Citibank Credit Cards Coming to the iPhone Nov. 1, Powered by Firethorn

image Firethorn (owned by Qualcomm) has a new iPhone app called Mobile Banking for AT&T Customers. The app is currently ranked number eight in the finance category of the Apple iTunes App Store (see screenshot below). Of the transactional services, only PayPal and BofA’s Mobile Banking are higher.

Firethorn iPhone app (27 Oct 2008) The application can be used to access online banking at any of the ten financial institution holding companies, and their subsidiaries, currently supported by Firethorn:

  • 1st Bank (Colorado)
  • America First Credit Union
  • Arvest
  • BancorpSouth
  • Caroline First
  • Mercantile Bank
  • Suntrust
  • Synovus
  • USAA
  • Wachovia (now owned by Wells Fargo)

The Firethorn application has 27 reviews so far and has scored a 4-star average (out of 5), much better than the typical finance app (see previous coverage here). The main complaint is lack of coverage for the user’s bank, which is not the fault of the app.  In comparison, Bank of America’s app garnered 434 reviews and a 2.5-star rating.

I downloaded the application today and, unfortunately, I don’t have an account at any of the financial institutions; however, that will change next week if they hit the dates contained in the Featured Providers page.

Here are coming-soon financial institutions:

  • Citi Cards (Citibank) “coming Nov. 1” (previous press release here)
  • Chase Bank “coming soon”
  • Regions Bank “beginning this fall”

Firethorn Mobile Banking on AT&T in Apple iTunes App Store (27 Oct 2008)

Centrro Launches KnowBeforeYouApply.com

image Providing free credit scores in exchange for viewing a credit card offer seems like a reasonable value exchange (see note 1). That’s why we gave Credit Karma our OBR Best of the Web award in August and why it is on stage next week at Finovate (see previous coverage here, video at Finovate Startup here). 

It’s also no surprise that others would try the same model. Credit crisis or not, credit-worthy borrowers are still a valuable commodity. Case in point, Bankaholic’s recent acquisition by BankRate for a reported $15 million, or $50 per unique visitor (Mashable post here).

imageThe latest entry in free-credit-score lead generation is KnowBeforeYouApply (KBYA) from Centrro, a financial-search company founded in 2006 by Ike Eze and Tuyen Vo. Eze was a founder of QSpace, an OBR Best of the Web winner in 1997 when it became the first company to make credit reports available online (archived OBR article here). QSpace was acquired by Experian several years later.

KnowBeforeYouApply launched on Sept. 3, but was put on the map with Mr. Eze’s post today in The Huffington Post entitled, “Stay Away from Me, Credit Card Crisis” (see note 2). The article discusses the value of tracking your credit score and using that knowledge to find the best credit offers. Eze mentions his company along with Credit Karma, Quizzle from Quicken Loans, two other Finovate presenters, Mint and BillShrink.

Using KnowBeforeYouApply.com
It would be difficult to make the site any easier to use. Customers type in their name, address, email address, and last four digits of their social security number. Apparently, that’s all that’s needed to access your credit file and return a letter grade of A through F.

The whole process takes about 30 seconds (there is no need to enter an entire social security number), and KBYA steers clear of those pesky out-of-wallet authentication questions. Users can get an update of their credit grade every 90 days. In comparison, Credit Karma, which provides an exact 3-digit credit score, will update it daily if the user so desires.

KBYA also has a simple and intuitive sales platform. Just two offers were highlighted in the main screen, one from Chase and one from American Express (see first screenshot below). However, clicking through to “see all offers” led to 25 pages of credit cards, displayed five to a page (121 total for A-grade credit). A handy index along the sidebar allows users to find various categories that most appeal to them such as “travel rewards” or “0% intro rate” cards (see second screenshot).

KBYA appears to use the API from CardOffers.com to build a portion of its database of card offers. CardOffers.com offers its affiliates up to $20 per application or up to $160 per approved application. KBYA also appears to be an affiliate of Credit.com and Discover Card (see note 3).

The site is focused solely on credit cards for now. But a Home Loan tab is built into the user interface, with a “coming soon” label.

Analysis
All in all, it’s a good service. The site needs to beef up its FAQs, About Us, and other educational materials so users can better understand who is behind the service and what exactly the credit grade means. But as a month-old beta service, it’s presumably coming.

While I prefer the precision and peace of mind of seeing my actual credit score, a letter grade every 90 days will be sufficient for many users and should help keep costs down. And the speed of the application process and lack of social security number are real benefits.

