Best of the Web Archives

Best of the Web: Frost Bank Launches Actionable Two-Way Debit Card Alerts

By Jim Bruene on May 19, 2014 5:17 PM | Comments

imageFrost Bank is cool. The $25 billion regional bank has long been an innovator, pushing forward on multiple digital fronts (see notes 1, 2). Its latest innovation quietly rolled out to customers at the beginning of May, is the two-way actionable debit card alert. This service probably seems like a no-brainer to customers, especially those born after 1990, but it's not at all easy for an FI to pull off.

imageWhile Frost is not the first to position alerts as a two-way communication channel (note 3), it is the first to allow customers to simply reply back to a text message to freeze their debit card against further charges. The action also triggers a call from a Frost banker to resolve the situation.  

Because this "raises the bar" for proactive customer communications around debit card use, we are awarding it our first Best of the Web for 2014 (note 4).


How it works now (v1.0)

image1. Consumer establishes alert thresholds and preferences (inset)
2. Bank sends triggered text-message alert
3. If the user suspects fraud, they reply back with the code provided in the alert (screenshot below)
4. Frost puts a temporary hold on the card
5. Frost banker calls customer and resolves (customer can also unblock account on their own)




What's next (v2.0)

Frost Bank's new feature is a great customer-centric solution that reinforces the bank's position of consumer advocacy. It's a perfect first step to a more proactive fraud-warning system.

But I do have some concerns there will be too many false alarms generated. It is so easy to forget pre-authorized debits; be surprised by charges made by your spouse; or legitimate, but strange-sounding merchant names.

Ideally, there would be a way to first ask for more info on a charge, rather than a black or white hold. It would be great to text back "huh?" and get a plain language explanation of the charge, for example:

  • This charge was made at 1:00 PM at the Subway near Northgate Mall. Are you sure you or someone in your family didn't buy lunch there this weekend?


  • You began paying $9.95 per month to this merchant in February. This merchant markets a subscription music service. Did you, or anyone else in your family, start a subscription to it in the February timeframe?

BillGuard offers quite a bit of this "explanation layer" on card transactions, another reason to be looking at what they are doing (most recent post).


Frost Bank's debit alerts landing page (18 May 2014, link)



1. We first covered Frost in 2005, when it was offering lifetime statement archives at a time when most banks dropped your data off the site after a few months (June 2005 post). We also loved their PFM-ish Momentum checking account launched in 2008, about the same time as Mint launched (July 2008 post). 
image2. Earlier this month, Jeffry Pilcher called Frost Bank "... one of the most beautiful brand identities ... ." (see right, post)
3. In 2010 (post), Chase Bank won Best of the Web for its 2-way text-message alerts; however, that was limited to initiating funds transfers through its normal text-banking service.  
4. This is the first OBR Best of the Web for Frost Bank. Since 1997, our Online Banking Report industry newsletter has been periodically giving 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. In total, 91 companies have won the award. Recent winners are profiled in the Netbanker archives.


Capital One Launches SureSwipe for Gesture-Based Mobile Login

By Jim Bruene on November 11, 2013 7:32 PM | Comments


One of my pet peeves is mobile banking login. Entering an 8-character alpha-numeric password is clumsy and security overkill for 99% of mobile sessions. Four-digit passcodes used at Simple, Mint and others is a good compromise, but then you have yet another password to remember.

I've been especially envious of the no-login, read-only services from Southern Bancorp, Commonwealth Bank (Australia), Bank of the West, Westpac (NZ), City Bank of Texas, Barclaycard and others.

While none of my financial providers has done away with the password entirely, Capital One just rolled out something pretty close, a password substitute that uses a pre-set gesture on the touchscreen to log in (see screenshots below).

I updated my Capital One app (v4.3) over the weekend and am happy to report that it worked as promised. It takes less than a second, and due to its uniqueness, it's incredibly easy to remember (that probably changes if everyone started using various gesture systems). It's currently available only on the imageiPhone, but it's going Android in 2014.

Bottom line: While I think the bank needs to expand its explanation of the new feature (see note 2), it's a fantastic development for the mobile experience. And we hope it spurs more innovation on the login front. As a result, SureSwipe is receiving our OBR Best of the Web award, the third for Capital One (archives; note 3).  

How it works

1. At login, users are asked if they want to start using SureSwipe. If so, they press the "Create Your Pattern" button.


2. Users create their login pattern by running their finger between the nine dots. A minimum of four must be used and a few simple patterns are not allowed.


3. The gesture is verified by repeating it, then confirmed by the bank.


4. Users have the option of turning it off or resetting the pattern. To change the gesture, users must enter their existing alpha-numeric password.


5. At login, users are presented with this screen.
Note: There is an option for alpha-numeric login (bottom left) and pattern help (bottom left).
















1. Capital One SureSwipe landing page (at top of post)
2. I'm a little surprised the bank didn't address security concerns on its landing page or within its app. There is no "learn more" when the option is first presented to users. I was super excited to see it, but I'm not sure normal users will be so understanding. I think many will have questions about how secure a pattern is compared to a normal password.
3. This is the third OBR Best of the Web for Capital One, all since 2010, when the card issuer began to really push digital distribution. Since 1997, our Online Banking Report industry newsletter has been periodically giving 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. In total, 90 companies have won the award.  Recent winners are profiled in the Netbanker archives.


Square Cash Nails P2P Payments

By Jim Bruene on October 18, 2013 2:23 PM | Comments

image It's been six months since we handed out an OBR Best of the Web award (archives; see note 1). Since then, many new enabling technologies and promising applications were launched. But with every passing year, it gets harder to raise the bar with a new digital financial product.

image But Square did it this week. The company took P2P payments -- which PayPal commercialized in 1999 (see last screenshot below) and CashEdge/Fiserv bankified in 2009/2010, and which Google simplified in May -- and distilled the payment scheme to its essence. Just email money directly (via debit card) from any client, web, mobile, tablet or any other email-enabled device (or from the Square mobile app). No third-party accounts needed, no login, no challenge questions, no selecting your payment method, no navigating various fee structures. Just send payment like you would any other email by adding a cc to Square. 

And amazingly, neither the sender nor recipient need be preregistered with Square. All it takes to send or receive small amounts ($250/week) is a U.S. based MasterCard or Visa debit card number, expiration date and ZIP code (see third screenshot; note 3). And once you've entered that the first time, you can literally send a P2P payment in two or three seconds (assuming you were already in your email client).

It's hard to imagine P2P payments being any simpler. And Square is doing it all for free.

The biggest hurdle, as Walt Mossberg pointed out in the Wall Street Journal, is trust. The system is so easy to use, that it almost doesn't seem possible. The other limitation is that users can register only one debit card per email address. There is no way currently to substitute a different card.



Since this is Square (fintech's Apple), the design is gorgeous and the user experience is outstanding (Jim Marous breaks it down here). But the pundits are scratching their heads a bit about why the company launched a service with negative margins (note 4) that isn't solving any major consumer headache and is disconnected with its consumer wallet and Square Register-acquiring business.

I think they are doing it to get millions of debit cards registered with their service. Then when new customers show up at a Square merchant, the company will try to switch what would have been a credit card transactions over to debit. This could potentially save gazillions in interchange, especially when debit price controls are expected to lower the interchange into sub 10-cent-per-transaction territory. 

But how they accomplish this integration is still a mystery. The company is so far silent on the end-game for Square Cash. 


Financial institution opportunities

Since Square is paying interchange to debit card issuers, financial institutions should be neutral about this service (note 3). Sure it takes P2P payments out of your control, but if your debit card is linked to the service, it increases usage. For those with a fee-based P2P offering such as POPmoney, Square Cash is a competitor, but with its transaction limits and other consumer uncertainties, it's not on equal footing and initially shouldn't be a huge threat.

In fact, banks and credit unions might consider integrating Square Cash directly into online/mobile banking. A script could write the payment email and send it directly from online/mobile banking. The primary drawback would be the confusing email confirmations from Square and the initial debit card signup on the Square page (screenshot #3), so it would take some customer education. But once customers got through that, it could be a minor profit center (see caveat, note 4).


The simplest P2P payment process in the world

Three steps:
1. Choose email address from contacts (or type in)
2. CC
3. Type amount in subject line

Note: A message in the body is optional. It can just as easily be left blank.


Square customer announcement (2 PM, 17 Oct 2013)
Note: In this email to an existing Square Wallet customer, the company pushes users to download its new standalone Square Cash app


Signup/application process (webpage)


PayPal "beam money" interface at its 1999 launch (15 Nov 1999)



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. In total, 90 companies have won the award. This is the first for Square. Recent winners are profiled in the Netbanker archives.
2. In a Quora post, Brian Roemmele estimates Square pays between $0.10 to $0.25 per transaction to MasterCard or Visa and Chase, its acquiring bank (and Square investor).
3. Recipients can also deposit directly into a bank account if they don't have a debit card.
4. It should be a net positive to the bottom line, unless there are unintended consequences, such as customer support or increased fraud.
5. For more info on peer-to-peer payments (P2P), see our Online Banking Report issue devoted to the topic (Dec 2009, subscription).


Feature Friday: Capital One 360 Offers Remote Check Deposit via Simple File Upload (no smartphone required)

By Jim Bruene on March 22, 2013 1:16 PM | Comments

image I don't know how I missed this small, but meaningful, improvement to the remote deposit state of the art. Since last April, Capital One 360 (formerly ING Direct) has allowed customers to make deposit via the mobile phone app, and (drum roll) via file upload.  

Yes, you heard it right. Simply snap a picture of the check (front and back), save the files, upload to CapOne360, and your deposit is complete (see screenshot below). That means check deposit is available to everyone, not just those with smartphones or scanners.

Does that mean more work for Capital One operations? Sure, processing an uploaded .jpg will take more time. But for the relatively low deposit volume of its savings-account-heavy base, it's probably not material. And the idea here is to get more deposits, not save on transaction costs.

Will there be more fraud? There will likely be more garbage (duplicate pictures, fuzzy images, and perhaps even a few suspicious attempts to deposit duplicate images). But will file uploads create a statistically significant amount of actual fraud losses? It seems unlikely, though I'm making an educated guess.

image Bottom line: The decision to accept any old .jpg was brilliant. Make it as easy as possible to do business with you. That's been a driving force behind ING Direct's success (that and the bouncing orange ball, RIP).

While it's not going to make our Digital Banking Hall of Fame (note 1), it's important enough to grab a belated OBR Best of the Web for "raising the bar" in remote banking (note 2). Nice work.


Capital One 360 landing page for its CheckMate remote deposit service (22 Mar 2013)

Capital One 360 checkmate remote depost landing page

Step 1: Users must enter check amount ($) and which account to deposit to (and optional memo)


Step 2: Interim instruction page


Step 3: Agree to the terms and conditions



Step 4: Choose images for front and back of check
Note: Example images, since I didn't have any checks on my machine


Step 5: Review images & click "Deposit Now"



1. The Digital Banking Hall of Fame is updated annually and published in our year-end Online Banking Report (subscription).
2.  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. In total, 89 companies have won the award. This is the second for Capital One (previous winner). ING Direct also won previously. Recent winners are profiled in the Netbanker archives.


First Financial, US Bank Launch First Photo Billpay Services

By Jim Bruene on March 7, 2013 5:17 PM | Comments

imageI started this post Monday, before I knew US Bank would be making headlines today as the first "major" bank with photo billpay. I got that news last night, when I updated my US Bank iPhone app (see inset).

But First Financial Bank (Abilene, TX; $3.7 billion deposits) actually imagebeat US Bank ($235 billion) to market by more than a month with its 22 Jan 2013 launch (press release; YouTube video). The bank said it had 12,000 bill uploads during the first 10-days of availability.

 US Bank mobile photo billpayBoth services use the Mitek engine to read the image and handle the OCR work. But First Financial also uses Allied Payment Network to process images that don't get properly digitized on the first pass and Malauzai Software for app development. 

Like remote check deposit, the system will improve over time as it learns the nuances of the thousands of billing statements fed into the front end. But today, there is still work to be done on the minority of statements that don't read correctly (see note 1).

First Financial features the new service front and center on its homepage (see first screenshot below) with a clever:

Tell your bills to say, "Cheese."

US Bank has no mention of it on the front page (nor in site search), but if you navigate to its mobile banking page, you can't miss it (third screenshot below).

image Bottom line: I'm not sure how many people will ultimately use photo billpay (though First Financial seems to be off to a good start). It's an interim technology until we can convert the country to ebills.

But since that may be a decade from now, using your smartphone to snap-and-pay is the best answer for now. So, we are bestowing our first OBR Best of the Web of 2013 to First Financial  for raising the bar in remote delivery (notes 2, 3). And an honorable mention to US Bank for getting it out to a broader market.  


First Financial features its new photo billpay on its homepage (6 Mar 2013)

First Financial Bank homepage featuring photo billpay powerd by Mitek

First Financial landing page (link)

First Financial Bank landing page for photo billpay

US Bank's mobile page features photo billpay prominently (link)

US Bank mobile banking page featuring photo bill pay


1. Just today, the Chase ATM couldn't read the amount on a computer-generated check we fed into its deposit slot. So we had to manually add.    
2. This Best of the Web goes to First Financial since it was first. Mitek already won when it introduced the technology in 2010 (see our Online Banking Report on Paperless Banking (subscription).
3. 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. In total, 89 companies have won the award. This is the first for First Financial. Recent winners are profiled in the Netbanker archives.


Launching: KeyBank's "myControl Banking" Provides Balance Forecasting via Mobile App & Online Dashboard

By Jim Bruene on November 20, 2012 11:31 PM | Comments

imageKeyBank is launching a new online banking and mobile service called myControl Banking. The mobile app became available today in iTunes (link).

The service is centered around myMoney Forecast, a real-time balance forecast shown at the top of the screen (see inset below). It's a vital PFM function that looks a lot like Simple's Safe-to-Spend.

But there is one significant difference. Key Bank users can make the forecast more accurate by manually entering Money In or Money Out transactions before they clear the bank (for example, a just-written check, see bottom of first screenshot). The bank automatically nets out any pre-scheduled bill payments, transfers, or ACH items and adds in recurring regular paychecks and transfers in. 

Key Bnak mobile myMoney ForecastThe interface also includes a weekly cash flow calendar so users can monitor the flow of their funds. And up to five goals can be established and tracked within the app and/or online dashboard. 

The mobile app does not (yet) replace Key Bank's regular mobile app. Before using MyControl, customers must sign up for it within online banking.

Analysis: The introduction of MyControl Banking is a fantastic move. It delivers the key missing component of online banking, a peek at what's about to happen with cash flow, without making users slog through a bunch of PFM features they don't understand.

imageIt provides Key Bank with meaningful differentiation, and gives them a platform to add more PFM content in the future.

Because Key Bank's MyControl raises the bar in digital delivery, we are giving it our OBR Best of the Web award (note 2). We are also retroactively naming Simple as a co-winner since they commercialized a similar balance forecast earlier this summer.


Mobile checking & savings balance visualization with integrated transfer button (left) and goals (right)

Key Bank myControl Checking     KeyBank myControl Savings mobile

Key Bank myControl Banking landing page (link, 20 Nov 2012)



1. This post was developed from info available within the app, in the product video at and in the FAQs. But I don't have an account at Key Bank, and there is no interactive demo yet, so I haven't used the service with live data.  
2. 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. In total, 88 companies have won the award. This is the first for Key Bank and Simple. Recent winners are profiled in the Netbanker archives.
3. For more on balance forecasting and other advanced PFM features, see our recent Online Banking Report: PFM 4.0 (June 2012; subscription).


Mint Launches Mac App: Mint QuickView

By Jim Bruene on July 17, 2012 3:56 PM | Comments (1)

imageI've been a big fan of apps ever since I first pressed the weather button on the iPhone in 2007. After 12 years of, it was refreshing to just press a button and get the necessary information quickly, perfectly rendered and distraction free.

So I like Mint's latest move, putting a similar user experience onto the desktop (see note 1) with an app for the Mac (link) that provides a quick overview of balances, transactions and alerts (see email announcement below).

Once installed, Mac users simply click on the Mint icon on the top and/or bottom of their desktop, and it immediately opens to a display of the latest balance-and-transaction info. Like iPhone apps, the icon also shows the number of unread alerts on the badge (see first screenshot). 

Other novel features:

  • A search bar along the top of the transaction search
  • Optional password protection: You can choose to look at your data without logging in (after the first time)
  • Timed password protection: Users can select how long they can look at the data before the password prompt is shown  

I've used it for only a few minutes, but it looks like it will become my primary method of accessing Mint. Unless you need to run a report, it has most of what you need available immediately, shaving 30 to 40 seconds or more off the time to retrieve info from the full website version.  

image Bottom line: Mint is the first PFM or banking app to hit the Mac store, beating all the major financial brands to the punch. And it's been rewarded with "featured app" status which has propelled it to the very top of the Free Apps ranking in the Mac App Store (see inset above).

Because it raises the bar in the delivery of banking info, we are bestowing it with our fourth OBR Best of the Web award for 2012 (see note 2). 


Mint QuickView app pops up after clicking on icon along the top

Mint QuickView uses dropdown from top icon on Mac

Transaction search from top line

Mint QuickView features prominent transaction search

Net income view

Mint QuickView

Email from Mint announcing Mac QuickView
(16 July 2012)


1. We wrote about moving online banking info to the PC desktop in our Online Banking Report in 2002 (subscription).
2. 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. In total, 86 companies have won the award including Mint in 2007. Recent winners are profiled in the Netbanker archives.

Comments (1)

Westpac NZ Makes it Mobile Savings Transfers Easy with Impulse Saver

By Jim Bruene on March 20, 2012 8:42 PM | Comments

image There are two schools of thought when it comes to mobile app design:

  1. Put everything in a single app for each platform (note 1), so your customers aren't confused about which app to download
  2. Create specialized apps for various market segments and/or apps that focus on a single function

American Express (7 for iOS, note 2); JP Morgan Chase (3 for iOS); Zions Bank (3 for iOS); Southern Bancorp (2 for iOS); and a handful of other banks have launched multiple apps. But it's still the exception: More than 99% of banks have no more than one app for each platform. 

Westpac NZ has joined the multi-app group, though oddly it has yet to launch a full-featured mobile banking app (note 3). Yesterday, we wrote about Westpac's clever Cash Tank, that provides a no-login gauge to monitor account balances.

The bank has another cool single-use app, Impulse Saver, which is basically just one huge red button that users press to make a transfer from their checking account to a savings account.

obr_bestofwebThe amount of each transfer, from $2 to $50, is preset using the app settings (see second screenshot).

Bottom line: With Impulse Saver and Cash Tank, Westpac NZ has raised the bar for simple no-login mobile banking, earning an OBR Best of the Web (note 4).  

Westpac's Impulse Saver iPhone app (20 March 2012)

 image     image


1. By single app, we mean one app per major platform, i.e., one app for iPhones, one for Android, one for iPad, etc.
2. In addition, American Express offers at least six more content apps through American Express publishing.
3. A number of reviewers in Apple's App Store have been criticized for not having a full-featured app. For example, in June 2011 "crazfulla" wrote, "This is a great idea; however, we need a real app that has all the banking capabilities."
4. 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. Westpac is is the 86th company to win the award and the third in 2012. Recent winners are profiled in the Netbanker archives.


Cash Tank from Westpac NZ, a Mobile No-Login Balance Display

By Jim Bruene on March 19, 2012 6:10 PM | Comments (1)

image As mobile banking approaches its fourth birthday (note 1), we are starting to see the more interesting "version 2.0" builds from the major players. Last week, we looked at Commonwealth Bank's Simple Balance, with its pull-down balance option.

