benefits for many households. Credit Karma’s "no data input" method makes it easier. The last remaining hurdle is integrating the data into online banking so it’s not forgotten (see UW Credit Union post).

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Credit Karma "My Accounts" (7 Nov 2011)

Balance history is tracked for each card
Note: Only one data point, since this was my first time using the new feature

Integrated offers drive revenue

Email announcement of new feature

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Note: We’ve have written a number of reports on PFM and related issues in our subscription service, Online Banking Report.

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