Tag Archives: bank of america

Mobile payments leader must provide value to consumers and banks

Screen Shot 2015-04-01 at 8.23.55 PMI remember being swept up in the early Foursquare craze. I raced around my little town checking in at my local Starbucks and favorite lunch spots to become The Mayor. I worked hard to keep it by doing drive by check ins as I was stuck at traffic lights. I know, I’m hyper competitive on certain things. Friends and I would compete on who could win the most badges too! I quickly earned the “jet setter” badge with frequent flights from SJC to SNA. Other friends won the “crunked” badge with late night shenanigans. Ahh to be a DINK again. All for what? For pure competition and Facebook feed bragging rights!

At a deeper level, I hoped that eventually I’d receive relevant geographically based alerts and rewards on my phone as I walked by a restaurant or store. Unfortunately, many of these rewards required an AMEX card subscription (creating a HUGE hurdle) or were nothing more than a free drink at check in. Big whoop. Sigh…it was very clear that geo based local marketing had not made the jump from great concepts to effective execution. However, this is all changing quickly with the launch of mobile payment solutions like Apple Pay and well designed retail loyalty mobile apps. Real customer value can be delivered at the right time. Banks can also make HUGE strides in building more meaningful customer relationships beyond checking accounts. FINALLY!!!!!

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My family and I are loyal Safeway customers for the majority of our food. The loyalty was solidified by Safeway launching a program that contained several weekly coupons and special offers based on shopping activity. A key component of the loyalty program is the Safeway mobile app which serves as the main touch point for how offers are communicated to consumers. Just recently, Safeway has pushed daily offers that appear on the front scream of my mobile device. Last week I made a special trip into Safeway’s deli to take advantage of a sandwich offer that was delivered to my phone that morning. Cool. There are several other retail apps, Starbucks for example, that deliver this customer value in a similar way. All of these apps have a way to go on using geo fencing technology to send me offers as I’m nearby or actually in store. Clearly this will be coming!

I mentioned in a previous post that I recently completed my first Apple Pay transaction at Sports Authority. It took me 6 months to actually do this after I loaded all of my cards. Honestly, I forgot to use Apple Pay and struggled with finding locations that use it. I opine in my last post that Apple Pay must do a lot more to remind users that “Apple Pay is Accepted Here” to drive adoption. Steps are being taken to do so for I saw an Apple Pay logo appear on a Walmart payment terminal as I purchased Easter cards.

So where do banks fit in creating greater customer value? Apple Pay requires that customers enter in debit cards and credit cards to make payment. Banks provide these cards. Banks frequently offer rewards programs and provide an incentive to shop a designated retail location. By not actively engaging in this payments ecosystem, banks are LOSING OUT BIG TIME on engaging with customers in a meaningful way with relevant, geo targeted offers.

Screen Shot 2015-03-27 at 3.15.25 PMFor example, let’s say a consumer is using a Wells Fargo bank card for Apple Pay. The consumer pays for items at Walmart that is a member of Well’s Earn More Mall program. The consumer is then informed that they receive double points and are reminded of other Earn More Mall retailers that may be geographically close by. How powerful is that for Wells to influence consumer purchase decision and drive usage of its cards?!

Unfortunately, this type of consumer influence will not be available to banks through Apple Pay. Apple has decided to not share consumer purchase data with card providers/banks. Clearly Apple is looking to own the consumer relationship AND control the valuable behavioral data. However, given the amount of marketing activity driven by banks, especially Wells Fargo, this seems a little one-sided of Apple…giving room for a competitive payment platform that helps consumers AND banks. Banks need to use their power to guide the creation of a payments ecosystem that builds deeper customer relationships.

As we all know, Android OS based Samsung announced the acquisition of LoopPay as their digital payments platform and competitive solution. It would not be surprising if the Android OS based Samsung phones enable banks to access purchasing data to banks and provide the channel to communicate special offers. For a fee, of course. Apple and Samsung need to be reminded of the power banks have in the transaction process. Banks provide the cards! Strangely, BANKS need to be reminded of the power THEY have in influencing the payment ecosystem. The larger banks like Bank of America and Wells Fargo, have enormous power. At the current moment, banks are willing to draft on the success of Apple Pay.  Wells Fargo even promotes their Apple Pay features in TV commercials.  Cleary banks see value in positioning themselves as “cutting edge.”  However, this affiliation is purely brand driven and not consumer value drive.   If a bank can be promised greater access to consumer data AND direct access to consumers through the device, banks will drive great consumer value while promoting new technology.  Because of the consumer value focus, banks will promote one payments solution over another…and mean it.

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Apple Pay is great but I will still need to carry my wallet

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I have to admit that I was GLUED to my computer screen this morning during the Apple announcement. It still blows my mind that technology and bandwidth can’t deliver a smooth online feed to a live event. What was up with the live translation feeds being clearly audible to online viewers? ANNOYING! Fortunately the live stream technical team saw the multiple tweets and fixed the problem.   Unfortunately my viewing experience was very choppy and I got word of the announcement in real time more from Twitter.

