Merry Shopping

If you were looking for an argument that would allow you to skip contactless cards and go straight to mobile payments, look no further.  It seems that enterprising people are really using RFID readers to steal credit card information as people walk by.

Here’s how RFID works: when the card reaches a certain distance from an electronic scanner or card reader, it sends a signal which is received by an antenna embedded into the card, which is connected to the card’s RFID chip, thus activating it.

Criminals are able to do the same by walking close to your wallet or purse. A hand held chip reading device can easily steal your credit card information if someone walks by you or inches close enough to you.

You can read more here.

There’s Gotta Be A Better Way

I hate Walmart.  Actually, I hate waiting in line at Walmart.  Nothing frustrates me more than seeing half the lines open, the “10 Items or Less” lines being ten people deep and the other lines with people doing their monthly Walmart shopping while I hold five items.  The self-checkout lines are empty because they either aren’t working or it’s just too complicated to figure out.

Why can’t the big box retailers have a better checkout system?  With the Apple Store opening here, I was reminded of how Apple handles checkouts.  The employees carry those neat wireless devices with a card reader so that the process is quick and painless.  The big box retailers have almost everything in place to offer a similar experience.

I have noticed that they have price scanners mounted for anyone to use.  It would be great if I could scan my item and then wave my customer loyalty card to add the item to my “shopping cart”.  Once I had walked around the store and finished scanning my items, I could then wave my phone or contactless card to pay.  Finally, they could email the receipt to me and send a confirmation SMS so I could get past that pesky greeter.  Having a receipt printer on the scanner wouldn’t be a bad idea either.

If Money Goes Digital, How Will You “Floss”?

Floss (verb) – To show off, especially things of high value

Ex. Once he got the new iPhone, he couldn’t help but floss.

While watching a special of Yo! MTV Raps, the other day, I was hit by a sudden thought. If money gets to the point where it is only exchanged digitally, how will people “floss”? For example, I always thought it would be cool to walk into a car dealership with a briefcase of money and purchase a luxury vehicle. Or better yet, dine at an expensive restaurant and impress my date by pulling out the ol’ money clip and peeling off some Benjamins ($100 bills).

As I’ve gotten older, I see that carrying around large wads of cash can be extremely unhealthy. Also, the bulky look isn’t in and a briefcase full of money is just cumbersome. Besides, debit card usage has gone way up. It is also highly convenient, as pointed out in the Visa commercials. Unfortunately, using a debit card isn’t very sexy.

Whipping out the ol’ debit card just doesn’t have the same je ne sais quoi as pulling out a stack of hundreds. Showing off that American Express Centurion (Black Card) does raise some eyebrows. Amex even got some free publicity from rappers, such as Jay-Z and Bow Wow.

Moving forward, the 35 and under crowd is who the financial services industry is targeting for contactless payments, mobile payments and mobile banking. I think they could help the adoption along by making it sexier and more of a status symbol if you use contactless/mobile technology. We all know that the masses want what celebrities have. We also know that hip hop sets most of the trends.

If I were a mobile banking vendor, I’d consider getting my name mentioned by a rapper or other celebrity. Having them perform a mobile transaction in a video wouldn’t hurt either. The same goes for showing a transaction in a movie. Most of us thought the Black Card was an urban myth until rappers started showing them off. Now it’s an incentive to get your credit score and income up or floss by using ideas like this.

Who’s Your Targeted Customer?

Contactless cards, mobile banking, personal financial management software, FaceBook applications. All of these can be great for the financial services industry and a lot of people are trying to figure out the best way to leverage them. The question is, who are you providing these services for?

Have you actually sat down and had a group session discussing your plans for these new services? Or is it more like a 3 year old, wanting what big brother (competition) has? There seems to be a lot of “me-too-ism”, mostly because of fear. “If the big boys have it, we have to get it also in order to compete.”

Whether that is true is open for discussion, but if you do decide to follow the leader, do you have a plan? As an example, let’s take mobile banking. Most FIs fall into one of two categories: 1. Let’s be a first mover in the market or; 2. Let’s see what problems the first movers have and which channel (SMS, WAP, client app) wins out.

The biggest problem for adoption that I see is, no one is talking about how to market this new service. Yes, statistics show that 99% of people in the world have a mobile phone. Yes, even your grandmother knows how to “txt her bff”. Yes, Asia, Europe, and Africa have mobile payments, which is growing daily by leaps and bounds.

But for some reason, I don’t think your customers really care about the statistics. Better yet, do you have any idea what your customer wants? A couple of weeks ago, I overheard two couples talking about our bank and one was trying to access our online banking on his Blackberry. When I finished my meal, I went over and introduced myself. I told them that we were looking at mobile banking and explained a little of it to them. When I finished, I asked if it was something they would be interested in. Both couples said yes and the one with the Blackberry said we could sign him up ASAP.

We’ve also done a survey with our retail and commercial online banking customers. The responses matched up with what consultants, such as Javelin, have been saying. However, it all boils down to how we offer this service.

Honestly, I don’t think most of our older customers would be interested in mobile banking. Unfortunately, we also have an older customer base. But if we marketed mobile banking to the younger crowd, we could bring in brand new customers. Since we have a few local colleges in the area, I think that’s a good plan. This age group also “lives” on their cell phone and would most likely be open to “on-the-go” services.

We’re all trying to grow our customer base. But instead of buying new technology and just fitting it into your current customer base, think about how it can benefit you in other ways. Before you just add that new service all willy-nilly, you need to have a plan. As the saying goes, “Those that fail to plan…”

Contactless Cards In SC

Well, it looks like we were beaten to the punch. First Citizens is the first South Carolina based bank to roll out contactless cards. My employer is looking at offering this also so we’ll be keeping tabs on First Citizen’s success. Personally, I’m a little hesitant to use contactless cards. I’d rather be forced to use my PIN to at least verify that the card was used by me.