Amazon.com Shoppers Prompted to Select Discover Card as Default Payment Option, with a $1 Million Carrot

image A few months ago, American Express provided five free song downloads as incentive for its cardholders to make Amex the default card option within the iTunes store (previous post).

Today, I noticed Discover offering an eye-opening incentive to get their card listed as the default option for one-click purchases on Amazon.com:

A chance to win $1 million every time you pay

This offer is part of the year-long Discover Everyday Giveaway usage sweeps. 

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Discover Card’s $1 million promotion on Amazon.com (12 Aug. 2011)
Note: A small ad first appeared in the upper-right part of the screen, this is what it looked like after I chose “Expand”

 Discover Card's $1 million promotion on Amazon.com

How it works (link)
Note: This screen presented when clicking on “Learn more” from above banner

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Account Alerts: Discover Card Helps Users Visualize the Options

image We are approaching the 15-year anniversary of the first retail banking account alert. Britton & Koontz Bank was the first to offer them in the summer of 1996 (note 1). But alerts didn’t become widely available until a few years later. 

Back then, you’d be lucky if you had three or four different alerts to choose from. And of course, there was no such thing as a mobile alert.

Today, banks and card issuers offer a dozen or more alert types capable of going to multiple email addresses, multiple mobile devices, or even to your land-line via voice message. Consumers are better served overall, but the wide range of options can be confusing.   

One solution is to use default selections. Users can select their preferred profile, and the bank establishes a set of recommended alerts. This profile selection could be made during online banking registration. For example:

  • Normal alerts
  • More alerts
  • Less alerts

Another helpful practice is to show examples so users can visualize what they are signing up for. Discover Card uses this technique in its card-management area with popups that show both the email and text-message version of each alert type (see screenshot below).

Alerts are a vital part of online and mobile banking, so take time to educate users on the appropriate mix (note 2). It’s also a great topic to cover in your blog or Twitter feed. 

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Discover allows users to review samples of each alert type (28 April 2011)

Discover Card allows users to review samples of each alert type (28 April 2011)

Notes:
1. Signet Bank was the first major to offer email account alerts. We covered it in OBR 22 (Feb 1997).
2. For more information on alerts and messaging, refer to this Online Banking Report published in 2003.

Discover Card Pushes Paperless with $30k Sweeps after Login

image Getting customers to go paperless is not easy. That’s why only 15% have enrolled even though more than three times that number pay the bill electronically. 

Discover Card is working to change that with a well-executed sweeps. The graphics are impressive (see below) and the dollar amount ($30,000) is enough to get your attention. But what I really like are the three benefits of going paperless listed at the bottom of the screen:

  • View online statements 3-5 days earlier than paper
  • Get an automatic email reminder 6-7 days before your payment is due
  • Access and download up to 24 months of password-protected statements

Analysis
While this is a great effort (Grade = A), I think Discover would be better off dividing the prize pot into ongoing monthly prizes for anyone who is paperless. That reinforces the behavior over time.

Also, I’d add one more benefit to the three listed above:

  • Go back to paper statements with a single click if you ever change your mind

Customers want control of their statements (and payments). So even if they agree to full automation, they need to understand that it’s easy to reverse directions even if few will.

Discover Card interstitial (splash page) when logging in to an account (12 Feb 2011)

Discover Card interstitial (splash page) when logging in to an account (12 Feb 2011)

Landing page

Discover card paperless statement signup

Confirmation screen

Discover Card confirmation after signing up for paperless statements

Side note: On my relatively new account (started in December), Discover prompts me to complete my profile.

Discover Card prompts to complete profile
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Note: For more information and examples of login/logoff marketing, see our Online Banking Report: Selling Behind the Password (April 2009).  