Customers don't want to spend more than a few seconds retrieving their balance when on the go, so the no-login option imagesignificantly improves the mobile banking user experience.

In response to that post, several readers pointed out the recently launched app from Westpac New Zealand unit. The app, Cash Tank, is an elegant solution to the same need. It's a full standalone app that does just one thing, shows the balance in the selected account on a "fuel gauge" (see first screenshot below). 

Users set their own high and low settings so the gauge could show empty when there is still a cash cushion remaining. And users have the option of showing the actual dollar amount available or simply relying on the gauge reading for more privacy. The Cash Tank can show the balance from just one account.  

Under the gauge is a link to the bank's mobile website where users must log in to conduct transaction. The bank does not currently offer a full-featured mobile app in New Zealand (note 2).

The app is available for iPhone and Android. 

Update Mar 20: We are awarding Westpac an OBR Best of the Web for its Cash Tank and Impulse Saver apps (Mar 21 post).

Update Mar 21: I neglected to mention that Southern Bancorp launched a no-login savings balance app a year ago called "Shake to Bank."


Cash Tank from Westpac NZ is a standalone mobile gauge to your account balance (link)

image           image    

Cash Tank is featured on the Westpac NZ homepage (21 Mar 2012)



1. The dawn of the industry, at least in the United States, was in July 2008 when Apple opened the iPhone to third-party apps. There were huge strides made around the globe, e.g. M-Pesa, much earlier. But we're referring here to the modern smartphone-based services.
2. A full-featured mobile banking app has been available to Westpac Australia customers since Dec 2008. But it does not offer the read-only Cash Tank option. 

Comments (1)

Commonwealth Bank's Kaching App Has No-Login Option, Simple Balance

By Jim Bruene on March 15, 2012 10:38 AM | Comments

imageThere are two problems with the current state of online/mobile login:

  • It's too hard for customers to log in to their own accounts, especially using mobile keyboards
  • Yet, it's too easy for crooks to log in to other people's accounts

Since the dawn of online banking, the industry has struggled to balance user experience with security. And tiny mobile keyboards make the login experience even more frustrating.

But it doesn't have to be that way.

A number of banks are using 4-digit passcodes making mobile login a breeze. But Commonwealth Bank (Australia) has gone one step further, with no-login pulldown access to account balances in its new Kaching (ka-ching) mobile app (note 2). 
(Update 16 Mar: New Zealand's Westpac also has a no-login mobile option called Cash Tank). 

obr_bestofwebCommonwealth calls the no-login option Simple Balance. With a quick swipe users pull down a read-only account balance (see screenshot below). The no-login option must be  enabled within the app before the first use. See it in action here (at the 29-second and 54-second marks).

We are awarding Simple Balance our second OBR Best of the Web award for the year (note 3). While it may not be as novel as City Bank's debit card on/off switch, it's likely to be used 100x more.

Bottom line: Requiring full username and password to see your account balance is antiquated, or at least it's rapidly headed that way. The four-digit PIN is a good first step. But ultimately, it needs to get even easier than that for low-risk activities (note 4).


A single swipe on the top of the Kaching app allows users to download their account balance (click to enlarge, see note 2)

Pull down Simple Balance on Commonwealth Kaching


1. Many thanks to Australian reader Saif Hazarika, Innovation Manager at Australia Post, for clueing us in on the Kaching feature and creating the illustration above.
Facebook integration into Kaching's P2P payments area2. The Financial Brand published a good overview of Kaching several weeks ago.
3. 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. Commonwealth Bank is is the 85th company to win the award and the second in 2012. Recent winners are profiled in the Netbanker archives.
4. USAA's "stay logged in" option is another promising approach, though not quite as user friendly as the Kaching swipe.
5. The Kaching app (inset, click to enlarge) includes integration to the user's Facebook friends to facilitate P2P payments. A cool feature that I will add to the 50 or so discussed in last month's Banking on Facebook report (OBR subscription).


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

By Jim Bruene on January 23, 2012 9:29 AM | Comments

imageCity 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).

imageBoth 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)

 City Bank of Texas mobile banking lineup

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.


PSECU's Remote Deposit Honor System Has Processed $1.4 Billion with Only $74,000 in Losses

By Jim Bruene on July 7, 2011 11:34 AM | Comments

image Sometimes the best ideas are the simplest ones. Ten years ago PSECU launched the Upost@home deposit service. It allows members to manually enter their deposits in the CU's online banking system for immediate credit, then mail them to the CU in a postage-paid envelope.

obr_bestofweb The service, launched in late 2001, was little publicized outside of PSECU's member base during the first two years. We first heard about it in late 2003 when a second credit union licensed the service. We gave it our highest honor, an OBR Best of the Web award (note 1), one of only five given during the post-bubble dark days of bank-tech innovation (2001 through 2004).

At the time, it seemed an almost crazy idea. An online/offline honor system for deposits. But the CU knew what it was doing. It limited the amount that could be deposited and which members were allowed to use the service.

Now the results speak for themselves (see annual totals in table below):

4.5 million items deposited worth $1.4 billion (avg. of $310 per check)
$74,000 in losses
= 0.0053% loss rate (0.5 basis points)
or 1.6 cents per item

Upost has turned into the least loss-prone method of accepting deposit, including the branch!

Another interesting data point: The CU is processing almost 50,000 Upost@home deposit items per month, about one per month per member enrolled in the service, a pace that's stayed remarkably consistent over time.

Bottom line: We've listed PSECU's Upost@home on our annual list of top online/mobile innovations of all time (it was ranked #24 of those invented in the past 10 years and #42 of all time). But in terms of "bang for your buck," it's probably in the top-5.


Source: PSECU, 5 July 2011


1. The original article published in Online Banking Report (OBR #103) is reprinted in the Netbanker archives here.
2. The list of top innovators was published in OBR #188.


Ally Bank Posts Real-time Call-center Wait Times on Homepage

By Jim Bruene on April 15, 2011 8:43 AM | Comments (1)

imageAlly Bank made news this week as one of the few major banks offering consumer PC/scanner-based remote deposit (USAA and US Bank also offer it, note 1). But that new feature has not yet filtered out  to its website. While disappointed in not finding what I was searching for, I did notice something even better:   

imageThe wait time for its call center, updated in real-time, right at the top of every page (see screenshot, below). 

The first few times I checked the site, it always said zero and I wondered if the bank left it permanently there to demonstrate its call-center prowess. But now the wait-time has moved out to six minutes (11 AM Pacific time on a Thursday...a couple days in front of the U.S. tax deadline).

But that's even more important for public acknowledgement. When wait times stretch to several minutes, customers can decide to call back later or spend a few minutes checking Facebook before a banker comes on the line. It also gives Ally's customer service department a big incentive to keep the queue at a reasonable level. It's a complete win-win.

The bank should also add a click-to-call feature so customers can skip the queue and simply request a call-back, a technique that can potentially cut support costs by shortening average call time (see note 3). Ally does offer live chat on its Contact Us page. However, it must be a lower staffing priority as I found intermittent availability on a Friday morning (8:30 AM Pacific) even though wait times for the call center were zero.

imageBottom line: Ally's real-time availability is so much better than simply plopping a smiling face in the corner of your website and inviting calls. The estimated hold time demonstrates the bank's respect for its customers' time, something rare at large consumer brands in any industry. It's a great tangible benefit to the "ally" positioning.

Because it raises the "state of the art" in online support, we are awarding it our first OBR Best of the Web for 2011 (see note 2).  

Ally Bank homepage with real-time call center wait time monitor (14 April 2011)

  Ally Bank homepage with real-time call center wait time monitor


1. Post updated at 10 AM: Originally I said the new Ally service was "mobile" remote deposit, Ally let me know that it was PC-based online remote deposit (previous post on US Bank's service)
2. Since 1997, 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. Ally is the 81st company to win the award since 1997 and the first in 2011. Recent winners are profiled in the Netbanker archives.
3. For more information on delivering "live help," see the most recent issue of Online Banking Report.

Comments (1)
Categories: Best of the Web, Service

New Online Banking Report Available: Online & Mobile Banking Forecast through 2020

By Jim Bruene on January 24, 2011 7:46 PM | Comments

image The latest Online Banking Report: 2011 to 2020 Online & Mobile Banking Forecast is now available. It was mailed over the weekend to all OBR subscribers. It's also available online here. There's no charge for current subscribers; others may download it immediately for US$495.

The report includes our latest 10-year online & mobile banking and bill-pay forecast. While our reading of the tea leaves is unlikely to be perfect, it seems clear that the demand for online banking in the United States has reached a plateau (note 1); in fact, we are likely within a year or two of online banking penetration peaking and slowly heading down.  

How could that be? Mobile of course. In fact, through the end of 2020, we project an increase of 40 to 45 million U.S. households using mobile banking, to a total of nearly 60 million. During the same period, online banking penetration is actually expected to drop by a few million households.

If we are right, sometime near the end of the decade mobile banking will surpass online (note 2), although by then, the two will look pretty similar. 

The report also includes a revised 10-year forecast for U.S. peer-to-peer lending. After more than doubling in 2010, we expect continued strong growth of around 40% compounded annually through 2020.


Top innovations & trends of 2010

The report includes a summary of the top ten innovations or trends during the past year (in alphabetic order):

  • In-statement merchant rewards goes from zero to 100 financial institutions
  • Loan preapproval wizards reduce uncertainty for applicants
  • Location-aware mobile services for banking debut
  • Mobile banking goes mainstream
  • Mobile capture removes the paper from commerce
  • Mobile payments gains real momentum
  • Online personal financial management (outside of the bank) struggles
  • P2P lending solidifies its niche
  • Social media proves it can have real impact in financial promotions
  • Transaction streaming and sharing gain a foothold


New entrants on the list of the top 43 innovations of all time

Each year we rank the top online/mobile innovations of all time (North America). There are a total of 43 products listed from 42 unique companies:

  • 15 banks
  • 5 credit unions
  • 9 non-bank financial services companies
  • 13 technology companies

The class of 2010, which was unusual for being all technology companies rather than financial institutions (note 3):

  • Blippy for its automated transaction-sharing network
  • Cardlytics for its merchant-funded in-statement online rewards service
  • Finsphere for its location-aware fraud-targeting service, PinPoint
  • Mitek Systems for its mobile photo bill pay


1. The penetration of online banking into U.S. households is relatively flat going forward. However, because each households accesses a larger number of financial accounts, growth at individual financial institutions is still growing on average.
2. Forecast is for the United States. Mobile has already surpassed all types of banking in some developing countries.
3. Perhaps this can be explained by the necessary focus of financial institutions on getting through the global banking crisis beginning in 2008.


ActivePath Named OBR Best of the Web for Email Banking System

By Jim Bruene on September 13, 2010 4:56 PM | Comments

obr_bestofweb In our most recent report, Email Banking: Revitalizing the Channel, ActivePath was named the third OBR Best of the Web winner in 2010. The company was cited for its unique plugin software that turns the user's email inbox into a mini online-banking center.

We believe that the future of banking information delivery is outside the website. Increasingly, users will rely on information pushed to them through Facebook, Twitter or RSS feeds, to mobile phone apps, and to the email inbox. ActivePath's solution plays into that trend.

The just-launched Israeli startup becomes the 78th company to win the designation since we began awarding it in 1997. The other two winners this year:


Note: OBR Best of the Web awards are given periodically 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. Recent winners are profiled in the Netbanker archives.


Best of Web: Chase Launches Instant Action 2-Way Text Alerts

By Jim Bruene on June 3, 2010 9:30 AM | Comments (2)

imageobr_bestofweb It's been 13 years since email bank-account alerts first appeared in the United States (see note 1). And for 12.99 years, users have wished they could just reply back to the message to cover a checking account shortfall. 

Well finally, Chase Bank has delivered on that promise with real-time Chase Instant Action Alerts:

image    image

Chase account holders now receive real-time text-message alerts when their account drops below preset minimums. Customers can initiate funds transfers by texting back transfer instructions. Currently, transfers can be initiated only via text message.

While we would have been more impressed if the service covered the more common email alerts, the new feature does move the online/mobile banking state-of-the-art up a notch. That's enough to earn Chase the second OBR Best of the Web awarded in 2010 and the 77th all-time (notes 2, 3).

The bank is promoting the new feature via Google AdWords (see screenshots below). And, they've done a good job identifying the key benefit in the landing page title:

Avoid Overdrafts | Chase Instant Action Alerts

I don't see any mention of the new capabilities on the Chase homepage today, nor does it appear to be touted within online banking (note 4). However, a site-search for "alerts" drives users to the landing page shown below.

Advertising on Google search for "Chase email alerts"
(2 June 2010, 9 AM from Seattle IP)


Landing page (link)
Note: The top graphic is animated, showing how the alert and reply work (see images at the top of this post)


image 1. Signet Bank was the first major to offer email account alerts. We covered it in OBR 22 (Feb 1997). We didn't learn until a few months later that community bank Britton & Koontz actually beat Signet to market with alerts launched in the summer of 1996.
2. You could argue that Chase is not first with this capability. The handful of U.S. text-banking programs that support transfers are already offering the same capabilities as Chase (for example, see text commands at Natco Credit Union).  However, Chase is the first major bank to provide the functionality, as well as the first to really promote the reply-back function as a major benefit.
3. OBR Best of the Web awards are given periodically to companies that pioneer new online/mobile banking features, products, or enhancements. It is not an endorsement of the company or product, just recognition for what we believe is an important development that "raises the bar" in alt-delivery. Chase's Instant Action Alerts are the 77th recipient since we began the awards in 1997. It's the second for Chase. The bank also won in 2007 for being the first major U.S. bank to roll out text banking. For a list of the top innovations of all time, see our January 2010 Online Banking Report.
4. It was not mentioned within my business banking account or consumer credit card account. I don't have a Chase consumer checking account.
5. For more information on alerts and messaging, refer to this Online Banking Report published in 2003.

Comments (2)

PNC Virtual Wallet Redefines the Online Banking User Experience

By Jim Bruene on May 22, 2010 9:00 AM | Comments (1)

image I have been using my new PNC Virtual Wallet account for a week now (previous coverage of the application process). The account takes a novel approach to core online banking and money management. Honestly, the user experience is so different, I’m still digesting it.

I think I love it, but I want to make sure it’s not just the novelty I’m attracted to. And that it really makes sense for users to interact with their bank accounts this way. I cover the PFM/OFM features in the most recent Online Banking Report and will publish a complete analysis in the future. But <spoiler alert>, I’ll reveal the account’s secret now.

Calendar view.

PNC did not invent the calendar approach to tracking finances. Most of the OFM/PFMs and online banking platforms we’ve had on stage in Finovate during the past three years, eg. Mint, Fiserv, Metavante, Intuit and others, have it. 

But Virtual Wallet (VW) defaults to calendar view. And they don’t let you change that. If you are a VW user, you will be managing your finances in calendar-flow mode. The designers took a risk here, but I think it pays off. They are targeting younger users, who have not grown up viewing reverse-chronological transaction lists, so why not train them from the get-go in how to manage the past, present, and future on a single page.

The first time you log in, the software asks when you get paid so it can add those happy events to your cash-flow calendar. Then as soon as you start making transactions they show up on the calendar along with your current balance in a blue bar at the top of each date (see screenshot below). Also, future events such as bill payments, are shown on the appropriate day to keep you from overdrawing your account.

It’s a good way to see what’s happening. But it also seems like a little more work. Like I said, I’m still evaluating the user experience tradeoffs here.


The Pig
image As much as I enjoy exploring the big-picture ramifications of this new user experience, the real reason I finally opened a VW account is for the pig. Maybe it’s the Iowa boy in me, but I’m a sucker for pigs.

VW has a cute feature, admittedly aimed at somewhat younger customer than your typical banking industry analyst, that allows you to make a checking-to-savings transfer by punching the pig graphic at the top of the screen (note 2). And the oinking sound, followed by a the cash register, kaching, punctuates the transfer perfectly.

But it was a little annoying to have to confirm each punch with a popup window asking if I really did want to send $1 to my savings account (see note 1). How about just building an undo button to protect those who get a little carried away clicking that little oinker (see the pig in the upper right in screenshot).  

1. Users can change the default transfer amount so that punches are equal to more than $1. 
2. Users can customize the look and sounds their pig makes. I switched mine to an orange flame motif, which I’m not sure my farming ancestors would approve of.
3. We awarded PNC’s Virtual Wallet with an OBR Best of the Web in our recap of the most important innovations of 2008 (OBR here).
4. For more on adding appropriate online financial management (OFM) features to your online banking offering, see our latest OBR published just yesterday: Online Financial Management 3.0.

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PNC Bank's Virtual Wallet Offers Three Ways to Put Your Savings on Autopilot

By Jim Bruene on April 6, 2010 5:15 PM | Comments

imageIf PNC Bank's Virtual Wallet, launched in July 2008 (previous post), worked with any bank account instead of just PNC's, it would have hundreds of thousands of users instead of the 60,000 or so estimated by Compete.

From the outside it's hard to know whether the strategy has paid off for PNC. It depends on the profitability of these customers, how many were new to the bank, and how much was invested in the effort. 

imageThe Virtual Wallet contains several superb products wrapped in an inviting user interface.  No wonder it's won so many awards, including an OBR Best of the Web from us. The eight awards are shown in a scrollbar at the bottom of the homepage (see inset).

One thing the wallet does better than most is try to make savings less painful or even fun (see last week's post about making banking fun). There are three ways users can boost their savings rate (see inset from PNC's demo):

  • imageEstablish automated savings transfers at various times of the month
  • Set up a savings amount to be transferred every time a bill is paid (same concept as Bank of America's Keep the Change)
  • And my favorite, Punch the Pig. Every time you hit the animated pig, a certain amount of cash is transferred to the Growth (savings) account.

: For more information on the PFM space, see our Online Banking Report on Personal Finance Features (new report available in April). For more on deposits, see Online Banking Report: Growing Your Deposits in the Digital Age (Dec. 2008).


Blippy Demonstrates the Power of Real-Time Streaming of Financial Transaction Data

By Jim Bruene on January 25, 2010 5:59 PM | Comments (2)

image Blippy has been one of the more controversial financial entrants in the past few years. Observers have called it the "end of privacy as we know it," a way to take "oversharing to a dizzying new level," and a "great tool for phishers." And those are just the people who like it.

Blippy, a kind of Twitter meets Yodlee service, allows users to stream their purchase activity to the startup's website. Users can choose to publish data from credit and debit cards, bank accounts, and/or directly from purchase activity at ecommerce-partners sites (see list below). It's the ecommerce transaction stream that provides the richest data describing the actual product purchased or rented rather than just a dollar total.

For example, here's an entry from @Julia who's connected her Amazon account directly to Blippy (note 1)  As you can see the Amazon purchases are shown in detail and one of the items, a giraffe teether, has elicited a question/comment from a friend (highlighting ours):


In comparison, credit card transactions list only the merchant name and not what was purchased. However, Blippy allows users to annotate their transactions to add that detail, as you can see in the following entry. 


One of the most common ways Blippy is used is to stream media consumption via iTunes and Netflix. Here are the three Netflix movies on their way to @crobertsjr:


The Palo Alto-based startup received a $1.6 million angel round in January 2010 from Ron Conway, Jason Calacanis, Twitter's Evan Williams, Sequoia Capital, Charles River Ventures, and others. 

How it works
I got my first taste of Blippy after it opened to the public on Jan. 14. It's simple to get started, calling for just an email address, screenname and password. You also have the option of finding friends using your email address book or choosing from a list of 13 suggested people including Blippy founder Philip Kaplan (@PUD) and interstar Jason Calacanis (@jason).