Financial institution opportunities
Banks, credit unions, and card issuers should consider offering similar functionality both inside online banking, where private info would already be known, and on the outside where prospective loan customers could use it. With info about the customer’s credit grade, lenders could deliver tailored offers that could lead to increased application volume and approval rates. See our recent Online Banking Report for more info on lead generation sites (note 1). 

Know Before You Apply main page after login (7 Oct 2008)

Know Before You Apply homepage (7 Oct 2008)

KnowBeforeYouApply all-offers page (7 Oct 2008)

Know Before You Apply all offers page (7 Oct 2008)

Notes:
1. For a thorough discussion of the topic, see our August 2008 Online Banking Report on New Models for Lead Generation.

2. Strangely, the article doesn’t specifically disclose Mr. Eze’s affiliation with Know Before You Apply, although clicking on his name does show he’s CEO of Centrro. However, it’s left to the reader to discover on their own that Centrro is the parent of Know Before You Apply. Hopefully, that oversight will be corrected.

3. The affiliate relationships
are inferred from the redirects that take place when clicking on the Apply Now arrow.

4. This is one of the ten online finance companies that launched in Sept. (post here).

Visa Announces Android and P2P Mobile Initiatives

image Visa today put a stake in the ground to be viewed as the innovation leader, a position that American Express has claimed for some time with its chip cards, social media efforts, and even an online lab site. At today’s “innovation briefing” in NYC, Visa announced several pilots and upcoming initiatives.

Mobile person-to-person transfers
The most far-reaching announcement was the ability for Visa cardholders to transfer funds from one card to another via mobile device. So far, just one bank is participating in the pilot. US Bank says it will make the service available to a few thousand cardholders as a test later this year. PaymentsNews has more details here.

It sounds good, but as always the devil is in the details. For instance:

  • Through what hoops will cardholders have to jump to enable their card and phone for the service?
  • Will the transfers be treated as cash advances triggering fees and finance charges?
  • Will it be available to all cardholders using any mobile phones? 

Visa jumps on the android bandwagon
A more immediate innovation is a location-and-alert-based service built for Google’s android platform, a new mobile system launching in late October. Visa’s new service, to be rolled out initially by Chase Bank (no time frame given), promises some important new developments:

  • “Near real-time” purchase alerts (see note 1) so you can see immediately whether your server added an extra digit in front of your tip on that bar tab. The real-time alert pilot was announced a month ago (here) involving several thousand accounts at PNC Bank, SunTrust Bank, US Bank, Wachovia, Wells Fargo, Royal Bank of Canada, TD Bank, and Vancity.
  • Visa merchant finder based on your location-based/GPS technology  (nice!) with targeted marketing offers (hmmm??). The merchant locations will be integrated with Google Maps.

Again, PaymentsNews has the entire press release here.

Notes:
1. Visa says that the alerts will arrive “typically before (the consumer) leaves the store.”

2. For more information, see our Online Banking Report on Mobile Money & Payments.

My Best Interest Announces Rate Surfer from TechCrunch50 DemoPit

image In addition to the 51 companies chosen in advance to demo at TechCrunch’s annual conference, 120 more companies (note 1) are in the DemoPit. The DemoPit is an area outside the main hall where the companies that didn’t make the final cut to be on stage have a table where they can showcase their companies to attendees. And one lucky company, the one that collects the most tokens from attendees, will appear as company number 52 on stage in the last session tomorrow.

There were several financial services companies in the DemoPit Monday including Billeo, Expensify, and LoanKrunch. Today, there was just one, Rate Surfer from My Best Interest. Although the service will not go live until its debut at Finovate next month, the company today showed it to the public for the first time. It also added a downloadable demo program to its website if you want a sneak peek (note 2).

What it does
Rate Surfer is a credit card manager. It uses account-aggregation technology to import balance and rate data from all your credit cards. It then uses that data to help users initiate and track credit card balance transfers across their credit cards. Although not without rough edges still to work out, it could potentially save users hundreds of dollars in interest every year by helping them take advantage of transfer opportunities.

Main Rate Surfer page from its demo software (9 Sep 2008

image

Notes:
1. There are 120 total companies, but each gets just a 12-hour day in the DemoPit, so there are 40 companies each day. Although, the Monday companies were given an extra day due to a wifi outage that plagued the hall much of Monday. In addition to these companies, there were 33 exhibitor tables and 22 TechCrunch alumni with tables, including Cake Financial and last year’s winner Mint.