PayPal Announces a Slew of Developer Tools and Two Major Banking Partners: USAA and Discover Financial

After seeing The Social Network and reading yet another post about the ramifications of Facebook’s ubiquity, I sent this out via Twitter last week:

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Today, the “PayPal dial-tone” got louder with the launch of a handful of new initiatives at the company’s second annual developer’s conference in San Francisco (which drew 2,500):

  • PayPal for Digital Goods: Two-click checkout for low-value digital goods eliminates the hassle of logging in
  • PayPal Embedded Payments: Pay without leaving the merchant’s app
  • PayPal Apps: Allows companies to embed applications into the PayPal website: Finovate alums Credit Karma, Expensify, and Bill.com are participating
  • PayPal Business Payments: Electronic payments (non-credit card) of any size for just $0.50 per transaction 
  • PayPal Mobile enhancements:
    — Express Checkout provides similar two-click process
    — VeriFone integration
    — v3.0 iPhone app

Unless you are a developer, most of those programs mean little to you other than it’s obvious that PayPal is really pushing on the gas right now. But the banking alliances revealed today are quite interesting, assuming they make it to market:

I’m sure there will be much speculation on whether these powered-by-PayPal services will disrupt payments, or even catch on for that matter. But it’s clear that PayPal has made important new alliances in the banking world. The dial-tone appears to be catching on, even with the establishment.   

Update: More context on these announcements from Russ Jones, Glenbrook Partners, here.

Discover Card’s User-Generated Card Design Contest

image Personalized card designs have been offered by Capital One and others for years. But I’ve yet to see the idea turned into a contest. Discover Card is running a promotion for the best design submitted through its microsite or Facebook page.

The winner will pocket $1000 and the design will be featured on the next Discover Card Student Card. There is also another $1000 split among five runner-up designs.

To enter the contest, users must log in at the Discover microsite using Facebook connect (see screenshot #2, below). After creating the design, users end up on a Facebook page where they can provide optional personal information (screenshot #3). 

The promotion is powered by the Graffiti Facebook app.

As you can see by my handiwork (inset), most card designs are pretty crude. But there are also some pretty creative entrants. There is only one design tool available, a brush you run with your mouse. The only variations are color, brushstroke width and opacity. No uploads are allowed, so you cannot add any fancy graphics created in other apps.

The contest ends tomorrow and so far there are nearly 5,000 entries. 

Bottom line: It’s a drop-dead simple contest with excellent Facebook integration and a link to apply for Discover’s Student Card. It’s a great idea, with good execution, and the card issuer will end up with a cool new card design for a relatively small cost. Grade A+ 

Thanks to Payments News for the link.

1. Discover Card microsite (31 Dec. 2009)
Note: Homepage showing the 10-most recent entries with our lame effort in the lower-right.

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2. Discover Card design creation page

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3. Facebook optional personal info page

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4. Designs appear on the Discover Facebook page under the Graffiti tab (link)
Note: Considering the crude input tool, some of the designs are amazing. As you can see, I will not be in the running for prize money. 

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Cash and Cards Are Both Endangered Species

Right around the corner is a world with neither cash nor payment cards. Contactless payments mechanisms—built into cell phones or even jewelry—are helping create this world, and the result will help change banking, thinks Theodore Iacobuzio, managing director of Tower Group’s executive research office.

The reality is that companies that once fed the banks’  payment networks—merchants, for instance—will be future competitors. But banks shouldn’t panic about this, any more than when, not so long ago, the Internet was supposed to be extinguishing banks. And banks won’t be disappearing now, either, thinks Iacobuzio: the anxiety over banking’s future, so prevalent in boardrooms around the country, is overdone.

Continue reading “Cash and Cards Are Both Endangered Species”

Mobile Payments: Japan Leads the Pack

The potential of cellphone-based mobile payments to eventually squeeze banks out of their central role in payments can already be seen in East Asia, says Andrei Hagiu, a principal at Market Platform Dynamics, and by ignoring it, American banks have nothing to lose but their business.

Octopus_cardHong Kong’s Octopus prepaid debit card (see inset) is one example: Issued by Hong Kong’s subway system and several other transportation companies—with no bank involved—Octopus cards drive about $2.2 billion in annual payments volume.

Continue reading “Mobile Payments: Japan Leads the Pack”