But you don't even need to register for Blippy to see it in action. There's a live stream on the homepage that anyone can watch (see screenshot below). If Blippy follows the Twitter/Facebook model, they will soon have an API available that will let outside developers tap the data stream.

Usage stats

  • Number of beta users: More than 5,000 who streamed $4.5 million worth of transactions
  • Most-streamed merchant: Netflix with 54,000 entries
  • Most prolific spender (that I ran across): Foo Bar (@foo), who does not identify himself other than CEO at a gaming startup, has linked his business credit card and streamed more than 350 purchases worth more than $300,000 (he's a big online advertiser at Google, MySpace, Facebook).
  • Most-followed user: Leo Laporte (@leolaporte), from the Premiere Radio Network, with more than 2,600 followers


Data sharing within workgroups:

  • Ability to share financial transactions within a family, a workgroup, or small business. It would be a great way for financial gatekeepers, e.g., the bookkeeper, CFO, or even board members/investors to keep tabs on company spending (see @foo above).
  • Ability to annotate expense streams. Users can add short descriptions to expense items so their followers can see the specifics.
  • Ability to discuss/comment on expense items. For example, CFO can ask "why did our Google AdWords expense spike yesterday?" and anyone in the group can comment back with an answer or speculation. We use Yammer in our company for this type of back and forth. 

Product research/social networking:

  • Ability to find other customers of the same store
  • Ability to discuss product or media purchases with friends or strangers
  • Ability to post positive/negative info about purchases (yours or others)
  • Ability to find previous purchasers of a product you are considering (currently not supported through search)
  • Ability to compare how much people paid for a certain item (not currently supported through search)

Personal financial management:

  • Ability to annotate expenses for future reporting (e.g., marking taxable items)
  • Store transactions free for as long as Blippy keeps the servers running
  • Ability to search own transactions

Financial institution opportunities
1. Card companies and banks should create similar sharing functionality for alerts; especially for small business clients. While public posting of purchase data may never have mass appeal, there are many private uses for real-time transaction data.

2. PFM's should be building this functionality now to get out in front of Mint/Intuit who could simply acquire Blippy and incorporate real-time data flow within weeks. 

3. Once the Blippy API becomes available, banks should tap it to allow their customers to use it directly from within online banking.

Whether Blippy lives on as a standalone service is difficult to predict. It depends on whether these capabilities are incorporated into other social networks, particularly, Facebook (note 2) and Twitter. And how fast card issuers move to make real-time transaction info easily available to their own customers.

image But regardless of where the company nets out, Blippy should be credited with pioneering real-time financial transaction flow, something every financial institution and ecommerce company will support in the coming years. As a result, we are awarding Blippy an OBR Best of the Web award, our first of 2010 and just the third in the past 14 months (note 3, previous winners).   

Blippy Homepage (14 Jan. 2010 7 PM Pacific)


 Optional sign-in to Gmail, Yahoo or AOL to locate friends on Blippy 


Purchases/activity at these merchants can be automatically tracked
Note: 13 ecommerce merchants currently participate (Amazon, Apple iTunes, Audible, Blockbuster, GoDaddy, GroupOn, Netflix, SeamlessWeb, Stubhub, Threadless, Wine Library, Woot, Zappos)


The Blippy real-time transaction stream
Note: You can choose to watch all activity or just that of the people you are following


1. If she hadn't given Blippy her Amazon login info and linked only her credit card, there would be no product detail. It would just show as $80.95 spent at Amazon.
2. Blippy is similar to Facebook's ill-fated Beacon service launched in Nov. 2007. The service was quickly toned down, then eventually dismantled, due to the privacy brouhaha that ensued. Blippy is very different because its users are signing up specifically to share purchase info. 
3. OBR Best of the Web awards, from Online Banking Report, are given periodically to companies that pioneer new online and mobile banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important development. Blippy is the 76th recipient since we began awarding it in 1997. There were just two winners in 2009.

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Happy 10th Birthday PayPal!

By Jim Bruene on November 19, 2009 12:45 PM | Comments (1)

image In preparation for our upcoming report, I re-read our first report on P2P payments published almost 10 years ago to the day (29 Nov 1999). Although written early in the game, I was very impressed with PayPal, a service launched two weeks earlier (15 Nov 1999) by Confinity, the original name of its parent company.

We've made our share of incorrect predictions over the years, but this one we got right (note 1), annointing PayPal with one of the first OBR Best of the Web awards. Here's our take from that original report, when PayPal was available as a payment option on just nine eBay auctions:

image(PayPal) is not as well known as BidPay....but as soon as (eBay) participants discover (PayPal) is free and real-time, it should catch on quickly.

PayPal was originally developed as a payment mechanism between Palm Pilots, which explains the "beam money" call-to-action on top of the original user interface (below). But I wasn't a Palm user, so what got me excited about the service was the use of the email address to facilitate payments:

Much of (PayPal's) press coverage has focused on the Palm application...(but) it's the email-payment program that has the huge potential.

The rest, as they say, is history.

PayPal "send money" interface at its 1999 launch (15 Nov 1999)


PayPal "send money" today (19 Nov 2009)


1. And truth be told, we predicted  that PayPal would need to hook up with an existing payment player to get past trust issues. But luckily for them, the extremely deep-pocketed VCs in the bubble days floated PayPal a massive amount of cash so it could buy its way into the wallets of consumers.  

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Numbers: Remote Deposit Penetration at Randolph-Brooks FCU

By Jim Bruene on November 6, 2009 9:35 AM | Comments

image In an article in today's Austin Business Journal about the coming launch of mShift-powered mobile remote deposit at Randolph-Brooks Federal Credit Union, the CU revealed its penetration number in its EasCorp-powered, home-scanner-based service, eDeposits:

Total members: 300,000
Total checking account customers: 202,000
% of checking using remote deposit: 5%
Number of remote deposit users: 10,000 (derived)
% of members using remote deposit: 3+% (derived)

The San Antonio, TX-based credit union expects more mobile users than in-home users. The product, which debuted at Finovate on Sep. 29, is currently being tested with employees before it rolls out to select customers.

imageUSAA was the first major financial institution to launch mobile remote deposits in August.  But WV United beat them to market in July earning our OBR Best in the Web award. And this week, speaking at BAI Retail Delivery, Bank of America's Doug Brown was bullish on the feature, leading many to believe that the giant would add the feature to its mobile offering at some point (see note). And if that happens, it's not inconceivable the feature could show up in television commercials, either from BofA or Apple.

1. In response to an audience question after his presentation, Brown said that the bank was seeing 1 million envelope-free deposits made at ATMs every day, and "there was an obvious use-case in mobile". Note that he did not specifically say, or even directly imply, that BofA would launch it, but he also didn't dismiss the idea. 


Best of Web: Vantage Credit Union is First to Tap Twitter for Transactional Banking

By Jim Bruene on October 5, 2009 1:10 PM | Comments (5)

imageIn 2006, we predicted that every major bank and credit union would someday have a blog (note 1). That prediction was looking downright awful until Twitter came along. The popular, and much-hyped service, is part blog, part social network, and part text-messaging.

Financial institutions have embraced Twitter much faster than blogging because it's low cost, drop-dead simple to implement, and relatively cost-effective to staff and manage. Our good friend, Christophe Langlois, who has been tracking social media implementations at Visible-Banking for several years, has identified 120 financial institution blogs worldwide. In comparison, Christophe is tracking more than 700 Twitter accounts. Similarly, Jeffry Pilcher's exhaustive Twitter directory at The Financial Brand lists about 600 Twitter accounts in use by financial institutions.

Vantage CU takes the Twitter plunge
image Although Twitter can successfully be used as a simple one-way broadcast medium (i.e., microblog), it's also a powerful two-way and group communication service (note 2). Wesabe, in 2008, and Xpenser, earlier this year, were the first online PFMs to leverage Twitter for posting transaction info to user accounts. But St. Louis, Missouri-based Vantage Credit Union took that one step further by allowing users not only to query their accounts, but also to move money between them.

At the core, Vantage CU's Twitter service is little different than hundreds of SMS/text-message mobile-banking services already in use around the world. But for Twitter users, it allows account queries from anywhere a Twitter client is loaded: smartphone, laptop, or desktop (note 3).   

How it works
image Vantage CU posted videos showing how it works. But if you are a Twitter user, you can skip the tutorial. You'll understand right away: After signing up for the service at Vantage (inset), simply follow the CU on Twitter (@myvcu) and send them a direct message whenever you want to see your balance, recent transactions, or to initiate a funds transfer.

While the process is relatively intuitive for Twitter users, the command-code language limits the usefulness. The results look like a throwback to the DOS command line circa 1985 (see first screenshot below). It would be much simpler if the CU offered plain English commands and account nicknames, e.g., "transfer $500 from wifechecking to mychecking" instead of "#trans f9 t0". Ideally, the CU would support short codes for its power users and plain English commands for everyone else.

That said, it's pretty simple to remember how to make a checking account balance inquiry, "#bal 9" (9 is the code for checking), which is the primary way the service will be used.


Website implementation
Few members will actually use Twitter banking, at least initially. The main reason to embrace Twitter is for the publicity and brand value, especially when you are first.  Vantage takes full advantage of its first-mover position, placing a headline on its homepage, along with a Twitter feed directly below.

Other things Vantage CU does right:

  • Posted four how-to videos (although, the CU needs to choose a faster host for the videos because the Screencast-based videos run way too slow)
  • Posted FAQs, instructions, and screenshots
  • Wrote a blog post about the new service
  • Proactively reached out to bloggers resulting in great initial coverage (Financial Brand, Everything CU, and Currency Marketing) which can help bring mainstream press coverage later
  • Allows users to subscribe to the Twitter feed via RSS (directly from the CU's homepage)

image The PR value alone should more than justify the expense of Vantage CU's Twitter service. And if Twitter continues to work its way into the fabric of consumers' daily lives, the service could attract a decent following.

In keeping with our 10-year tradition of recognizing new online "firsts," we are awarding Vantage a 2009 Best of the Web award (note 4) for being the first in the world with full-service Twitter banking.

Vantage Credit Union homepage featuring new Twitter service (5 Oct 2009)


1. See our Online Banking Report: Bank 2.0 (Nov. 2006).
2. For more info, see our Online Banking Report: Leveraging Twitter (May 2009)
3. However, text-messaging users would likely prefer to make balance inquiries directly from their phone's SMS function, rather than taking the time to open the Twitter app or website. The most likely user is someone already using Twitter who decides to do a quick banking inquiry while Tweeting. 
4. OBR Best of the Web awards are given periodically to companies that pioneer new online and mobile banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important development. Vantage Credit Union is the 75th recipient since we began awarding it in 1997.

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WV United Federal Credit Union is First with iPhone-based Remote Check Scan & Deposit

By Jim Bruene on July 12, 2009 5:37 PM | Comments (2)

imageIn June, we reported on USAA's upcoming iPhone app that will support remote check deposits. But it looks like they were beaten to market by tiny WV United FCU headquartered in Charleston, WV. Haven't heard of WV United? They have just six employees, $11 million in assets, and 3,000 members.

But somehow they were able to pull off something that no other financial institution has yet to accomplish, accepting paper check deposits via a native iPhone application (iTunes link, see note 1 and 2). The application was added to the iPhone App Store on July 4, and the CU wasted no time in heralding the innovation with a homepage banner (see screenshot below).

imageThe application could not be simpler. Users take a picture by pressing the button on the left (see inset), verifying that the image is readable, then uploading with the button on the right. WV United uses the member's mobile phone number to apply it to the correct account. The latest iPhone OS 3.0 is required.

The credit union also accepts deposits via in-home scanners using secure file transfers powered by LeapFile (co-branded site here).

It appears both services simply send images to the credit union where an employee manually converts them to ACH items. According to the E-Deposit customer agreement, the first 10 items each month are free; a $1 fee per item for the remainder of the month is charged. This allows for collection of a bit of fee revenue from small business members, while enabling most consumers to use it free of charge.

Certainly, fraud possibilities exist. But the CU's normal deposit-processing controls should mitigate most of the risk (see E-Deposit funds availability policy here). 

Mitek Systems introduced a mobile remote-deposit system last year (post here), but it's not yet in production at any financial institutions. 

imageAnalysis: Although not a feature that will see widespread usage, mobile check deposits will prove convenient for certain customers, especially mobile small businesses. More importantly, it helps differentiate between online and mobile services.

So, for raising the bar in mobile banking, we are awarding WV United with our first OBR Best of the Web award for 2009 (note 3). In the 12 years we've given the award, WV United is by far the smallest financial institution to win. 

WV United FCU homepage with iPhone banner (11 July 2009)


iPhone app landing page (link)


1. Sometimes it's nice to be small. WV United has six employees total, according to NCUA data. Most large banks would have a project team larger than that just to do the feasibility study on mobile remote-deposit capture.
2. For more info on the importance of iPhone applications for financial services, see our recent full report: Online Banking Report: Mobile Banking via the iPhone.
3. OBR Best of the Web awards are given periodically to companies that pioneer new online and mobile banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important development. WV United is the 74th recipient of the designation since we began awarding it in 1997.

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Best of the Web: Zions Bank's Holiday Gift Planner Wraps Personal Finance into a Neat Package

By Jim Bruene on November 28, 2008 2:40 PM | Comments (1)

imageAs I was publishing my earlier post on the Thanksgiving message on the Zions Bank homepage, I noticed a small Holiday Gift Planner banner in the lower left corner (see inset below). Expecting to find a pitch for Visa or MasterCard gift cards, I clicked on it and was surprised to find a very cool holiday microsite called at (see screenshot 1 below and note 1).

imageThe gift planner is a personal financial management tool for planning, budgeting, and tracking holiday gift expenditures. Users create a gift list for each person by entering a budget amount per person, an estimated cost for each planned gift, and then later the actual amount spent.

The tool does all the math, tracking progress against each recipients' gift list and how the total holiday budget is faring (see screenshot 2). It even includes a space for capturing gift-buying notes (see below). This year's list will be archived to provide a handy reference for next year. Hopefully, the bank will use email to draw users back next year.


Consumers could do the same thing on a spreadsheet or within most personal finance programs. However, Zions has built an elegant solution that is faster and more convenient. I've always done this for my kids on a piece of paper which I inevitably lose and/or leave out on the table where anyone can read it. I look forward to keeping this list bookmarked and password-protected on my computer this year. 

Anyone can use the program, you needn't be a Zions customers. It takes seconds to sign up inputting name, email address and password (see screenshot 3). The site gently cross sells credit cards to pay for itself. There's a banner that runs across the top of the planning page (screenshot 2) and a link to special cardholder discounts on the main page (screenshot 4).

Zions should turn the planner into an iPhone/Android app to help users track gift purchases on the go and avoid the need to print the list prior to the trip to the mall.

obr_bestofweb Bottom line: The Zions gift planner is a great example of how to creatively use branded financial management tools to both help customers and create synergy with banking products. We're giving Zions our sixth OBR Best of the Web 2008 award for creating a simple solution to help customers avoid holiday overspending, a pesky personal finance issue that is top-of-mind this year. 


1. Homepage of Zions Bank's gift planner (28 Nov 2008)


2. A credit card cross sell runs across the top of my personalized gift planner


3. Email address is captured for future marketing purposes


4. Credit card discounts are displayed along with an credit card application



1. Evidently the planner was available in early December last year. The first blog mention was 7 Dec 2007.

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Online Banking Report Looks at New Security Technologies that Promise More Peace of Mind

By Jim Bruene on September 18, 2008 5:25 PM | Comments

image With bad news pouring down from all corners of the financial services world, it's a difficult time to be a bank marketer no matter what condition your financial institution is in (see note 1).

imageBut besides sending reassuring emails to your customers, highlighting your strong balance sheet on your website (see inset), and for the few with blogs, dropping the occasional rosy post into the RSS or Twitter feed (note 2), what's a banker to do?

When fear is rampant, little things can make a difference. Your customers have long been nervous about banking online. Most aren't afraid enough not to use it, but lingering doubt remains.

Now might be a great time to follow the lead of ING Direct, Firstrade, and Muriel Siebert and introduce a software solution that provides extra security for online banking. While it won't make a Fannie Mae shareholder any happier, it's reassuring in these times that at least there are no crooks stealing your username and password.

obr_bestofwebOnline Banking Report publishes Security 4.0 (note 3)
In the latest Online Banking Report, we look at several promising software solutions that allow even malware-infested users to connect safely to their bank. Both solutions earned OBR Best of the Web designations (note 4): 

  • Rapport from Trusteer, now being distributed by ING Direct in the United States and Canada (previous post here)
  • SafeCentral from Authentium, being distributed by Firstrade and in testing at several major banks (Finovate Startup demo video here)

Online Banking Report: Security 4.0 Tabl of Contents Sep 2008We also take a closer look at Bank of America's SafePass (previous post here), which is an easy way for customers to add an extra security layer to their login, although it won't prevent certain malware to hijack the session. See the inset for the complete Table of Contents.

Online Banking Report subscribers may download it now here. Others may download abstract here, or purchase here. Cost is US$495. 

1. But be thankful if your financial institution is not in the headlines right now. I'm in the hometown of WaMu and the headlines this morning were not pretty.
2. Blog post from Verity CU on 16 Sept.; Twitter update from First Federal today   
3. Our fourth full Online Banking Report on security/privacy; previous reports were #119, #93/94, and #48
4. OBR Best of the Web awards are given periodically to pioneering online banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important development. Trusteer and Authentium were the 71st and 72nd recipients of the designation since we began awarding them in 1997.


New Online Banking Report: New Models for Lead Generation

By Jim Bruene on July 9, 2008 5:17 PM | Comments (2)

imageOur parent publication, Online Banking Report, has published a new report: New Models for Lead Generation: How auctions, community recommendations, product placements, and specialized search provide alternatives to Google AdWords.

Not only is this the longest report title in our history, it's the first time we've looked specifically at lead gen sites (click on the Table of Contents right, to download the abstract).

obr_bestofwebThe report was inspired by MoneyAisle, an auction-based retail deposit market, that debuted June 9. Although a few kinks need to be worked out, we are impressed by its work and are awarding it the second OBR Best of the Web this year (see note 1 and Credit Karma below).

But auctions were not the only new lead-gen model we looked at. Others included:

The report, which includes a 10-year forecast for auction and personal finance community involvement, is available as part of an annual Online Banking Report subscription or it can be purchased individually for $495 here.

Next month: New security technologies your customers are going to love, or not.

Screenshot: Credit Karma offer page: Countrywide's high-yield savings offer is rated positively by 53% of Credit Karma users and earns a composite score of 63% which also factors in clickthrough rates and exclusivity, see box in upper right (9 July 2008)


. The first winner in 2008 was SmartyPig (here). Best of the Web awards are given for new products/features that "raise the bar" for online banking. It is neither an endorsement of the company, nor the product itself. See previous coverage here.

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Social Networking Meets Savings Accounts: SmartyPig Launches this Week

By Jim Bruene on March 4, 2008 12:24 AM | Comments (15)

Update March 6: I added two clarifications pointed out in the comments. First, that normal ACH deposits to your own SmartyPig account are free of charge. Second, that the retailers bonus on withdrawals to their gift cards is UP TO 5% (not a flat 5%). 

imageHow about this recipe? Take a basic FDIC-insured savings account, spice it up with automated electronic transfers and email communications, mix in gift/debit cards, wrap the whole thing up in a social network, and top it with a memorable name. What do you have? SmartyPig, the most innovative financial service we've seen since Prosper launched two years ago.

The site is in the final week of private beta. To register, you still need an invitation code. The company asked me not to publish it, but it's OK if I distribute by request via email. Send a note to info@netbanker with "SmartyPig" in the subject line. Or simply wait until after this weekend when the site goes into public beta.