2. It’s a 67MB download.

Will eWallets Make a Comeback on the iPhone?

image Since the July opening of Apple’s App Store, we’ve been tracking the apps in the Finance category (see previous coverage here). But there are also several apps in the Productivity category of interest to financial institutions: the eWallets.

Ilium's eWallet for iPhoneThere are two wallets available in the U.S. iTunes store:

  • eWallet from Ilium Software: #46 in popularity in Productivity with a cost of $9.95 and rated 3.5 stars (out of 5) across 143 reviews (see inset)
  • Memengo Wallet: #48 in Productivity with a $0.99 cost and rated 4 stars across 43 reviews (website)

Web-based eWallets never took off because of security concerns and because they provided only marginal improvements in desktop productivity. However, a mobile version has more utility owing to sticky notes with password reminders and credit card info, helpful to users away from their desks.

How it works
Storage of usernames and passwords for websites is the primary use of eWallet, but it also has a Finance category (see inset above) where users can store credit card numbers and contact info (see screenshots below).

That info is helpful when using a card to make a purchase online or through the mobile phone. It’s also a great place to store the info in case the card itself is lost or stolen.

Financial institution opportunities
While these apps haven’t gained an overwhelming following, a financial institution could offer a free version that highlights its own card offerings while providing storage space for other card numbers. That way, you get your logo on the iPhone instead of Mint, Wesabe, or some other financial institution. 

The bank-branded eWallet could also include a financial calculator and direct connection to online banking.

Ilium iPhone eWallet showing credit card info    eWallet showing credit card detail

 Note:
1. For more info see our Online Banking Repot on Mobile Money & Payments.

Could Mobile Payments Get a Boost from Lowly Stickers?

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. 

Stealth Finsphere Corp Lands $10 mil for Mobile Transaction Verification Services

imageLast week, the Puget Sound Business Journal reported on a Pacific Northwest stealth startup that’s receiving a lot of attention from Silicon Valley, at least measured in dollars. The $10 million round for Finsphere is an impressive endorsement, especially given the apparent involvement of prominent VC Mohr Davidow.

There’s not a lot we know about the company other than the founders are out of the wireless industry, and the company’s services are described as “location-based transaction verification services.” That sounds like using the GPS-based or triangulated location of mobile phone users to authenticate card transactions and/or online banking logins. Armed with the GPS reading, card companies would know that you (or at least your mobile phone) are where your credit card activity says you are, e.g., buying a tank of gas in Washington D.C.

With GPS capabilities coming to the iPhone next month, this could be a very large market indeed. If we are right about the product, we’ll try to convince the company to demo at one of our Finovate conferences. 

American Express Plum Card Update

As promised in its teaser print buy, American Express delivered my Plum Card invitation in the wee hours Monday morning (2:06 AM Pacific time, see screenshot below). The message, with my first and last name in the salutation, was short and sweet and directed me back to the main website to apply at <plumcard.com>.

It's all first class work, but the generic call-to-action surprised me a bit since I'd put my name on the "wait list" last week (see post here). I expected a more personalized invitation and link. The website doesn't appear to recognize me either (see screenshot below).

Email Invitation (1 Nov 2007)

American Express email invite for Plum Card 

Plum Card homepage (5 Nov. 2007)

American Express Plum Card homepage

American Express Plum Card Uses "Scarcity Marketing"

As a financial services junkie, I've long been a fan of American Express (see note 1). During the past 20 years, as credit cards increasingly became a commodity with no annual fees, loss-leader teaser rates, and look-alike marketing, AmEx has done a superb job maintaining a premium image and pricing. I keep my Gold Card in my travel bag and use it once every year or so when I don't want to expose the numbers of my business MasterCard. But I would never cancel it, despite the $75 annual fee, or I'd lose my "member since 1989" status. That, my friends, is what brand loyalty is all about.

The latest product designed for small businesses, those with "6- or 7-figure revenues," is the Plum Card. I learned about it in a 2/3-page full-color burgundy ad in yesterday's Wall Street Journal (Oct. 31, p. A11). An identical ad appears today (Nov. 1, p. A10). Its standard teaser fare tells readers that the "application releases in 5 days" (today, 4). The bottom of the ad contains a special URL, <PlumCard.com> where prospective customers can get more info. The card was originally announced at an INC 5000 event Sep. 7 (see coverage here).