As predicted, Apple entered BIG into payments with Apple Pay and into wearables too with Apple Watch too.  Apple’s recent announcements around partnerships with Visa, Amex, MasterCard etc were clear leading indicators of the entry into payments. I am very excited about Apple’s payment system and how it will help drive mass consumer adoption of a true mobile wallet. Yean! However, we are a ways away from Apple driving mass adoption of their wallet.

Screen Shot 2014-09-09 at 4.14.30 PMApple Pay will be available on the iPhone 6 and Apple Watch devices for it requires technology included only in this hardware. Yes, the iPhone 6 and Apple Watch will set sales records and proliferation will be fast across the globe. However, Apple Pay will not be available on legacy devices that will slow down the adoption rate. Additionally, Apple Pay will be limited to major retailers including Whole Foods, Macy’s and Toys R Us. Yes, over 200,000 stores will be accepting contactless payments through Apple Pay. I’m sure Apple is busy negotiating partnerships with several other major retailers as well and the footprint will grow even more.

Apple Pay will not be available to stores outside of this Apple negotiated big box retailer network. Consumers will not be able to truly leave their wallet at home. Apple’s partnership with IBM, though, will help Apple Pay expand its footprint to more business….but it will take time. As I mentioned in a previous post, the IBM partnership provides Apple access to many banks and financial institutions. These FIs have business banking customers and frequently provide merchants with POS payment systems. Now that the iPhone 6 includes the NFC chip, Apple will be hot to engage IBM on pushing the distribution of NFC enabled payment terminals to their banking customers. Only until NFC enabled payment terminals are more widely distributed will Apple gain ownership of the mobile wallet.

Clearly Apple has the hardware, technology and strategic partnerships to create the closed loop necessary to build a ubiquitous payment system. It’s a matter of time before this happens. However, NFC technology and devices are not Apple technology and can be easily licensed by competitors. Yes, Apple has leap fogged into the lead on building a mobile wallet, but the competition did see this coming. Apple must continue adding nationwide retailers to their network to enable consumers to use Apple Pay. The first mover advantage will be key and the network affects will take hold. If a competitor is to provide another offering for consumers and merchants, they better act FAST. Samsung and Loopt I’m sure are having lunch right now.

On a side note, I am amazed by the level of talent Apple employs for their advertising and marketing efforts; JT, Jimmie Fallon and U2. A list talent meets A + list company. I’m sure Apple pays a large portion of the marketing budget for these names. Or maybe it’s vice versa! Let this be a reminder of the high margins Apple receives on every product they sell. Impressive.

 

 

 

 


Mobile must remain a priority for large banks to retain customers

My family and I received several checks from family members as gifts and as payback for gifts purchased.  My wife typically handles the day-to-day checking account and generally handles making deposits at the nearest Wells Fargo ATM.  I suggested that she try using the mobile deposit feature on the Wells Fargo mobile application.  Being the wife of someone who works in FinTech, she agreed to try out the feature….despite all the negative feedback about the application. Unfortunately,  she successfully validated the negative comments splattered across iTunes.

The biggest disappointment came through the application crashing after each attempt to deposit a check using the mobile deposit feature. What I found most interesting were my wife’s comments after the 3rd attempt. “Well, Wells Fargo, I guess you REALLY don’t want me to use this feature,” was the first comment.  The second comment was “What happened to the pics of the checks I took before the app crashed? Are they stuck in the app or are they with Wells?  Can someone steal the money?”

Three interesting thoughts came to mind as I digested her valid complains.  One, when it comes to getting customers to try new features that involve their money, banks better be sure the feature works for the customer the first time.  Yes, app crashes can happen for many reasons.  Unfortunately, several reviews reflected the same frustration and experience my wife had…which implies that improvements need to be made to the application. From my wife’s point of view, Wells Fargo implicitly told her mobile deposit is not ready for prime time and to keep using the ATM.  Wells needs to track that these customers are and target them with a “mea culpa” CRM program to win back their trust with new technology. After all, according to a recent study, 49% of consumers will change banks for a better mobile experience.

Secondly, I think my wife’s concerns about where the check pictures have gone after the application crashes point to an engrained reaction that stems from frequent e-commerce transactions.  I think similar “where’s my money now?” concerns come up when a consumer enters in a credit card number online, presses submit and the site crashes. “Did my credit card go through? Do I need to re-enter my credit card? If I do, will I get double charged?  Is my card number safe?”  All are common questions following an e-commerce site crash.  I think it’s only natural for my wife to ask similar questions after a mobile banking application fails.  In-application messaging must be delivered immediately to consumers to quell their anxiety when things don’t go as planned.

Lastly, the low application star rating and poor review indicate that mobile is NOT a big priority for Wells Fargo. In an effort to win customers, I would imagine that the mobile team would quickly iterate and redeploy an application as quickly as possible. Unfortunately, Wells Fargo is not the only major bank that appears less focused on winning customers through mobile.  Chase and Bank of America have similarly low rated mobile applications. If these major banks do not step up their focus on mobile, the door will remain WIDE OPEN for innovative mobile banks like GoBank and Simple to entice customers through compelling mobile banking experiences.


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