How it works:

image1.  Users create savings accounts at the site. Deposits are held at West Bank, a Des Moines, IA- based financial institution with $1.3 billion in assets. Funding is through ACH (electronic) transfers from outside bank accounts. SmartyPig currently pays a high, 4.3% APY on deposits. 

2. After the account is established, users are encouraged to create savings goals funded through automatic monthly ACH transfers until the goal is met.

3. Now here is where SmartyPig diverges from a typical bank account. The savings goals can be made public or kept private. Public goals can be funded in part, or entirely, by outside contributors. Think of grandma and grandpa contributing birthday money to help junior buy a new bike. Contributions are funded through credit card charges with a maximum charge of $500 and a per transaction processing fee of $4.95. To make sure grandma's $50 doesn't go to a Mario game, the money cannot be withdrawn until the savings goal is met (or canceled by the primary account holder).

4. After goals have been met, the user can elect to take the funds out in the form of a MasterCard debit card or a gift card from a retail partner such as Participating retailers add up to 5% bonus to the savings goal so that $1000 saved for the plasma TV is worth $1,050 if redeemed via Amazon gift card. That's a great added incentive to use the service.

Gift Cards
SmartyPig gift card SmartyPig also sells gift cards that can be redeemed towards new or existing savings goals. These cards, issued in denominations of $25 to $500, are meant to be given as gifts or employee incentives. They cannot be redeemed outside the SmartyPig system. Physical card are produced and delivered for a processing fee of $4.95 plus delivery fees of $5.95 or more. Or consumers can deliver a virtual card through email to eliminate the delivery charge (but the $4.95 processing fee remains the same). 

Summary of Fees

  • Your own deposits: Free (via ACH transfer)
  • Public contributions: $4.95 flat processing fee for each contribution made by an outside contributor. Contributions can be from $25 to $500 and are funded via credit card.
  • Gift cards: Gift cards incur a $4.95 processing fee and an optional $5.95 shipping fee. The shipping fee can be avoided if a virtual gift card is chosen which is fulfilled via email.

Although, not everyone is going to want to go through the extra steps to save this way, we are impressed with SmartyPig and are awarding it our first OBR Best of the Web award for 2008 obr_bestofweb(see note 1). We like how it's part gift registry, part savings account, and potentially a big help in getting users in the habit of saving for larger goals. The look-and-feel is very Web 2.0 and should resonate with teens and twenty-somethings.

There are a few rough edges that need better explanation and/or minor redesign. For instance, there is no way to simply add funds to a savings account without first setting up an automatic funding plan. But the site isn't even officially launched yet, so these issues should be ironed out during the beta period. 

The processing fee for outside contributions of $4.95 per transaction is a bit on the high side (there is no fee for funds transfers from your own bank account). One could argue that it's worth price of a triple mocha for the convenience and benefits of the savings account. But for smaller deposits of $50 to $100, it's a pretty high percentage of the overall deposit.

It would be nice if the company could lower the fee, perhaps by creating an ACH funding option. Another way to reduce costs is to lower the 4.3% APR. I'm not sure the savers attracted to this account really need that high of a rate. A lower interest rate combined with lower fees might make the service more palatable overall.   

The company may have to tweak its business model going forward. But the real lesson here is that savings accounts can be made stickier with automation and incentives. Leave it to the Iowans to show us the way (note 2). 


1. The main account screen: I set up a savings account for my son. Then set a savings goal of $300 for a new bike. SmartyPig requires that the savings goal be funded in equal monthly withdrawals from the linked checking. It would be helpful if you could opt out of the automated savings plan so that the savings goal could be funded manually. 



2. Public goals: If you opted to make your savings goal public, anyone can find it by searching via email address under the "Friends' Goals" tab on the top (you can see this one by searching for  SmartyPig widget

Users can publicize their goals with a widget (see inset, and link at bottom of screen above) or by sending email to friends.

After making a contribution, the following screen is displayed.

SmartyPig contribution thank you screenshot



1. Online Banking Report (OBR) Best of the Web awards are given for products that "raise the bar" in online financial services, usually for pioneering a new feature. Recent winners are covered here. Five awards were been handed out in 2007: two for Wesabe, and one each for Jwaala, Buxfer and Obopay. In the past 10 years, 67 companies have won the award.

2. Full disclosure: I was born and raised in Iowa and my brother lives within a few miles of the SmartyPig world headquarters.

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KeyPoint Credit Union Launches on Facebook through mShift Platform

By Jim Bruene on November 15, 2007 1:07 AM | Comments (5)

Link to Key Point Credit Union KeyPoint Credit Union is the first financial institution to launch full-fledged account access through Facebook. Using its mobile banking engine powered by mShift, members can view account balances within their Facebook account (see screenshot below).

To view their balance within Facebook, users must add the KeyPoint application to their Facebook account. The first time it's used, users must log in to their Key Point account using their normal username and password. On subsequent visits, balance info is automatically displayed with no login, provided the user is logged into their Facebook account.

In addition to balance info, the KeyPoint application displays content taken from the credit union's homepage.

Even though the application is relatively simple, we are giving it our OBR Best of the Web award, the second one this week, and the sixth in 2007 (see previous coverage here). Placing account balance info within Facebook is a great way to demonstrate commitment to social networking members. There are privacy issues with displaying data without a banking login (note 1), but it's reasonable to let your customers decide for themselves if they are comfortable with this setup.    

KeyPoint Facebook application prior to first authentication session:

Key Point Credit Union Facebook application

After initial authentication, account balance info is automatically displayed:

Key Point Credit Union Facebook application


1. Other Facebook users cannot see the balance info, but someone sharing the computer might see it.

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Wesabe is First with True Online Banking Widget

By Jim Bruene on November 12, 2007 5:56 PM | Comments (1)

We first discussed the usability advantage of direct-to-the-desktop information delivery in the 1998 Online Banking Report, Creating the of Financial Services  (see note 1). We called it a "meter" instead of today's widget or gadget, but its essential function was to show balance levels on the user's PC without requiring a login each time.

Last week, Wesabe became the first company to implement that concept with its Mac Widget shown below (Wesabe link here). The widget displays the balances in the various accounts tracked through the company's personal finance platform:

Several other personal finance companies have previously launched widgets including ClearCheckbook which released a Google Gadget on March 14 (here) and  Mac Widget a few days later (here). Other financial widgets are offered by billQ, Buxfer and Mortgagebot (see previous coverage here and here).

However, Wesabe is the only one streaming real-time balance updates thanks to its automated downloading of account data from linked financial accounts (aka account aggregation). Without the automatic updates, a widget is more window dressing than functional tool.  

Therefore, we're giving Wesabe its second OBR Best of the Web this year in recognition of its new widget which once again raises the bar for financial information delivery (note 2), if only for Mac users. 


1. We last covered desktop technologies in a 2002 Online Banking Report, Grabbing Desktop Mindshare (# 85).

2. Recent OBR Best of the Web winners are covered here. Five awards have been handed out this year: two for Wesabe, and one each for Jwaala, Buxfer and Obopay. In the past 10 years, 67 companies have won Online Banking Report's Best of the Web awards. Only five companies prior to Wesabe have won the award twice: Bank of America, Citibank, E*Trade, Everbank, and Wells Fargo.

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MySpace Meets Quicken: What's Happening in Social Personal Finance

By Jim Bruene on June 12, 2007 3:56 PM | Comments (3)

Link to Online Banking Report

Last week, I promised to provide more details on the conclusions in our latest Online Banking ReportSocial Personal Finance: Will social networking revolutionize personal finance? It was mailed to subscribers last Friday, so it should be making its way through inter-office mail as we speak (or download here). 

Here are the major themes/conclusions from the report:

  1. Social networks are the new main street; so banks that want to be where their customers are should NOT ignore social networks.
  2. There are many ways to bring social networking concepts into mainstream banking sites, for instance blogs and forums allow conversations to take place with both customers and employees participating.
  3. The leaders in the space now are startups such as Wesabe and Lending Club. But what they gain in social networking savvy, they more than give back in lack of trust. So financial institutions are still incredibly relevant in social personal finance.
  4. In the future, social networks may become so trusted that they can function as a virtual credit union, bringing together members to provide each other with financial services (e.g., P2P lending) or using their clout to negotiate deep discounts with financial providers (e.g., affinity credit cards).

 Social personal finance innovators profiled in the report include:

  • Buxfer -- Named OBR Best of the Web in the report for several pioneering features, including login via third-party APIs, transaction input via email, file appending, Google gadget, and budget alerts
  • Wesabe -- Also named OBR Best of the Web for its integration of personal spending records with the wider community

We also looked at Mint, Geezeo, Lending Club, Wells Fargo, and Intuit's new Personal FinanceWorks and Small Business FinanceWorks.


For more information on the report see the landing page here or download the abstract here. And for Colin Henderson's take at The Bankwatch, go here.






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Amplify FCU's MoneyTracker Features Personal RSS Feeds

By Jim Bruene on June 11, 2007 3:49 PM | Comments (2)

When researching new mobile banking launches (see our earlier post here), we ran across one of the more innovative financial institutions in the country: Austin, TX-based Amplify Federal Credit Union <>, a $400 million asset institution with 40,000 members. The CU's tagline, Bank less. Live more. is right on target for the majority of financial consumers. 

It's possible that Amplify uses more of the ideas we've featured in Online Banking Report and NetBanker than any financial institution we've come across. For example, cafe branches with free WiFi, mobile banking (WAP), Web 2.0 look and feel, high-yield checking (up to 5.1% APY), online chat, fee-based ($5.95/mo) value-add checking account (Amplified checking) loaded with online and mainstream features, and a host of other services from college planning to eBay bidding (see menu here). One surprising omission: no blog.  

OBR Best of the Web
Link to Online Banking Report But our favorite feature, and winner of our fourth OBR Best of the Web 2007,* is Amplify's new personal finance management program, MoneyTracker. MoneyTracker uses natural language search so members used to Googling there way through the day will feel right at home. Instead of using slower drop-down search, a customer wanting to review recent Costco purchases simply enters "costco this year" in the search box.

The program was developed by Austin startup, Jwaala, which announced it in November. Amplify, which went live March 5 (press release here), is Jwaala's first installation.

MoneyTracker also includes an account aggregation engine so accounts at any financial institution can be tracked. And like eBay, it allows users to turn any search into an automatic alert with the option of receiving the information via email, SMS, or an RSS feed (see inset). As far as we know, Amplify is the first financial institution in the U.S., if not the world, to institute personal RSS feeds for its customers, and it is the basis for the Best of the Web designation.

Amplify posted a series of six videos (here) that do a great job explaining Money Tracker, an important part of gaining trial. The style, copywriting, on-screen talent, and staging, are among the best we've seen online.  

Amplify's Main MoneyTracker page (link here):

Amplify FCU landing page for Jwaala's MoneyTracker    


*OBR Best of the Web awards are given out occasionally for features that raise the bar in online financial services. It is NOT necessarily and endorsement of the company or its full product.

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Bank of America is First Major U.S. Bank to Integrate Personal Finance into Online Banking

By Jim Bruene on December 26, 2006 3:33 PM | Comments (1)

Link to Online Banking Report Best of WebBank of America is the first major U.S. bank to provide full online personal financial management (PFM) within its online banking service. It's an important development and one we predicted in our detailed look at online personal finance (Online Banking Report #131/132, published in September). So, in conjunction with our sister publication, we are awarding it the fifth and final OBR Best of the Web for 2006 (click here for other recent winners).

The bank uses its Yodlee-powered My Portfolio account-aggregation service to deliver the PFM functions. BofA is the first financial institution to use Yodlee's new MoneyCenter module since its launch six months ago (see our coverage here).

The bank has chosen to offer the full MoneyCenter suite with Net Worth Summary, Investment Detail, Transactions, Rewards, Email, and Search on the main page (see screenshot below).

My Portfolio also includes basic personal finance functionality, including budgeting, categorizing and a nice array of preformatted reports including:

  • Cash Flow Analysis
  • Expense Analysis
  • Budget vs. Actual
  • Credit Card Utilization
  • Get Transaction Reports
  • Set Budget Goals

See Online Banking Report 131/132 for more details on Yodlee's MoneyCenter.

Overall, we believe the new PFM functions are a great addition to the bank's online banking program. However, it still feels a bit "bolted on" to the core online banking service. For instance, My Portfolio does not yet warrant a place on the primary top navigation bar. Instead, users must click on a link in the middle of the main Account Overview screen.

Once the Yodlee-powered service has loaded (which took 10 to 15 seconds in our tests at broadband speeds), it's relatively well integrated. A second My Portfolio navigation bar is loaded under the main online banking navigation. Finally, a third row displays the options available for each function in row two (see screenshot below).

The pages load relatively fast as long as you stay within the My Portfolio area. However, moving back and forth between BofA-served online banking functions and Yodlee-served My Portfolio functions is a bit clunky with the 15-second delay. But the overall experience will be fine once My Portfolio is incorporated into primary navigation.   

The main My Portfolio page is automatically pre-filled with applicable BofA accounts; however, in my case, I was unable to update older credit card information. When clicking Update All Accounts in the upper right, error messages indicated that my Bank of America credit cards could not be updated (see screenshot below).

Bank of America My Portfolio error screen

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billQ Uses Account-Specific RSS Feeds for Bill Payment notices

By Jim Bruene on December 11, 2006 10:29 AM | Comments

For the past few months, I've been more or less obsessed with RSS feeds (see our latest full report on the subject here). All of a sudden every information-delivery problem seems solvable with a feed.

And there is enormous potential for feeds in everyday banking which primarily involves simple information queries: What's my balance? Did my check clear? Was my mortgage paid? 

The first account-specific financial feed
I've been on the lookout for the first financial institution with account-specific feeds. That search continues, but a non-bank has been using feeds for bill-payment-status updates: previous OBR Best of the Web winner billQ <> (see previous coverage here).

The company has an "RSS Feed" option on its list of automated bill-payment-tracking mechanisms which also include an iCalendar subscription, an Apple OS X widget, or a toolbar applet (see screenshot below for billQ subscription options).

billQ bill subscription options CLICK TO ENLARGE

When using the RSS feed option, bills automatically appear in the user's newsreader software. Below is an example using the Newsgator Web-based reader:


billQ Bill Payment Mac Widget Released

By Jim Bruene on September 14, 2006 12:47 AM | Comments

Billq_widgetOur most recent OBR Best of the Web winner (NB Sep 1), Seen Creative's billQ, has achieved another industry first, a bill payment-tracking widget for Apple Mac users (here's where you can download it from Apple's site).

The widget allows Mac users to drop a small billQ screen right onto their desktop (see NB 2 May 2005). It allows users to see what bills are due and mark them as paid without ever leaving their desktop.

The widget can also be downloaded at billQ's website <>.


billQ Named Best of the Web by Online Banking Report

By Jim Bruene on September 1, 2006 10:00 AM | Comments

Bestofweblogo_2In the latest from Online Banking Report, "Personal Finance Features for Online Banking," we've awarded an OBR Best of the Web 2006 to a new Web-based bill management service. It's the third winner of the year,* and 53rd since the first recipient in 1997 (here's the list).

And the winner is, drum roll please, billQ <> a new Web 2.0-inspired bill manager from Seen Creative Group <>, a relatively new website-design firm based in Rochester, NY. The company was chosen for raising the bar in three areas:

  • User-interface design (click on screenshot below for closeup; see more screenshots by clicking the continuation link at the bottom of this article)
  • "Add this bill" browser-toolbar button
  • Publishing bills through RSS and iCalendar feeds


Read the entire review, along with a look at a dozen other online personal finance applications, in this month's Online Banking Report (#131/132).


*Previous 2006 winners include E*Trade Bank for its Mileage Maximizer airline card mile aggregator (NB 7 Dec 2005) and Prosper for its person-to-person lending platform (NB Feb. 5 and others).


Welcome screen prior to setting up bills (see above for main screen after bills have been enabled)


Set-up reminders


Set-up feeds


Set-up feeds


P2P Lending Rates a NYT Article

By Jim Bruene on February 6, 2006 10:58 AM | Comments

Prosper_logoWhile person-to-person (P2P) lending will never create the buzz or user base of eBay's PayPal or Google's GBuy, it passed a milestone yesterday with a favorable article in The New York Times. The short article looked at UK-based Zopa <>, a recent OBR Best of the Web winner (NetBanker Dec. 1) and a similar service being hatched in Silicon Valley, Prosper <> (formerly CircleOne).

Prosper_homepageProsper, like many Internet startups before it, bears watching not only because of its relatively minuscule user basecurrently, just 12 transactions are pendingbut also because of its VC backers, Benchmark Capital, Accel Partners, Benchmark Capital, Fidelity Ventures, and Omidyar Network, along with its famous founder Chris Larsen, who launched E-Loan nearly a decade ago. The company has raised $20 million according to its website. Click on the screenshot, right, for a closeup of its homepage.

We'll look at both companies in more detail in the next Online Banking Report (Number 127), due out at the end of the month.



Online Balance Poaching: E*Trade's Mileage Maximizer

By Jim Bruene on December 7, 2005 9:47 PM | Comments

Credit card companies have been poaching revolving balances from each other for years primarily through direct mail. It helped boost the share of early movers, such as Capital One. But once the tactic was widely copied, it dragged margins down for all.

The same technique has been used online with dedicated balance-transfer microsites posted by Bank of America and others beginning in 2003. The online balance transfer is better than paper because it can be interactive, prompting the user to make additional transfers, or to correct errors in the information input. However, it still requires the user to make a trip to the website to make the transfer.

Etrade_mileagemaximizerEnter E*Trade's new Mileage Maximizer program, launched with a page-dominating color ad in Tuesday's Wall Street Journal. With the Mileage Maximizer, the bank encourages users to make purchases on their existing non-E*Trade rewards card, then have the balances AUTOMATICALLY swept to an E*Trade 8.9% APR line of credit each month. The bank's website is used to initiate and maintain the transfer process. But like recurring bill payments, once the sweep is established, it will occur each month with no interaction by the user.

E*Trade may well be the most innovative online financial services company. Here are some of the industry firsts they've logged over the years:

  • 2001: MyLoanTeam from E*Trade Mortgage (OBR 73)
  • 2003: Real-time funds transfers (OBR 96/97)
  • 2005: 7-year online transacation archives (OBR 118)
  • 2005 (March): First U.S. bank offering security tokens for online access (NetBanker 2 March 2005)
  • 2005 (December): First virtual rewards card, Mileage Maximizer


Editor's Note: Mileage Mazimizer was awarded an "OBR Best of the Web" in our report on online lending published Jan. 31, 2006 (OBR 126).


Citibank Fights Fraud with Personalized Emails

By Jim Bruene on May 30, 2005 12:01 AM | Comments

Citi_secure_email_closeupIt's fitting that the financial company most targeted in phishing attacks, Citibank, would be the first to introduce a new email format that goes a long way towards helping users identify legitimate email messages.

Citi_secure_email_message The personalized emails (click on inset to enlarge) include not only the name of the recipient, but also the last 4 digits of the user's ATM card. While simple personalization with the customer name would help many users identify legitimate emails, it's far from fool-proof.

First, there's the relatively common practice of including first name and/or last names in email addresses. Also, some phishers are using direct marketing tactics and first running email addresses through various databases to append actual names and other info to the email record in order to develop a personalized pitch (see ZD-Net article).

Citibank's new email format was announced to customers through a short message on the top of the online banking screen in early May. It is also now mentioned in the bank's main FAQ page.

This is a great first step in winning back the confidence of users. Eventually email standards will evolve so that the email client will be able to readily identify legitimate emails, but that could be years in the future.

If you are considering a similar approach, you might want to let users choose the name and identifying information that appears in the personalization box. In February, we reported on a UK security initiative that took that approach.