After seeing the print ads, I and another 100,000 people headed to Google to see what was going on. Wisely, the company purchased not only the top spot on Google for "plum card," but also supported the print buy with an additional twist, "Who's getting a Plum Card? Initial release of 10,000 cards." The novelty of a new financial services product with limited availability, a technique AmEx has used for years with Platinum/Black, should attract click-throughs.   

The landing page (here) continues the theme of anticipation and exclusivity, with get this, a WAIT LIST, to be one of the first 10,000 to receive the card. A countdown timer in the upper right lets me know exactly how much time I have to wait, in this case 3 days, 11 hours and 6 minutes. If I'm not mistaken, that's Sunday night at midnight Eastern time.  

I'm on the wait list, so I'll let you know what I learn on Monday when I receive my application.

Plum Card pricing
There's no argument the marketing is first class, but what about the card itself? Is there anything that AmEx or anyone can do to distinguish themselves in the crowded field of business charge cards?

Time will tell, but it has a unique cash flow and discount plan that could be very appealing to business customers. Users that pay their bill within 10 days receive the industry standard "net less 2%" discount (see note 1). Alternatively, users can pay just 10% of the total due and defer the balance for two months interest free. At that time, the balance is due in full. There is no information in the terms and conditions about an annual fee, but I'd expect one.    

Notes:

  1. If my wife would have been willing to move to NYC, I'd have tried very hard to get a job there after completing my obligatory MBA. 
  2. The 2% discount applies on spending of $5,000 or more; otherwise, the net-10 discount is 1%.

Advanta Creates Social Network Around Small Business Innovation: Ideablob

I don't know how I missed this one, but Advanta, a major credit card issuer with 1.2 million small business customers, launched a new Web 2.0 microsite on Sept. 24 at the high-tech DEMOfall conference (press release here). Just being there amongst the digerati was a coup for the card issuer, but they did much better, managing to come home with a coveted DemoGod Peoples Choice trophy at the conference.

The Web 2.0-laden site is called ideablob, and it's a place where entrepreneurs, inventors, and anyone else can post their business idea and compete for the monthly $10,000 prizes (contest rules here).

One month after launch, the site is generating a fair amount of activity. The eight October finalists showcased on the homepage (see below) have received the following: 

  • 691 total votes (must be registered to vote, can vote on more than one idea)
  • 216 total comments (must be registered to comment)
  • 10,300 total views (anyone can view the idea)

Traffic to the site should grow rapidly once word of the $10k prize circulates. That's a large incentive for the millions of Internet users who think they have a better idea. 

Advanta, which uses fairly subdued branding on the site (see small "inspired by Advanta" under the main ideablob logo), is positioned to gain in three ways:

  • By associating its brand with innovation, social networks, and a Web 2.0 attitude
  • Assuming a good viral kick, and $10k/mo should do it, the site could generate leads more cost effectively than through other channels
  • Publicity in blogs and traditional media

Bank of America launched a good business networking site recently, but without the fun of the $10,000 in prize money (see previous coverage here).

Advanta's ideablob main page (25 Oct 2007)

An idea page

Anatomy of a Webpage: Citibank Business Credit Card

In terms of website design, I find most Citibank pages to be somewhat busy. But overall, the pages usually work well due to the eye-catching graphics, appropriate use of colors, and good copywriting.  

I've had a Citibank Business AAdvantage credit card for at least a decade. Even though I don't visit the site often, maybe once every few months, I find that it's generally easy to find what I'm looking for. 

As you can see in the business card example below, the bank uses purple and green "buttons" to catch your eye, then inserts important key words within them to drive action:

  1. The purple, "Fraud is not your fault" reinforces that customers are not liable for unauthorized transactions, something most people are still concerned about, even though their liability is minimal. The button leads to a page that discusses advanced fraud fighting tools such as virtual account numbers and a picture card.
  2. The navy, "How much have I spent lately?" allows users to quickly drill down into a key area of concern for most card users. Although not as powerful as Wells Fargo's My Spending Report (previous coverage here), it's still a good starting point for many users.
  3. Finally, the bright green, "Help prevent an identity crisis" pitches the bank's credit monitoring solutions (note 1).

Citibank Business Credit Card main account overview page (22 Sep 2007)

Note:

1. For more information on bank and credit union opportunities selling credit report monitoring see our most recent Online Banking Report.