For more information:

-- JB

Editor's Note: Citibank received an OBR Best of the Web award for this and other security features in Online Banking Report #119, "Marketing Security."


Bank of America Unveils Multi-Factor Security for Consumer Accounts

By Jim Bruene on May 26, 2005 1:46 PM | Comments

Obr_bestofwebBank of America wins the race to be the first with a viable plan to secure consumer online banking accounts. In an announcement today, it becomes the first major U.S. bank to endorse multi-factor authentication for consumers at login.*

The system, already in use at Stanford Federal Credit Union, is called SiteKey. The clever approach from Bill Harris's PassMark Security provides several layers of security to defeat phishing and keylogging attacks. The company calls it two-way two-factor authentication because not only does the end-user authenticate themselves to the bank, the bank authenticates itself to the user to defeat phishing schemes.

Here's how it works (click on inset below for BofA page):

  1. User provides username
  2. BofA verifies that the login request is coming from the user's previously registered computer; if NOT, user must successfully answer a challenge question based on previously registered shared secrets
  3. After passing steps 1 and 2, the user is shown their previously selected image, so they know they are logging into the true BofA server
  4. User enters their password

The service launches in mid-June in Tennessee with full roll-out by the end of the year.

Even though it's long overdue, we applaud Bank of America for moving the industry forward. While the program won't be available system-wide until year-end, we're giving it an Online Banking Report "Best of the Web" now because it's the biggest development in U.S. online banking for several years.

The BofA/Passmark system is ingenious for several reasons:

  • Unless a user logs in from a new computer, there is little extra work involved; just a two-step login with username, followed by the password
  • Requires no hardware or out-of-channel coordination by the end-user; shouldn't cause a major increase in customer service expense
  • Defeats phishing by displaying a personal image prior to asking for password
  • Defeats keylogging with the rotating challenge question

If you are at one of the other 15,000 financial institutions in the United States, the clock is now ticking. As your customers find out they are not among the 13+ million consumers (BofA's current online base) receiving extra protection, they will be demanding the same from you. And if you thought BofA was aggressive in its free bill pay promotion, wait until you see the marketing blitz on this one. Extra authentication simply MUST BE in your 2006 plans.

-- JB

*For several years, ING Direct has asked for a third bit of info at login, but the necessary info is relatively easy to obtain (for example, zip code). Also, earlier this year, E*Trade launched security tokens for its high-rollers. But BofA is the first with a broad, secure, and non-hardware-based approach.


Bill Payment Toolbar from Billeo

By Jim Bruene on February 16, 2005 4:09 PM | Comments

Billeo_click_to_enlarge Just when you thought the banks were gaining an upper hand in the electronic bill payment battle, up pops a newcomer with a fresh approach. Take a moment to check out Billeo. An odd name, but so is iPod, and it seems to be working pretty well.

We haven't used it yet, so these comments are preliminary, but "on paper" this company and its approach appear to be winners. (One caveat: the business model is unknown, and the privacy policy is a bit ambiguous when it comes to the issue of adware. We'll keep you posted on what we find out.)

Billeo is a free toolbar-resident application that plays "virtual assistant," enabling more convenient and controlled direct bill payment at vendor sites. The toolbar also serves as an e-wallet simplifying online point-of-sale transactions.

The toolbar contains several unique features, one of which is extremely impressive, the ability to save screen captures of transaction receipts. The application also includes payment reminders, a payment register, and a personal "bill payment" email address for users.

There are several familiar names associated with the startup. Nancy Langer, a former exec at Metavante, is the president. The advisory board includes Eric Dunn, formerly with Intuit, Shankar Srinivasan co-founder of Cyberbills, and Scott Loftesness of Glenbrook Partners.

We'll dissect the new service in Part 2 of our upcoming Electronic Payments Report in Online Banking Report.


Editor's Note: Billeo was named "OBR Best of the Web" in the second part of its series on E-Payments (OBR 119) published in June 2005. 


MBNA’s Bill Pay Choice

By Jim Bruene on February 4, 2004 10:10 AM | Comments

The credit card giant offers online payment of outside bills even if the merchant payee does NOT accept credit cards.



MBNA ($142 billion, 40 million cardholders) offers something we’d been expecting for years, a bill payment program that draws payments from a credit card. The company even posts the transactions as cash equivalents, offering the same 15- to 45-day float afforded regular card purchases. However, bill payments do not earn points in MBNA’s reward programs. Furthermore, payees are limited to those that can be paid electronically by CheckFree, although that’s now covers 70% of the processor’s volume.

Consumer Benefits


  •       Added float, as one message board poster said, “why worry whether you get a few days float (from your bank), when MBNA provides a whole month”
  •       Convenience of tracking more expenditures through the card-management system.
  •       Ability to repay over time.
  •       Option of charging bills to an MBNA card or debiting from any checking account.
  •       Free, so long as the cardholder initiates at least two payments per month from their card account (see fee schedule opposite)


  •       No real drawbacks, except for the confusing price schedule. Consumer advocates might argue that it encourages cardholders to take on more debt, but they could already do that by paying bills with convenience checks.

Financial Institution Business Case

We’ve long maintained that loan generation is the most important institutional benefit of online bill payment because. Why? If given the opportunity, users will likely charge several bills per year to an integrated credit line .

While you will lose money on convenience users who repay the charges each month, revolving balances should more than compensate. For example, in our back-of-the-envelope calculations, we estimate a total net profit of $60 per year per user of credit card bill-pay, or $600,000 annually across a 10,000-user customer base. 

The Most Confusing Fee Schedule in the World:
MBNA’s Bill Pay Choice may be among the most flexible online, but its fee schedule is utterly confusing. Perhaps the company should consider charging a nominal flat fee that’s waived if charging 2 or more bills.


Of course, any new credit card program must be monitored closely for abuse, both outright fraud, by setting up a phony electronic merchant, and less sinister gaming of the system where a user becomes an electronic merchant on CheckFree’s system and pays himself each month to earn the float. However, since no reward points are awarded, there is far less incentive to play games.

Card issuers could limit their exposure by setting a maximum monthly amount of bill payments, especially for new cardholders.

How it Works

MBNA cardholders must first register for online access at MBNA’s NetAccess  After that, they register for Bill Pay Choice. Users can pay bills either by charging to their MBNA card or debiting any U.S. checking account. MBNA does not offer its own checking account; however, payments can be drawn from MBNA’s money market account.

The service is free unless the user pays bills only from their checking account, in which case the fee is $0.75 per transaction. Users may qualify for unlimited free checking-account bill payments provided they charge at least two bills to their card each month.


Table 13
Mini Business Case: Card-based bill payment

monthly benefit, assuming 6 payments totaling $1000





Direct Costs  


Cost of float 30 days at 2%


Cost of transactions 6/mo to CheckFree


Cost of service/mo internal


  Total cost/mo  


Direct Revenues  


Increased outstanding balances $167 x 12 months
x 5% spread*


Fees from DDA trans  


  Total revenue/mo  


Net profit/mo  






Extra interchange from increased charge volume 1% x $300/yr


Increased retention 2% increase x $150/yr


Total per user
   per 10,000 users



Source: Online Banking Report estimates, +/- 33%, 2/04
Revenue assumptions: 1 out of every 10 bills will be revolved (10%); revolving balances will be repaid in equal installments over 12 months (6 months average life); interest rate spread = 5% (net of charge-offs)


“Check’s in the Mail” Good Enough For PSECU

By Jim Bruene on January 8, 2004 2:50 PM | Comments

Innovative Upost@home provides real-time credit for mailed deposit items


In a remarkably simple yet highly innovative service Pennsylvania State Employees Credit Union (Harrisburg, PA; 290,000 members; 160,000 online users)  gives qualified members immediate credit for items “deposited” online. Users logged into online banking simply choose the Move Money tab and follow the simple instructions. Members then have 10 days to get the deposit to the credit union via U.S. mail before the items are backed out. There is no fee.

To limit fraud and errors, only about 20% of the CU’s member base is eligible for the program. These 65,000 eligible members start with $1500 in deposit credit, but it can be increased at the discretion of the credit union to as much as $8000 based on usage. Deposited funds are immediately available for use and earn interest from the day of the online deposit entry.


PSECU has long used a similar system for ATM deposits offering credit as high as $20,000. The online version Upost@home, the brainchild of VP Tom Ruback, was launched in November 2001. However, until recently it hadn’t been publicized widely outside its member base. Four months ago a second CU, Pentagon Federal Credit Union’s   launched a service modeled on PSECU’s.  Pentagon Federal’s Trust In You program has tighter limits, beginning with only $750, and increasing to $2500 based on usage.


The CU already had experience with real-time credit of ATM deposits, suffering minimal losses across its 68,000 users (making about 180,000 deposits/month). So it was confident members would continue to be trustworthy through a similar online system.

The online version’s volumes are lower, but are building. In December, nearly 11,000 members made 24,000 deposits, worth $10.5 million. In the first two years, more than 19,000 members have made deposits of $125 million, $83 million of that in 2003. More importantly for anyone thinking of recreating the program, the service has lost only $2000 to fraud, while saving the CU more than $100,000 in interchange.

Active users average two deposit sessions per month, with each session containing slightly less than two items, for a total of 3.8 items per month. At an average of $260 per item, total monthly deposits average $1000 per active user.

Consumer Benefits

Since it’s an unusual benefit, members often need coaxing to try the feature. PSECU sends online banking users a letter explaining the service. Follow-ups to non-users contain a $1.37 check that can only be deposited through the Upost service. Repeat usage is high once members experience the benefits.


  •       Added convenience of simply dropping deposits in the mail; no trip to a branch or ATM, no waiting in line
  •       Peace of mind knowing an image of each item will be available in case of dispute
  •       Earns interest immediately
  •       Can immediately withdraw cash or make payments with the virtual deposit
  •       A record of each deposited item is viewable within the check register
  •       Preaddressed envelopes are available at no charge (NOT prepaid)


  •       Must order or provide envelopes and locate and pay for stamps
  •       Must remember to mail within a few days
  •       Failure to mail deposit could result in negative balance and bounced checks

Business Case

For a credit union serving 290,000 members through two branches (10 total teller windows) and 20 deposit-taking ATMs, the remote deposit program is a win-win. Members like it for all the reasons mentioned above, and the CU saves more than $0.70 per deposit compared to foreign ATM interchange fees.* The CU can continue to minimize its bricks and mortar costs (90% of its members have never set foot on PSECU property) while offering an innovative benefit to online banking users.

*The CU estimates each Upost deposit cost $1.16 to process including an “inflated” value for lost float. In comparison, it pays about $2 for each deposit put into a non-PSECU ATM.

Table 19

Deposit Float

calendar days to receive online deposits, 2003

Source: PSECU, 1/04, deposits processed Jan through Nov 2003

How it Works

Initiating a deposit online is a simple process:

1.    Within the CU’s online banking area, members then choose the Move Money tab (screenshot 1).

2.    Choose Start to initiate a new deposit

3.    Member enters five fields: check number, date check written, amount, who wrote it, who it was made out to (screenshot 2):

4.    Repeat 3 for each deposit item, choose Finished

5.    Write the session number in the space provided on pre-printed or blank envelope

6.    Drop the deposit into the mail

7.    Deposited items are processed and images posted; the deposit line is reset

Members receive instant credit for the deposit and can view deposit details either through the Move Money interface, by selecting Deposit Details, or by clicking on the deposit within their online check register. Once the paper items have been processed, members can view images of the deposited items.

The CU contacts the member by phone if the deposit has not been received by the eighth day. In 2003, 81% of Upost deposits were received by day four and more than 98% were received by day eight. Just five out of every 1000 (0.5%) never arrived.         


Table 20

PSECU Online Deposit Activity for 2003

Upost usage by PSECU members


Source: PSECU, 1/04


Greg Smith is CEO,

Tom Ruback is VP Card Services,





Categories: Best of the Web

Online Banking Report’s Best of the Web 1997 to 2002

By Jim Bruene on January 6, 2003 6:44 PM | Comments

Online Banking Report’s Best of the Web Winners*: 1997 to 2002


Source: Online Banking Report, 12/02       *Winners chosen for “pushing the envelope” by inventing or implementing


Categories: Best of the Web

Best of the Web: Charter One (part 1)

By Jim Bruene on November 4, 2002 7:23 PM | Comments

As we mentioned last month, Charter One has been on a tear, introducing new state-of-the-art Web features at a breakneck pace. We gave the company a Best of the Web award last month for its new fyiAlerts. This month Gomez Advisors named Charter One the second best overall online bank, a seven-notch improvement from Q2. Charter One moved past Wells Fargo and Bank of America and now trails only Citibank (see Table 2, below):

Table 1

Gomez Rankings

U.S. online banking offerings, Q3 2002 vs. Q2 2002


Source: Gomez Advisors, 10/02
"arrow up" = Moved up at least 5 notches from the previous quarter.

*First Union score, Wachovia scored 5.08

The Company

Cleveland-based Charter One, with $39 billion in assets, is the 29th largest bank in the U.S. In September the bank had 330,000 online banking customers, more than 25% of its 1.3 million active checking accounts.

We first became aware of the bank’s prowess this summer after a string of product announcements including fyiAlerts. To get a better idea of how Charter One has quickly moved to the forefront of online banking, we signed up for an account and will detail our experience during the next few issues. Part 1 covers the online account opening process.


The online application is delivered through a popup screen that keeps users apprised of where they are in the process.

Account Opening Process

Although the fulfillment process appears flawed (more on that later), the bank’s online checking account application is well designed and easy to complete. Applicants need their driver’s license or passport number and an existing credit card or deposit account number to transfer the initial balance.

The application consists of 8 screens and about 50 pages of disclosures. It took us just under 9 minutes to complete the entire process including more than 2 minutes skimming the disclosures (time spent digesting the 50 pages of disclosures will vary widely). The initial deposit can be transferred from a deposit or credit card account at any bank. We chose the credit card option which has a $1,000 limit.

In our case, the application process was smooth until the last step. We completed the application on the evening of Oct. 14. We received an on-screen confirmation (screenshot, upper right) with a vague discussion of needing to conduct “certain security reviews” and putting our account on “post no debit hold pending receipt of the application/signature card.” It went on to say that a new account kit would be mailed within three business days. So far, it’s been seven days and we have yet to receive any word from the bank, not even a simple email confirmation of our online application, even though we were told one would be sent (top of screen, right).

To compound the problem, there is no online method of checking the status of your new account. You can’t set up online banking until you have an account number, and you don’t get an account number until the new account kit arrives by mail. We do know that Charter One tapped our credit card for the deposit amount, so presumably we just have to be patient. But this is no way to treat a new customer.

Being 2,500 miles away from Cleveland, we understand if the new account material arrives a week later, but the bank should be communicating via email and/or phone to assure the new customer that their account is being processed. Other than the credit card charge, we have no verification that Charter One even received our account application. At this point, customers may reconsider their decision to open an account. Luckily the bank provided a toll-free number to call with questions.



  •    Navigation in the upper left-hand portion of the application keeps users apprised of where they are in the process (see screenshot, facing page)
  •    Allows initial deposit from credit card ($1,000 max) or ACH from deposit account
  •    Allows new customers to set up overdraft protection from any credit card, even competitive ones
  •    ATM access is optional
  •    Allow passports to be used for new account verification in lieu of a driver’s license
  •    Disclosures include a table of contents
  •    Option to print disclosures from PDF file


Charter One needs to rewrite its closing “thank-you” screen. Really, what does “post no debit hold” mean?



  •    No email confirmation
  •    No account access during confirmation process
  •    Slow follow-up after initial application (should be within 24 hours)


  •    Thank you is buried in final screen of application
  •    No option for disclosures to be emailed

Continued next month


Charter One's Releases a few Innovations

By Jim Bruene on September 16, 2002 2:02 PM | Comments


CharterOne’s FYI Alerts

You need a program to keep up with Charter One’s (Cleveland, OH; $39 billion) innovations during the past few months. We will take a closer look at the company’s highly rated product offerings (#9 overall on Gomez) later this year. In the meantime, check out its most recent development, an alert service developed with the help of Chicago-based CenterPost  


Charter One calls its FYI Alerts, “state-of-the-art.” They certainly are. It’s by far the most comprehensive service available today, and the first U.S. retail bank offering voice messages as a delivery option. Users can choose balance or activity alerts and can schedule the delivery of mini-statements on a daily, weekly, or monthly basis. Each particular alert can be sent via email, wireless, fax, or voice message. The service was introduced in mid-August for consumers and the first week of September for businesses. The service is free for both consumers and small businesses, and that is unlikely to change according to Michael Dobbins, SVP of Direct Banking. The bank looks at it as a significant differentiator for picking up new checking accounts and increasing customer satisfaction. To a lesser extent, it also expects to reduce call center expenses with fewer customers jamming the phone lines on payday to check their balance. With no promotion beyond its Web site, the service picked up 3,500 users during the first few weeks. Marketing kicked off on Sept. 6 with an email to its 330,000 online banking customers. In-branch promotion and statement inserts were set for later in the month. To speed adoption, the bank will offer to enroll VRU customers immediately following a telephone balance inquiry.


Top 10 Industry Events of 2001

By Jim Bruene on December 4, 2001 10:40 AM | Comments


Biller Direct Bill Payment Model Pulls Ahead…Way Ahead

As we’ve long predicted, consumers are logging directly into biller sites, viewing bills, and paying them in large numbers. At year-end 2001, Gartner Group estimated that 32 million U.S. users were logging into their statements online, up from 20 million a year earlier. Of the total, 83% or 26.7 million were viewing credit card statements.1 Next month we’ll take a look at what’s happening in the online payments space, and how banks can improve the user experience.

If you’ve ever tried to explain the benefits of bill payment to your customers, spouse, or neighbor, you must check out Verizon’s Flash demo. It may have cost a fortune, but it’s worth it. Bill payment has never seemed so intriguing. Verizon effectively communicates the benefits via animation, voiceover, and a musical score; an HTML version is available for those with dial-up connections.

1Source: Gartner Group, Research Note:
 SPA-14-8984, 12/3/01



Net-Banking Usage Soars, Again

For the seventh year in a row, Net banking usage grew by more than 40% year-over-year. That’s tough to continue to do as the overall market gets larger. This year, we expect growth of 5 to 6 million households about the same number as this year, but the growth rate will slow to +25% to 35%  

Annual Growth Rate of Online Banking and/or Bill Payment Households1


1Percent change in households using any online banking or bill payment function



Major Banks Launch Account Aggregation

01-dec-003.jpg           01-dec-003a.jpg

We believe in account aggregation for the long haul and even named Citibank’s , a site for the most part outsourced to Yodlee, our number one innovation of 2000  and number five of all time. But given the sparse customer demand for the service, it was surprising how many large banks made it a priority in 2001. By year-end, 57 companies were live with account aggregation through industry leader Yodlee, with another 40 to 50 waiting in the wings with signed contracts. Registered users across all 57 live sites numbered just over 2 million according to the company. Yodlee says that about 1 million, half of all registered users, are active. A handful of banks and credit unions also offer aggregation through UMonitor, Teknowledge, and others.


PayPal Dominates Email Payments

Against all odds, PayPal has emerged the champ of alternative online payments with more than 11 million registered users in 37 countries, nearly breakeven on a cash flow basis in Q3 2001, and an IPO in registration that just might make it out in early 2002  Ignoring BillPoint’s volume at parent eBay’s site, PayPal enjoys a 90% to 95% market share in the email payments business (OBR estimate)., aka is one of several active Web sites dedicated to trashing PayPal.

But the Net pioneer has also been challenged by fraud losses, peeved customers hurt by the company’s sometimes heavy-handed fraud-fighting policies (see, left, and, and competition from Citibank (C2it, AOL QuickCash) that recently eliminated most fees in an attempt to gain share. PayPal’s focused drive to profitability has resulted in near-monthly policy tightening and fee increases. PayPal prices per transaction are now on par with MasterCard and Visa merchant services. It will be interesting to see if the company can hold on to its customer base built on free and below-cost transaction services. So far, customers seem to be sticking with the pioneer. 

Reference: CommerceNet recently published (Nov. 9, 2001) an insightful analysis of PayPal’s success written by Russ Jones of the NuVantage Group. The 18-page PDF file can be downloaded free-of-charge at



It Was the Best of Times, the Worst of Times
for Credit Card Pioneer NextCard

(A)  NextCard Was the First Pure-Play to Land One Million Customers: As of Sept. 30, 2001, NextCard reported 1.2 million cardholders with just over $2 billion in outstandings. A year earlier the company had 600,000 cardholders with $1.1 billion outstanding. Despite being torpedoed by the economy, fraudsters, and Federal regulators ultimately torpedoed the company, NextCard’s achievements during its 3-year run at the fore-front of online lending are substantial. The credit card pioneer has two listings in our Top 20 Innovations of All-Time as well as two items in our Top 10 Innovations & Milestones of 2000. Earlier in the year, before the bad news of Oct. 31 (see below), the company won kudos from many analysts as it hit the 1-million-customer mark and appeared to be headed towards breakeven by year-end.

(B)  Credit Problems and Fraud Bring Down NextCard: On the last day of October 2001, NextCard, one of the few high-profile consumer dot-coms left standing, was brought to its knees when severe restrictions were imposed by the OCC and FDIC. Regulators made several rulings that dramatically recharacterized the lender’s balance sheet, thereby causing it to be classified as significantly undercapitalized under federal banking regulations due to its risk-based capital ratio dropping below 6%.  As of Sep. 30, 2001, the company’s risk-based capital ratio stood at 5.38% compared to 17.35% on June 30. But because NextCard had been required to maintain 12% risk-based capital, the company is in need of $140 million in additional capital, an amount the company does not think it can raise as an independent entity.1 While the company still has hopes to salvage value in a sale, investors didn’t have much faith, immediately sending the company’s market cap down to about $25 million, compared to more than $500 million just a few months earlier (Aug 21, 2001).  Despite all the bad news, we believe there is significant brand equity and expect the NextCard brand to live on .


1For a more thorough explanation of the problems, see NextCard’s earnings release dated Oct. 31, 2001,


LendingTree’s Growing Popularity
Legitimizes the Online Loan Marketplace


Buoyed by a surge in demand for mortgage refis and lower-rate home equity loans, LendingTree continued its impressive growth taking an estimated 2.7 million applications in 2001, closing more than 275,000 loans, for a total volume of nearly $11 billion.2 The company estimates it grabbed 10% to 15% of all online loans in the United States during 2001. But more importantly these days, the company says its on track towards profitability within the next one or two quarters

2OBR estimates based on actual results during the first three quarters annualized



Online Share of Mortgage Refinances Surpasses Five Percent

With online mortgage sites making dramatic improvements in features, functionality, and ease of use, early adopter financial consumers are finding the Net a convenient way to refinance their mortgages. In late summer (2001), IDC estimated that more than 6% of all mortgage refinances were originated online in 2000 and more than 9% will be in 2001. The top online lenders boast some of the best financial service sites across all categories. In Q2 we gave five lenders Best of the Web designations for their innovative approaches to online lending: IndyMac, E*Trade Mortgage, E-Loan, MortgageBot, and LendingTree .


Leveraging the highly rated Quicken brand, Quicken Loans has grown to be the 27th largest direct-to-consumer lender, originating $3.1 billion in loans during fiscal 2001 (ended July 31, 2001).



ING Direct Puts Some Pizzazz into Savings Accounts


In a long overdue innovation, a major Internet bank created buyer interest in savings accounts. ING Direct earned our Best of the Web designation in Q3 with their heavily marketed savings and loan products featuring a distinctive orange ball in television ads, print, outdoor, and collateral material. The company also makes it exceedingly easy to set up and fund multiple savings accounts, making it a good choice for families running separate accounts for children or other budgeting reasons.1

1Full disclosure: OBR Editor Jim Bruene has done several consulting projects for ING Direct.



Simple Credit Card Balance Transfers Debut at Several Lenders


For years we wondered why the major credit card companies, which spend hundreds of millions marketing balance transfers, hadn’t added this relatively simple functionality to their Web sites for existing cardholders. In 2001, the feature was finally introduced at several major card companies including Bank of America, First USA, and NextCard. NextCard’s was a step ahead of the competition with a system that tapped real-time credit bureau data so users could simply point and click to make a transfer. Its system earned a Best of the Web award in February and was named to our Top 20 innovations of all time. Alas, the system is no longer operative due to the company’s drastically reduced lending capacity under the terms of its agreement with regulators.


Major Net-oriented Bank Brands Wind Down

Several of the higher-profile, and higher-cost, Net-only efforts were sold, disbanded, dramatically scaled back, refocused off-line, or merged back into their parents including (parent in parenthesis): CompuBank (sold to NetBank), Wingspan Bank (Bank One), Security First Network Bank (Centura/Royal Bank), USA Bancshares,, BankZip (Patriot Bank and 3 others), LighthouseBank (Brookline Bancorp), First WebBankDirect (Sovereign), and First-e in Europe.


Table 1

Online Banking Report’s “Best of the Web 2001” Winners




NextCard Real-time balance transfers for existing cardholders
(renamed Fidesic)
Bank-branded, turnkey email payment and invoicing system
LendingTree Loan marketplace
IndyMac Mortgage lending
E*Trade Mortgage Mortgage lending
E-Loan Mortgage lending
MortgageBot Mortgage lending
ING Direct Attractive and easy-to-use savings products

Categories: Best of the Web

ING Direct A Fresh Approach to Net-only Banking Combined with a “Best of the Web” Savings Account.

By Jim Bruene on August 8, 2001 8:50 AM | Comments

ING Direct wins an OBR Best of the Web for its creative approach to selling and servicing savings accounts. While most banks treat savings like an afterthought, ING Direct gives this overlooked product center stage. How many banks put their savings rate on the home page? (4.40% APY in upper right).



The Company


ING Direct, as you might have guessed, is the direct banking arm of Netherlands-based ING Group (US$600 billion assets; 100,000+ employees). ING Direct, fsb,  the U.S. division based out of Wilmington, DE, is one of six direct banking units. The others are in Canada, Australia, France, Italy, and Spain. The Canadian division is the oldest, launched in April 1997, even before the Web became a major factor. It boasts a customer count of 400,000 with more than US$3 billion in assets.

The U.S. unit was launched in Sept. 2000 and has attracted 230,000 customers and $2.1 billion in deposits during its first year. By 2001 standards, the company has spent relatively lavishly in its branding campaign, especially in the eastern United States, where it also opened a pricey Internet café in Manhattan. Its TV spots, catchy black-and-white except for a bouncing orange ball, tout the company’s high savings rate, which a year ago was a more eye-catching 6.50% (APY) compared to its current 4.40%. You can view the ads on its Web site.

The Products

The biggest surprise in ING Direct’s product line is what it doesn’t offer. There is nary an electronic banking service in sight: no checking account, no ATM card, no credit card, and no bill payment.

After seeing many Net-only banks sink millions into exotic transaction accounts, ING Direct decided to use the old-fashioned savings & loan model, concentrating on savings accounts and mortgage lending. The company also offers a revolving loan product and certificates of deposit.

The entire brand, and all products, are wrapped in an appealing orange name and logo: Orange Savings, Orange CDs, Orange Loan Account, and Orange Mortgages. The Web site and collateral material all use an orange-and-blue color scheme with orange balls directing the eye to key navigation choices. And the biggest surprise came in the mail when the first paper statement arrived. It’s the first we’ve received that was obviously designed by someone outside the IT department. The statement includes a large orange in the upper left-hand corner that highlights the interest you earned during the statement period. That’s great relationship marketing.

ING Direct’s elegant funds-transfer function features a simple interface where funds can be transferred among ING Direct accounts and to/from outside account. Funds can be moved immediately (far left), at a future date (middle), or set up on a recurring schedule (far right).

Note: (1) The current balance is placed next to the account name to cut down on transfer mistakes.

(2) The bank disables the browser toolbar within the online banking area so navigation is cleaner.


ING Direct’s online newsletter, appropriately named “Bright Spots,” is gorgeous and customer oriented. It’s delivered via PDF plug-in. On a broadband connection, it’s a great solution, but at 1.4 MB too slow-going for dial-up users. The bank should add an HTML version for the 56k crowd, or at least warn users before dropping a 1.4 MB download on them.




Conventional wisdom holds that savings accounts, while a profitable adjunct to a customer’s checking account, are unproductive to sell as a stand-alone product. In the bricks-and-mortar world, where checking accounts rule, that logic is undoubtedly correct. But in cyberspace, where you can’t even give checking accounts away, the math is different. Even low-balance savings accounts, equipped with ACH funding, quarterly paper statements, no check processing expense, and virtually no customer service, can provide a positive contribution1. And if the company can cross-sell enough revolving credit and mortgages, they could turn an acceptable profit for its parent.

We think ING knows something that Compubank and SFNB never figured out; after all, ING has been running a successful direct banking operation in Canada since early 1997. If you combine good rates, easy funds transfer (e.g., ACH), and attractive packaging, you can build accounts and balances.

During its first year, the company added nearly 5,000 accounts per week. An impressive rate, considering it took SFNB several years to get its first 10,000. Of course, ING Direct has a marketing budget that far exceeds most online competitors. But its marketing would be in vain if it didn’t have such a compelling product.

But ING’s apparent success isn’t just from throwing money at the problem. If that were all it took, and Wingspan would be the biggest banks out there. From top to bottom, ING Direct has built an elegant and well-executed online bank, from its Web site to its toll-free customer service and monthly paper statements.

That said, ING’s delivery is far from perfect. For example, it’s online customer service, both from an information standpoint (FAQs) and availability (no prominent links) is surprisingly weak. Following is a list of overall strengths and weaknesses of ING Direct’s online services.

1Full disclosure, OBR’s Editor has consulted for ING Direct in the past.

2We use “contribution” in the accounting sense, where the variable revenues are greater than the variable expenses, therefore providing a positive contribution towards paying fixed costs, and hopefully an overall profit.



  •     Great brand and positioning, the Orange is appealing (no pun intended) and memorable; the “get back to basics” tone is right for the times
  •     Superb Web site design: graphics, layout, navigation, copy-writing
  •     Users can choose account nicknames, an essential feature to encourage multiple savings accounts (college fund, junior’s allowance, etc.)
  •     It’s very easy to setup an additional savings account after the first is established; it takes less than 60 seconds using the Open New Account tab within the online banking area
  •     Transfer Money can be used to move money within your ING accounts or to/from an outside account(s)
  •     Transfer Money also features future-dated transfers and recurring transfer setup
  •     Excellent online newsletter
  •     Refer-a-friend program: the referral source gets $10 and the new account gets $25; we like that 70/30 split of the bonus pot; its good for everyone
  •     Within the online banking session, the browser toolbar is disabled, forcing users to use the bank’s navigation (for the most part, this works well, although there are a few rough spots)
  •     Opt-in and changeable marketing preferences
  •     Attractive consumer newsletter delivered online via PDF
  •     7/24 customer service; a rare show of customer support from a Net-only bank these days
  •     Outside accounts authenticated using the two-deposit algorithm pioneered by PayPal (although interestingly, you don’t have to verify the outside account for the initial deposit)



  • Why the café in Manhattan? (And another set to open in Philly.) It seems like fluff at best, even counter productive, given their company’s “back to basics” positioning. But we don’t spend much time in NYC, so maybe we are missing something. Check it out yourself on E. 49th between Park and Madison Avenues.
  • And speaking of fluff, the company recently added the above shop@INGdirect logo to a prominent position on its home page when we clicked on it, we expected to see a clever pitch for savings accounts or loans, but it’s a link to its merchandise store to buy hats, shirts, and orange Slinkys, even a $525 mountain bike. The stuff is cool, kind of Kozmo-ish (oops! not a good association), but does anyone really want to pay money to advertise their bank? It seems like a colossal waste of prime home page real estate; the link to the company store should be buried in the About Us section, where the bank groupies will find it anyway. Now, should I get the ING polo or New Zealand rugby shirt?
  • No support for wire transfers, even for account funding.
  • No online method for adding additional outside accounts to move money to/from (only the first account used to fund the initial deposit is setup online); a laborious snail-mail procedure is required to add additional accounts which includes writing a paper check to the bank “for any amount, even $1.00.” The bank should allow the use of a voided check.
  • A limit of 3 outside accounts can be linkedd
  • FAQs are very skimpy, just a single page; and don’t address many routine questions
  • Not enough discussion of security issues; it needs to provide more assurances to prospective depositors
  • No service/fraud guarantees
  • It’s difficult to login: ING assigns a random and difficult-to-remember 7-digit customer number to use for logging in; compounding that frustration is that the bank doesn’t use the password you selected at signup, instead a 4-digit PIN, also selected at account signup, is used
  • No online method or hints for retrieving forgotten passwords, you must call customer service
  • Weak email customer service; I couldn’t even find it my first time on the site, it’s hidden in a tiny link in the lower-left corner of the online module  and it’s a generic sales address, ; it makes you feel like they want to avoid online interactions
  • No Web-form for composing customer service queries
  • Within the online banking module, the toll-free customer service number is not prominently displayed (outside the secure zone it’s well positioned)
  • When establishing an automatic recurring transfer, there is no email confirmation of the setup; worse there is no online way to change, cancel, or even look at what you’ve established; you must call customer service to make changes or cancel
  • No email confirmations of deposits or transfers
  • No wire or ATM access to savings account funds; users must wait 2-3 days for withdrawals to arrive at another account via ACH (electronic transfer)

ING Direct’s email customer service support consists of a single generic email address directed to the sales department, .



Despite the long list of needed improvements, most of which are relatively minor, we really like what ING Direct is doing. They are putting sizzle into an otherwise commodity-like banking product. Given the 230,000 customers they’ve pulled in so far, it appears the American consumers agree with our assessment. Combined with its Canadian operation, ING has made strong inroads into North America. It will be interesting to see what they do next.


Note: Refer-a-friend pitch in upper right. This text rotates with an “earn $250” graphic.

ING Direct Canada  uses an entirely different look and feel.

ING is currently advertising in The New York Times YourMoney email letter. 


OBR Best of the Web Timeline

By Jim Bruene on June 2, 2001 4:19 PM | Comments

In early 1997, we began running feature stories on new online products and companies that pushed the envelope, i.e., were the first major deployment of useful new Internet-based products or features. Initially, we called them  “Innovations” or “Product of the Month.” Then during 1998 we transitioned into calling the best new features, “OBR Best of the Web,” a designation bestowed about two-dozen times since mid-1998. More than half of the winners have been in the loan arena, since that’s where we believe the most important developments have occurred. Table 1, below, summarizes the award winners in the lending space.


Table 1

OBR Best of Web Winners1: 1997 to Present


category: online lending

Source: Online Banking Report, 6/01

(1)    Best of the Web winners are chosen for “pushing the envelope” by inventing or implementing a feature not widely available. Please don’t read anything else into the designation: for the most part, we have not checked the performance of the feature, the technological underpinnings, or even the business case. We are also not saying that a Best of Web winner is a superior company. That usually has little to do with the original invention and everything to do with the implementation.

(2)    Two-time winner; also won again in 2001 for new features


Online Mortgage Lenders Pioneer Innovative Features

Table 2

OBR Best of the Web 2001 Winners


mortgage, auto, and/or home equity

Source: Online Banking Report, 6/01; sites reviewed during May 2001

mtg = mortgage; heq = home equity loans/lines; auto = automobile loan; pers = personal loan/line; cc = credit card; biz = small business loan/line

*via link to a third party Web site


A Look at the Cream of the Crop

Table 3

OBR Scorecard: The Best of the Best

mortgage, auto, and/or home equity

Source: Online Banking Report, 5/01

(1) Evaluated in May, prior to a Web makeover, and in LoanDirect’s case, a name change and rebranding to E*Trade Mortgage

(2) LendingTree is great for rate shoppers IF they are willing to submit a complete loan application; otherwise there is no rate info. available

When we set out to find the companies pushing the envelope in online lending, our first stop was Gomez Advisors  Fortunately, it had just released its Spring Mortgage Scorecard  so we were able to look at very up-to-date evaluations. And we were impressed with what we found!

The top five lenders offer numerous innovative and customer-friendly features; by the time we’d looked at just the first 5, we’d compiled more than 50 pages of notes on innovative services. If you want a state-of-the art loan center, become familiar with the five mortgage superstars listed above (Table 3).

If you want to look even deeper, check out some
of the other top scorers in Gomez’s Ease of Use category Table 4, right). In addition to the five previously mentioned, (a division
of GMAC) and East West Mortgage  scored well. Also, in the top eight are and Intuit’s Quicken Loans .

Table 4

Gomez Rankings by Ease of Use: Spring 2001

grouped by similar score (within 25 basis points)

Lender (parent company)


1.  IndyMac


2.  E*Trade Mortgage (was LoansDirect)


3. (GMAC)


3.  East West Mortgage






6.  E-Loan


8.  Quicken Loans (Intuit)


9.  Nexstar


9.  First Union


9.  PHH Mortgage (Cendant)


12. Regions Mortgage


12. Washington Mutual Mortgage


12. Countrywide Home Loans




12. Charter One Direct


17. Morgan Stanley Dean Witter Home Loans


17. Homeside Lending




20. GMAC Mortgage


Source: Gomez Advisors,  5/01

*similar scores grouped together


Conversion Percentages

According to Gomez, a wide gulf lays between the results of the best and worst online lenders (Table 5, right). For example, the best site was able to convert 12% of  site visitors into applicants vs. 0.3% for the worst, a 36-fold difference. But you shouldn’t read too much into these statistics. Highly trafficked sites would likely fall towards the bottom of the conversion percentage range. Without more data on site traffic, loan size, credit quality of applicants, and loan profitability, these percentages aren’t particularly meaningful.


Table 5

Gomez Mortgage Application Performance






% of visitors starting application




% of started applications completed




% of completed applications that closed the loan




Overall % of site visitors closing a loan





Source: Gomez Advisors, , 10/00; identity of the lenders was not disclosed

Categories: Best of the Web

The Best of the Web Winners for Online Lending (intro)

By Jim Bruene on June 1, 2001 4:12 PM | Comments

Originally, we had planned to conclude our look at online lending last month with the second installment. However, we found so many new innovative features at the top online mortgage lenders, we extended the report for one more month to bring you full coverage of E*Trade Mortgage (formerly LoansDirect,
MortgageBot, E-Loan, and IndyMac. Previously, we covered the other top-5 lender, LendingTree .


E*Trade knows how to sell complex consumer products without the bricks and mortar. Here they put a face on the mortgage process, literally, with pictures, phone numbers, email addresses, and real-time availability of each person handling the loan.

As good as these sites are, we are just beginning to see the real power of the Internet for online lending. Compared to traditional methods, the Internet provides a better loan shopping and purchasing environment for the majority of borrowers; they just don’t know it yet. It’s up to you to show them the light.                                                                             
Categories: Best of the Web

CheckSpace Aims to Help Banks Compete with PayPal

By Jim Bruene on April 2, 2001 1:18 PM | Comments


Building the Transpoint for small and microbusinesses

CheckSpace starts with a fast loading, relatively uncluttered interface. Within 30 seconds, a new user can get a good understanding of what CheckSpace does, and where to get more information, or signup.


The Company

CheckSpace Inc.
43 employees
13427 NE 16th Street
Bellevue, WA 98005
(425) 643-9905

Seattle-based CheckSpace was founded in March 2000 by two Microsoft alumni, one with experience developing Internet Explorer and the other involved in the TransPoint ebilling and payment company.1 CheckSpace’s 43-employees are attempting to provide the best epayment solution for small businesses. The company is currently offering the service directly, targeting individuals and businesses with fewer than 100 employees. But it is actively soliciting top-250 banks for co-branded or “powered by CheckSpace” offerings.

The CheckSpace ePayments Platform is the first payments solution built with the Microsoft .NET Enterprise Servers. The company claims that with this server, XML (Extensible Markup Language), and SOAP (Simple Object Access Protocol), it can complete complex projects in under 30 days. Its first banking installation was at CompuBank in mid-March. 

1Transpoint, a joint venture of Microsoft and First Data, was sold to Checkfree in 2000 in a stock transaction valued at $1 billion.


Management Team
: CheckSpace employees have experience in designing commercial payment and transaction systems for the U.S. and international payments working at Microsoft, First Data, and Bank of America. Both co-founder, Bassam Saliba, and Director of Biz Development, Dan German, where involved in Transpoint, the Microsoft/First Data ebilling joint venture sold to Checkfree in 2000.





Naseem Tuffaha

Previously Director of Web Services in the Developer Relations Group at Microsoft and led Microsoft’s Internet Explorer efforts. Naseem started his first business while in college.
Bassam Saliba

Holds eleven issued and pending patents for innovative technology. Co-Founder & CTO of TransPoint (Microsoft, Citibank, and First Data Corporation’s ebilling technology venture). Before TransPoint, Bassam participated in, and led development teams for, the first MSN e-Commerce servers.
Dan German

Director of Business Development Veteran of 17 years in the payment industry primarily high-volume transaction systems for banks, merchants, and EFT networks. At ACI German led the development of the Trans24 Settlement Manager. At First Data Corp., he was a senior member of the Bank Systems Integration group; at TransPoint, Payment System Program Manager and Director of Bank Integration. His most recent position at First Data was Director of Emerging Technologies for First Data Resources.


Funding: CheckSpace secured $11 million in a first round of funding in October 2000 from the following venture capitalists and angels.

Investor Type


Lead Voyager Capital, a Seattle e-business venture firm.
Venture Capital Northwest Venture Associates
Kellett Investment Corporation
Staenberg Venture Partners
Angels Boris Putanec, Co-Founder & VP, Ariba
K.B.Chandrasekhar, Founder of Exodus Communications; currently CEO, Jamcracker
Sam Jadallah, Managing Dir., Internet Capital Group and former VP Sales and Marketing, Microsoft
Robert Pollan, Managing Director, Internet Capital Group
Scott Oki, former Senior Vice President of Sales and Marketing at Microsoft

Source: CheckSpace, 4/01


Products and Services

CheckSpace provides three types of ebilling and payment processing (EBPP) services:

·         sending payments to individuals and businesses via ACH and email (like PayPal)

·         paying bills with remotely printed and mailed paper checks (like Checkfree)

·         sending email invoices that recipients can pay via ACH or credit card (like PayPal)


How it Works: CheckSpace’s epayment services are designed to be integrated into small business Web sites and/or packaged accounting software applications. Like PayPal, payments can be made electronically between any two parties with email addresses and bank accounts. Each party to the transaction must register with CheckSpace, although a bank distributor could “pre-register” its customers to make the initial signup transparent. Unlike PayPal, CheckSpace never takes ownership of the funds being transferred. All transactions are processed through users’ existing bank accounts.



1.      The user registers with CheckSpace and provides name, email address, and zip code. CheckSpace replies with an email verification to the user, accompanied by a welcome message with instructions on how to increase spending limits and another offering $10 in transaction credits for each referral that signs on.

2.      The user clicks the hyperlink in the email, logs into their account and provides street address, social security number, and a checking account number (only one account can be entered at this time).

3.      CheckSpace verifies the information against a credit database and approves the account for up to $500 in ACH transfers each week.
Note: A bank distributor could preregister its clients, doing away with the first 3 steps.

4.      Users wanting to move up to $2,500 per week can select the optional upgrade feature.

5.      CheckSpace sends two random deposits to the user’s registered checking account.

6.      After the confirmation deposits have been posted, the user logs back in and enters the dollar amounts of the transactions.

7.      Users wanting to move up to $5,000 per week must verify their snail mail address by inputting the code mailed to them when they signed up.

Elapsed time: In our tests it took slightly less than 2 minutes to complete the first part of the application (step 1) and skim the user agreement; then another 2 minutes to complete the email and bank account portion (step 2) - a total of 4 minutes. At every step of the way, confirmation emails arrived within minutes, so we knew that our account was active and appreciated. A simple one-page welcome letter arrived in the mail a couple days later containing a code to enable us to increase our spending limit. This was followed by a phone call from a CheckSpace service rep asking if we had any questions about getting started. Unlike many new companies, the startup process was smooth, and instilled confidence in the payment company.

Sending Money (email/ACH payment)

1.      User logs in to their CheckSpace account (or creates payments in QuickBooks or Peachtree accounting software).

2.      User selects the Payment button on the top.

3.      User enters the email address of the recipient (and optional name, address, phone number).

4.      CheckSpace sends an email to the recipient announcing the payment and an email to the sender confirming the payment.

5.      Recipient registers at CheckSpace (see Registration above).

6.      CheckSpace automatically transfers the amount into the recipient’s checking account (no cost to sender, recipient pays $0.95 per payment, with the first one free each month).

Payments are made by filling out the “floating check” form conveniently displayed in a pop-up window. Throughout the program, the user interface is well thought out adequately tested.



Sending Money (bill payment via paper check)

1.      User logs in to their CheckSpace account (or creates payments within QuickBooks or Peachtree accounting software).1

2.      User selects the Payment button on the top.

3.      User enters the name, snail-mail address, and phone number of recipient.

4.      CheckSpace sends an email to the sender confirming the transaction.

5.      CheckSpace withdraws the money from the sender’s account via ACH.

6.      CheckSpace prints and mails a check to the recipient (sender pays $0.50 per payment; no cost to the recipient).

7.      Recipient cashes check.


1.      User logs in to their CheckSpace account (or creates invoices within QuickBooks/Peachtree).1

2.      User selects the Invoice button on the top.

3.      User enters the name and email address of the party being billed.

4.      CheckSpace sends the payor an email bill.

5.      Recipient registers with CheckSpace (see Registration above).

6.      Recipient authorizes the invoice and selects either ACH or credit card for the source of funds (credit card can only be used if the sender has enabled credit card payments in their account preferences).

7.      CheckSpace withdraws the money from the recipient’s checking or credit card account (no cost to recipient), sender pays $0.95 for an ACH payment (after the first free one each month), or $0.95 plus 2.6% of the transaction amount.                                                                                                              ð

1Users can also create payments in QuickBooks and Peachtree and upload them in batches to CheckSpace. The company provides a downloadable virtual printer driver that supports sending payments and electronic invoices from QuickBooks and QuickBooks Pro 99, 2000, and 2001, as well as sending payments only from within Peachtree Complete Accounting versions 7 and 8.

Pricing: Costs are similar to PayPal, with PayPal usually having the advantage for lower dollar payments, $25 and under. But CheckSpace’s $0.95 flat-rate ACH price would be less on larger payments. The larger the payment, the bigger the savings, e.g., on a $500 ACH payment, CheckSpace would charge $0.95 vs. $11.35 for PayPal’s instant ACH or $5 for PayPal’s 3-day delayed ACH (see Table 4, below). But if the user paid by credit card, CheckSpace’s $13.95 fee would be $2.60 higher than PayPal.

Table 1

Pricing: PayPal vs. CheckSpace

Third-Party Providers:  Electronic bill pay is through MasterCard’s RPPS (sponsored through Mellon); paper bill pay is through FiServ; and clearing through Bank of America.

Wireless  Access: Users may schedule new payments and approve payment requests directly from a Web-enabled phone.

Web Tools: The CheckSpace icon can be added to auction-item listings or Web sites. When a client clicks on the link, a pop-up eCheck appears with a quick member signup so users can schedule a payment without leaving the merchant’s site. Merchants choose whether to accept credit cards or eChecks (ACH) only.

Table 2

CheckSpace vs. PayPal

Source: companies, 4/2/01

1Features and prices for PayPal Business accounts; PayPal Personal accounts are entirely free to receive and send but have fewer features and are only allowed to receive up to $100 per month in credit card payments; individuals can upgrade to PayPal Premier which offers the same features and pricing as PayPal Business.

Pricing to Financial Institutions:
The cost of CheckSpace’s ePayments Platform will likely run into six-figures counting the initial licensing fee, annual maintenance fees, and per-user charges. These costs could be partially offset with transaction revenue sharing. The platform can be customized for your needs; for example, if you already offer bill payment, you can turn off the paper bill payment portion of the interface. For more information, contact Dan German, Dir. Biz Dev., (425) 643-9905, .


We are bullish on the entire EBPP market and believe CheckSpace has developed a robust epayment product, earning our second Best of the Web designation this year. The winning aspects of its product line include:


  • Integration of paper bill payment with email payments: CheckSpace is the first company to stitch together the “old” Checkfree-style bill payment, paper-based service with the “new” fully electronic PayPal-type email payment product, giving the user the flexibility and control to handle all payments in the most expeditious manner possible, all from one user-interface.
  • Allows microbusinesses to accept credit cards easily and cost effectively: Securing a merchant account to accept credit cards has historically been a troublesome part of starting a business; CheckSpace solves that problem with its cost-effective email invoice and payments solution. Even though its pricing is somewhat higher than PayPal’s, the service should compete well, if and only if, it also carries the endorsement of a trusted bank or financial services brand name.
  • Simple invoicing for microbusinesses: Although most small businesses already have an invoicing solution either through QuickBooks or other accounting or invoicing software, the microbusiness with just a few invoices each month, often uses a word processor for the task. CheckSpace’s invoicing option is a quick and easy way to zip invoices via email. Recipients then have the option of printing the invoice and mailing a paper check, or signing on with CheckSpace to pay electronically via credit card or ACH. It’s an excellent way for microbusinesses to maintain state-of-the-art services to their clients, without investing the time to learn a new software package.
  • Works in tandem with an existing checking account: All transactions flow through the user’s existing checking account; unlike PayPal, no new transaction account must be established. Bank partners could even eliminate the sign-up process, making CheckSpace an automatic feature of the checking account; much like a money order is an optional checking account feature at the teller window.
  • Integration with QuickBooks/Peachtree: Although we have yet to test CheckSpace’s virtual printer driver with QuickBooks and Peachtree, assuming it works as described, this integration makes CheckSpace’s system much more desirable, although Intuit is currently offering similar functionality via hardcoded links to Checkfree and PayPal.




As much as we like the product, we have serious concerns about the viability of the business model. Even with the most optimistic assumptions, it won’t be easy for CheckSpace to gain a foothold in the marketplace. Why?

  • Indeterminate near-term demand: Microbusinesses, the target market for the service, are just now beginning to adopt simple online banking functions such as balance inquiry.  These new users won’t be ready for email payments and invoices for a few years, and the hardcore early adopters already use PayPal and have little incentive to switch.
  • Pricing confusion: There are different prices depending on whether you are a sender or recipient, whether the payment is sent by paper or ACH, and whether the funds are drawn from a checking account or credit card. It’s a bit much for a new user to comprehend. We also think the paper vs. ACH pricing is flawed. Senders are incented to use ACH to avoid the $0.50 per check fee. But this shifts the transaction cost to the recipient, who pays nothing to receive a paper check, but is charged $0.95 for each ACH (after the first free one each month). Unless it’s a real hassle to cash the paper check, and most businesses visit their branch more than once per week, why would a payee take the time to sign up with CheckSpace just to pay nearly a buck for each item?
  • Entrenched competition: On the email payments front, CheckSpace must contend with the fact that most early adopters, and virtually all serious eBay sellers, already use PayPal or BillPoint. Most don’t want nor need another epayment option. And the referral incentive of a $10 usage credit isn’t enough to provide much of a viral marketing boost (cash is king). On April 24, only 85 eBay auction listings offered CheckSpace as a payment option compared with more than 2 million mentioning PayPal.  On the more traditional electronic bill payment side, Checkfree, which has dominated the industry for more than a decade, is offering similar functionality in its WebPay for Small Business product (see the full report for a description of Checkfree’s Web Pay for Small Business
  • Overlap with other bank products: Most of the banks that CheckSpace is targeting already use bill payment from Checkfree or others.  Banks considering adding CheckSpace to their current online banking product sets for small businesses must be concerned about how the new payment alternatives fit with existing bill pay, ACH, merchant services, and wire transfer services. We are especially concerned about the overlap in bill payment. It’s hard enough for banks to service a single bill payment program from Checkfree, Metavante, Online Resources or others. Few banks need more bill payment headaches likely to result from adding another vendor to the list. A simple solution would be to disable the paper bill payment option from the CheckSpace product, but that eliminates a key product advantage - the single user interface for both paper and ACH payments.
  • Limited track record: CheckSpace did install the ePayments program for CompuBank’s small business section in March 2001, but NetBank’s plans for the service are not known at this time.  Until the company signs some deals and/or gets a year or two of experience servicing a critical mass of users, potential bank buyers will be very cautious, and the lure of providing an equity participation to early customers isn’t much of a motivator these days.
  • Customer service: Our initial experience with the service is very positive, including same-day response on an emailed question, it’s unknown how CheckSpace will deal with the customer service complexities of a co-branded payment service. It’s an area that warrants much discussion and testing before entering into any arrangement with the startup.


  • Payment timing: Because CheckSpace sends payments through the mail and ACH, and the company is trying to reduce payment risk, a 3-day delay is built into the payment window for most payments. The only exception is that paper payments of less than $100 from verified bank accounts are mailed the next business day. In our first experience, sending a $4 payment, the earliest we could schedule it to arrive at the payee was 7 business days later (8 counting the day the payment was initiated payment, 5:30 pm PST). To a new user thinking they would be making speedy payments, it’s a poor first impression. After calling the company, we learned that the extra 3 days was due to our bank account being unverified, something not clearly explained on the Web site. We like PayPal’s approach much better. Even on ACH payments, users have an instant payment option, where a hold for the payment amount is placed on the user’s credit card. If the ACH item is returned for any reason, the payment is charged to the card. In most cases, the hold is transparent to the user, so both the sender and recipient perceive the transfer as instantaneous.
  • Cost to the financial institution: Although, everything is negotiable in Net banking these days, CheckSpace talks about six-figure contracts. While that might make sense for a top 20 bank, which would spend 10 or 20 times that much developing similar capabilities, smaller financial institutions are going to find it difficult to justify any major expense to deliver a service that will only be used by a small minority of its online banking users in the near term.

Opportunities for Financial Institutions

  • Large banks: Large banks, looking to keep up with Bank One (eMoneyMail) and Citibank (, which each have proprietary email payments, could private-brand the email payments component of CheckSpace for a fraction of developing the service from scratch.
  • Smaller banks targeting small businesses: CheckSpace’s invoicing and credit card acceptance capabilities could be an attractive component of a microbusiness package account. Every business wants professional and cost effective billing and payment options. With CheckSpace, even a one-person operation can effortlessly offer paper, ACH, and credit card payment options for all their billings.
  • Smaller bank and credit unions targeting individuals: Unless CheckSpace develops a lower-cost option, it appears the service may not be as cost effective to roll out to individuals; however, we encourage you to contact the company as business models and pricelists change faster than the wind these days.
  • Viral marketing: Every time a payment or invoice is sent to a business or individual, the recipient must self-identify in order to collect the payment or pay the invoice electronically. This sign-on provides CheckSpace, or its bank partner, with an opportunity to sell payment and other banking services to the recipient. The downside is that recipients may be unwilling to register with the service just to receive your payment or pay your invoice electronically. 

Juniper Spins a Card Web - Best of Web Review

By Jim Bruene on December 6, 2000 8:15 PM | Comments

Juniper Spins a Card Web

Home Page

Home page. The design and layout are excellent, but it’s slow loading and a bit busy for our taste. The page is dominated by the big HELLO and photo of Sherry, the “customer champion.” Normally, we think home page photos are a waste of your customer’s time, but Juniper makes it work with the “now you have a champion” theme.

There are three choices to move forward: apply, register (if you’ve already received an invitation in the mail), or login.

Ever since we first heard about Juniper earlier this year, we figured they’d be a Best of the Web winner. We were right, although they are not as far in front of the pack as we expected, especially given their talent and funding. But if they can execute on just half of Dick Vague’s vision, they should be a leader for a long time.



The Company: Juniper Bank is a privately funded Net-only bank based in Wilmington, Delaware. Although it calls itself a bank, the company is more like NextCard than NetBank. The founders, Dick Vague and Jim Stewart, are veterans of Bank One’s First USA unit and were key figures in First USA’s high-profile WingspanBank venture, a previous OBR Best of the Web winner. The 250-person company launched its bank on Oct. 24. They are focusing first and foremost on credit cards, and will cross sell checking, bill payment, and other services to card customers (during the first five weeks, only 20% of Juniper card customers added an additional service).

Key Strategies (per Dick Vague interview and presentation at Retail Delivery 11/30/00):

  • Minimize the time consumers spend on the bank’s Web1
  • Alert customers when financial matters need their attention rather than forcing users to remember themselves (via Message Center and email messages)
  • Focus on Net delivery and be known as THE provider in cyberspace (Vague says the specialist will beat the generalist)
  • Exceed customer expectations to gain referrals

1This is the opposite strategy of most banks and Web companies and is in sharp contrast to those advocating a portal strategy.

The First 55 Days: On Dec. 18, less than two months after launch, the bank says it has 50,000 customers and more than $100 million in card receivables. Doing the math, that’s an average of $2,000 per customer. Not bad. It took NetBank more than 3 years to bag its first 50,000 accounts (only 1.5 years to get $100 million in deposits).

Vague told us on Nov. 30 that 80% of the first month’s customers were single-service credit card customers. He also expected to have 50,000 to 100,000 customers by yearend, of which 90% would be credit card customers. Based on those conversations, we estimate Juniper had no more than ten thousand checking accounts at yearend. But given the confusing initial funding process, few of the accounts have money in them.

Investors Juniper has received more than $114 million in venture capital in two rounds in 2000. Investors include:

  • Aether Systems (provider of Juniper’s wireless offerings)
  • Benchmark Capital (provided first round funding of $20 million; partner Bill Gurley is on board)
  • Fifth Third Bancorp ($45 billion bank headquartered in Cincinnati, Ohio)
  • J. & W. Seligman & Co. Incorporated (New York and Palo Alto) 
  • Kemper Ventures (venture capital firm backed by the Kemper Insurance Companies)
  • Kingdon Capital (New York)
  • Maverick Capital (Dallas, TX)
  • Sonera Corporation (Finland)
  • Total Technology Ventures, LLC (headquartered in Atlanta, GA and affiliated with Synovus, provider of Juniper’s bank and credit card products)

Management Team:

The four execs listed on Juniper’s Web are all from First USA: Richard Vague, CEO; Jim Stewart, President; Clint Walker, General Counsel; and Ben Brake, Director of Marketing.

Partners: Juniper doesn’t have a banking charter itself. Banking services are delivered through Columbus Bank and Trust ($3.6 billion; Columbus, GA), a division of Synovus Financial. Credit cards are issued through Total System Services, another division of Synovus. Insurance is from Answer Financial, loans are from E-Loan, and bill payment services are from Checkfree. Aether Systems handles wireless service development, eProfile from Sanchez provides outsourced bank operations technologies and account processing for deposit accounts, and Loudcloud provides software infrastructure services.

Productss: Juniper’s focus is credit cards, credit cards and credit cards. It also hopes to attract checking account and bill payment users. The bank rounds out its product line with insurance and loans offered through partners.

Juniper offers a simple deposit product line just three choices: interest-bearing checking, savings, and a 3-month CD. The bank doesn’t offer a money-market deposit account or the popular 6- and 12-month CDs. Deposits carry modest interest rates, considerably lower than most Net-only banks. For example, 1% interest on checking balances below $10,000 along with a fee of $6.95 per month if balances fall below $1,000. Savings pays only 3.5% up to $10,000, then 5% on higher balances .

On its Web site, product information is presented in a clear manner, but there is little depth to the information, and no way to compare Juniper prices to others.


Juniper Product Line


Source: Juniper Bank, 12/15/00


Marketing Vague outlined the following marketing budget to us on 11/30/00:

  • 70% direct mail
  • 30% pay-for-performance online advertising and/or sponsorships

Initially, 80% to 90% of DM will be feature rates. Juniper is testing 15 to 20 other promotional offers such as, free subscriptions, to see how they compare with rate offers.


Core features revolve around the credit card:

  • competitive rates
  • no overlimit fees
  • no credit life insurance (until something of value to the consumer is available)
  • fewer late fees because the bank will help customers avoid them by emailing reminders to pay, complete with a link to an ACH (electronic) payment function
  • wireless access
  • superior customer service, especially via email and Web chat

Coming in early 2001 (per Vague, 11/30/00):

  • account alerts (already featured prominently in Web copy)
  • personalized customer service: users will have a designated team supporting them, inquiries will be routed to the team
  • account aggregation: although Vague doesn’t think it will be used much in 2001, he wants to have it on the menu so the bank is proficient in its delivery when it does take off
  • more robust Message Center functions



Web Site

Juniper decided not to use an experienced Web designer to build its Web site, instead turning to an industrial design firm experienced in the production of tangible products. The overall design is good: the Web site is graphically intriguing, navigation is intuitive, and the casual photographs of company employees do an excellent job of giving users the impression that real, live approachable people are behind the Web site. Juniper does a great job of funneling prospects towards its account application, although they need to get away from the notion that users must “apply” for the opportunity to send the bank money.

The total home page word count is approximately 125, a little higher than we like but well within the tolerance level of most Web users. Until recently, there were several serious design flaws. First, as we mentioned last month, the bank required 128-bit encryption (Netscape 4.5 or higher, IE 4.0 or higher) before you were even allowed on its home page. So the first time you visited, you were forced through a “browser check” to determine if you pass muster. We won’t belabor the point, especially since it’s been fixed, but this was a terrible first impression to make with new visitors.

More troublesome is the slowness of the Web site. After losing our cable modem for a few days, we used Juniper’s Web in 56k mode and it was painfully S…L…O…W, at least from our Seattle vantage point (logging in through a Netcom dial-up service). The brochure part of the Web site is better now that it’s not running in encrypted mode, but the online banking functions just crawl along. It’s like having your credit card authorized with every click of the button. Even though the layout is superb, routine tasks, like paying a bill, simply take too long. For example, to pay a bill to a merchant you’ve already set up takes 2.5 to 3 minutes1 if you include the time to login to the site. Even if you are already logged in it still takes up to 2 minutes,1 especially if you accidentally schedule the payment for a weekend day, causing the payment to be rejected. In comparison, you can write a paper check in less than 45 seconds (not including finding your checkbook and stamps or dropping it in the mail).


Layout/navigation: B

Graphics/typography: A

Speed: C-

1Even after learning the system, it took us 3 minutes and 12 seconds to make a single payment to an established merchant, 45 seconds of the total was the login time. We could also have shaved 30 to 45 seconds off if we hadn’t inadvertently chosen a payment date that fell on a weekend, although the bank doesn’t provide any assistance in avoiding that mistake.


The Demo

Juniper has a great Flash demo and an HTML version for dial-up modem users. But even the HTML demo is too slow for dial-up users, taking 30 to 60 seconds to draw each page1, and it’s dozens of pages long, although you can skip around by using the a drop-down navigation box.


For fast Web connections: A-

For dial-up users: C

1Tested on a 56k modem on a Dell 350 MHz desktop connected to Netcom in Seattle.

Demo Screen for Wireless Access

The first screen of the wireless part of the demo really hammers home the potential convenience. But we doubt more than a handful of customers actively use it.


Application Process

We submitted two checking/savings/bill pay applications. Both applications were seriously bungled in completely opposite ways. The first application, on Dec. 11, 2000, was not approved online and received a “we’ll get back to you” response. Presumably, underwriting choked on the mailing address we used. We wanted our statements to come to our business address, a relatively common request. If the bank’s risk policy doesn’t allow that (which is understandable), the bank should say so, rather than reject a solid application. More than three weeks after submitting our original application we finally received a cryptic 1-page letter (via snail mail) telling us to call the credit department within 14 days or our application would be voided.

The second application, submitted four days later (Dec. 15) under a different name, was approved in less than 10 seconds; however, our browser crashed during the middle of step three. We logged back in, reentered much of the data and submitted the application less than 10 minutes later. This time we were approved in less than 7 seconds. We later discovered the bank treated this as two separate applications and set up two checking, savings, and overdraft protection accounts. We then received two pin mailers, two ATM cards, and two boxes of checks.

A consistent omission through all three applications was the bank’s utter lack of contact via email or any other method to welcome me to the bank or ask if I had questions. Also, the duplicate application and address verification should have triggered emails from customer service. There is no excuse for leaving the customer hanging.


Application form/process/disclosures/help: A-

Handling of simple applicants (with name/address match): B

Handling of difficult applicants (without name/address match): F

1On day 19, we emailed the bank to find out what had happened to the application. They told us that an address verification letter would be sent soon.


Putting a Clock on It1









Type URL, download homepage (does not include approximately 20 seconds for browser check on first access)




Choose Apply, download first page of application




Complete first page of application, press enter




Download second page of application




Complete second page of application, press enter




Receive message, “Sorry we need more time to review your application”, press Next2




Returned to home page with no further instructions3

Source: Online Banking Report test, 4:59 PM PST, Friday, 12/11/00; time recorded in minutes:seconds

1Using a Dell P400 desktop computer hooked to cable modem

2In a later test, we received application approval in less than 10 seconds, then went on to setup accounts.

324days later we finally received a one-page letter telling us to call within 14 days to verify some of the information on the application

Juniper tells customers that it will take five minutes to apply, with approval in as little as 10 seconds. Our tests show these statements to be accurate. We completed the application in four minutes and received answers in 7 to 10 seconds.


Step 1: Application (bottom)


The first page of the application includes personal information and username and password selection (not shown).

Disclosures are displayed on the bottom of the first page, a good way to ensure that mandatory disclosures are viewed. The disclosures themselves are nicely laid out and not in frames, so they are easy to print.


Step 2: Application (top)

The user interface is consistent throughout the application.


Step 2: Application (bottom)


Juniper requires household income even though we are only “applying” for a checking and savings account. This will cause some applicants to drop out. The help button on the right doesn’t provide much clarification, it just says, “minimum income levels are required to qualify for certain products and vary by product.” The bank should consider making the “Employment and Finances” questions optional, but with an incentive to get users to volunteer the information.


Step 3: Approval / Rejection

Thwarted again). After inputting all my personal information, all I get is a 2-sentence rejection saying:1

“We’re sorry, but we’ll need more time to review your information. Please do not reapply. Click below and we’ll notify you by email as soon as possible.”

After clicking the Next button as instructed, we were dumped back to the home page, with no information on what to do next. The “please don’t reapply” is especially galling, a don’t-call-us-we’ll-call-you brush-off. More than 3 weeks after hitting submit, I still haven’t heard a word from the bank; not even an autoresponse email. I am able to log in with my username and password, but no accounts have been established and there is no indication that I have an application in process.


Step 3: Approval (2nd try)

1At least Wingspan thanked me for applying. Have the First USA veterans forgotten their manners?

 Since we hadn’t heard back on our original application, we submitted a new one using a different name (5 PM PST, 12/15/00). This time our information must have synched with their database, not only did we get approval for a deposit account in just 9.7 seconds (using Navigator 4.6 and a dial-up 56k connection), we were also offered a preapproved MasterCard, even though we hadn’t asked for one. We accepted the offer even though the credit limit was unspecified (later we would find out that it was the largest unsecured line we’d ever been granted, $25,000; apparently Juniper isn’t shy about granting substantial credit lines.)

Unfortunately, as we reviewed the terms of the MasterCard offer, our browser crashed. We logged back into our application and completed the process, but we ended up with two of every account except the credit card .


Credit Card Cross Sell

Flaw in the popup. When you ask for more details on the credit card offer, a new browser window pops up. Unfortunately, in both IE 5 and Netscape 4.6 you can’t read all the text, and it’s not scrollable. A small but frustrating bug that probably cuts their cross-sale rate by a third or more. We accepted the MasterCard to see how it worked. After checking the box, the terms and conditions were presented. The applicant could still cancel at that point. The terms stated that an appropriate credit limit would be chosen after reviewing the applicant’s credit bureau information. No credit limit was communicated during this initial session.



Summary of Application Problems


Date Submitted



# 1

12/11/00 The bank said it needed more time to review the application; in a subsequent communication we learned that the problem was that we used our business address instead of home address) None, 16 days later we still hadn’t heard from the bank so we emailed customer service (Dec. 27); we were told an address verification form had recently been sent; on Jan. 4, 24 days after our application we finally received a one-page letter (postmarked Dec. 29) telling us to call the credit department within 14 days or our application would be voided; not much of a welcome.

# 2

12/15/00 Our application was instantly approved, but our browser crashed during the initial signup process while we were looking over the details of the credit card offer. We logged back in to our application and resubmitted it. Only later did we find out that we had been setup with 2 checking accounts, 2 ATM cards, 2 credit lines, and 2 savings accounts (but just a single credit card because the crash came before we accepted the card). Evidently Juniper’s servers took our activity as two separate account applications even though we’d never fully completed the first one. If you get two identical applications within a couple minutes, your system should be smart enough to suspect a mistake. We weren’t even asked if we wanted two accounts, and since Juniper doesn’t provide any type of purchase confirmation, we had no idea that duplicate accounts had been created until we logged in for the first time. None, when we questioned the bank about why we had two of everything, they simply told us that’s what we had requested, they made no offer to rectify the duplication.

Source: Online Banking Report tests, 12/11/00 and 12/15/00

Immediate Post-Application Experience

Juniper made one of the worst mistakes a company can make, they took our order for granted, not even bothering to send a simple email thank-you. Our application was essentially rejected, apparently because I used my business address instead of my personal one. The post-application experience was non-existent. The only communication was a 1-page letter 24 days later telling me to call the credit1 department.

The second application resulted in a steady stream of snail mail, but it was slow coming (see left). There was no email confirmation, no email thank-you, no welcome messages in the Message Center, no telephone calls, no welcoming letter, and no help getting money transferred into our account. After several weeks of trying, we still have been unable to get a non-Juniper account set up to fund our account. Even worse, two emails inquiring about the status have gone completely unanswered .

The first post-application contact was a one-page, black-and-white PIN mailer received 11 days after submitting our application (see table left). We still haven’t received the promised “welcome kit” more than 3 weeks later. It was a total failure in getting our relationship off to a good start. Was the Juniper team asleep in during the Marketing 101 lecture about the importance of creating a good first impression?

One thing done very well, at least from the perspective of the bank, was the automated credit card upsell. But again there were no communications after we accepted the offer. We didn’t even know they had given us a generous $25,000 line until we logged back in and looked it up ourselves.


New Account Fulfillment
date each piece received (in Seattle)1


App 1

App 2*

Applied Dec. 11 Dec. 15
Email confirmation none none
ATM card PIN mailer --- account #1

-- account #2




Paper checks

-- account #1

-- account #2




ATM card

-- account #1

-- account #2



Credit card PIN mailer   1/03
Verification letter 1/04 n/a
Credit card   1/06
NSF letter from Checkfree3   1/06
Welcome kit    
1st statement    

Source: OBR, 12/00

1Only items received through 1/6/01 are included

2Application #2 resulted in two accounts being established due to a browser crash during the process, see p. 19

3Our first bill payment, initiated from our new Juniper account on 12/21/00, resulted in an NSF notice from Checkfree, even though we had a sufficient overdraft line of credit (see p. 26)




1This will make no sense to the average consumer, who will think, “Why the credit department? I wasn’t applying for anything, I just wanted to send you my money!”

Setup Accounts

Account setup was a mess. Approved applicants are given the impression they can begin using their Juniper accounts right away. In fact, the bank provides a list of eight items that they recommend doing right away. The problem is, only six of the eight can be accomplished in the initial session (see screenshot, next page). A few other problems we encountered: (1) After more than 3 weeks we still have been unable to get a non-Juniper account added so that we can electronically fund our account; (2) Our first bill payment was mailed promptly to our payee, but evidently the bank’s overdraft protection doesn’t kick in on ACH debits, so Checkfree sent us a letter explaining that Juniper had rejected the ACH debit to offset the check that had been sent on our behalf, Checkfree even warned us of possible fees from our bank; (3) New customers face blank screens when they log in, no transactions, no statements, no messages in the Message Center, and no way to check the status of their new account fulfillment process, which appears to take nearly a month.





Step 4: Setup Accounts  

After being approved for our account, we were presented with a list of 8 items that we were told to do now. But other than setting marketing preferences and bookmarking the site, you can’t do any of the tasks because the bank hadn’t yet created the necessary account numbers (see Table below). A frustrating way for new customers to be greeted, akin to buying 8 CDs at Virgin Records, taking them home and finding that six won’t play until you receive snail mail confirmation from the record companies. What type of referral business do you suppose that will generate?


Juniper’s Flawed To Do List for New Customers

Task Juniper Description What You Can Really Do Your First Visit
Activate Credit Card When you receive your card, activate it immediately through Chat or call 1-877-408-8866. Nothing, because you must have card first.
Create Account Nicknames VacationAcct, My Money -- Call them whatever you want, so you can easily tell them apart. Nothing, because you don’t have an account yet.
Activate your ATM/Check Card To activate your ATM/Check Card, contact Customer Service at 1-888-232-0780. Nothing, because you have to have the plastic first.
Set Up Bill Pay Enter your recurring bills once, and never write checks again. Nothing, error message below.
Fund Your Account Putting money in your Checking, Saving or CD account activates it for your use. You can get started, but you can’t complete it electronically, because you must wait 24 hours to have a non-Juniper account verified.
Set Up Direct Deposit Automatically deposits your paycheck in the account of your choice. Nothing, because you must have a Juniper check or deposit slip to attach to form.
Privacy Options How and whether we contact you is entirely your choice. Works, see screenshot below.
Bookmark Juniper Click here to add  to your Favorites list. Works.

Source: Online Banking Report test, 12/15/00

Account Set-up Glitch

This nasty message was displayed when clicking on “Set Up Bill Pay,” one of eight things Juniper suggests new users do right away.


Move Money: Account Funding & Interbank Transfer

Funding your new account electronically is confusing. We had to click around for a few minutes before we figured it out. You must first select the “options” drop-down menu, then choose “Add a Non-Juniper account.”

Once we found the right page, the setup was pretty simple; at least it looked that way. No paper must be exchanged, although the Web site said there was a 24-hour wait period. In our test, it’s been 24 DAYS, and its still not set up, despite two emails to customer service (which have gone unanswered).

Juniper should also offer a credit card funding option so users can get started right away (many Net-only banks have offered this option for years including CompuBank, USAccessBank, and


Your Accounts: Main Page

The main page after login is well done, although the layout takes a little getting used to. It’s divided into four parts:

1.    Top: main navigation bar

2.    Upper left: online banking navigation

3.    Lower left: account navigation

4.    Middle: the active screen, at login it’s the Message Center which has been empty during our first three weeks as a customer. Also, customer service responses to user questions are NOT delivered to the Message Center, another confusing aspect of Juniper’s interface.


Privacy Option Setup

A nice touch: Users can set their privacy options choosing to opt in or out of marketing messages. The default is YES for email and snail mail marketing messages; NO for phone solicitations (will anyone change that to YES?).




Juniper is betting the farm that credit cards are what online customers will buy. But so far it is doing little to differentiate its card from the myriad of offline competitors.1 Juniper needs to put its unique benefits in front of customers on the main screen. NextCard, on the other hand, has always stressed its online benefits in a few choice words on its home page.

1The credit card is made of a unique translucent material; now we understand the bank’s cute graphic at right, but this isn’t going to drive any sales.

Deposit Rates

Balance Level

Checking (APR)

Savings (APR)

3-Month CD*





$2,500 to $10,000








Source: Juniper Bank, 1/5/01    *$1,000 minimum deposit required on CDs

On the deposit side, it’s clear they are not using high rates to attract accounts. But if the bank hopes to manage more than the payment portion of a household’s finances, they will need to add investment options such as: money market account, indexed equity fund, bond fund, and so on.’s investment products would have been a nice fit. Too bad Juniper didn’t buy those accounts before closed down its banking business and refunded all deposits and investments to customers in early December. 


Sales Presentation: B-

Credit Card Value Proposition: B

Deposit Value Proposition: C-

Product Information

Product details are delivered through mouseovers. It’s a little unwieldy with this much information. If you accidentally move the mouse, the information goes away. Another problem, in the Checking section, the graphic subtitle, “Banking without a Net,” pops up after a second and blocks some of the text (see upper right). The bank would be better off creating unique pages for each product.

Main Credit Card Page

The credit card page stresses rate, with a 2.9% start rate and 13.99%
go-to rate. But, the company does little to stress its Net-only focus.



Juniper offers an ewallet, but it’s not well integrated. Clicking on ewallet opens a screen (lower right) explaining the feature. Clicking “Download” opens another screen (upper left), which is primarily branded Few users will have the patience to sift through this mess to download and use the wallet.

Bill Payment: Juniper aspires to be a bill payment player, perhaps using it to differentiate its card offering. The bill payment program is well designed, but its slow and confusing for beginners. For example, users must figure out the difference between “your e-billers” (electronic bill presentment) and “payees” (anyone receiving a payment). They need to program a setup wizard that walks users through the process much like they have for the new account application process. Juniper also needs to integrate bill payment with email. Currently, they don’t send email confirmations when new payees are added, payments are sent, or payments are cleared. They also don’t offer the option of sending an email to the recipient of the bill payment.


For new users: C-

Once you get the hang of it: B+


Bill Pay Center: Home Page

Initially, the Bill Payment Center is intimidating for novice and experienced users alike. You are thrown into this blank page and must figure out what to do next by trial and error. In order to get started, users must choose between “Your e-Billers” and “Add Payee.” The e-Biller option is the likely first choice, but it dumps you into a slow loading, but short list of Checkfree’s electronic bill presentment vendors (see below).


Bill Pay Center: Bill Presentment

A popup screen lists “merchants offering the convenience of e-bills.” While we recognized this as a list of billers supporting bill presentment via Checkfree, the average consumer would likely figure this was the total universe of billers he/she could pay.


Bill Pay Center: Making a Payment


Juniper’s payment interface is excellent. We like how it displays the full information on the payee and the account the payment is coming from, making users feel more comfortable they are not making errors.


Bill Pay Center: Viewing a Previous Bill


Another excellent usability feature: when viewing a previously paid bill, all payee and payment information is summarized on a single page. It makes the payment look more “tangible” and should cut down on customer service queries.

Tools and Calculators

Here’s an area where Jupiter shines. Although, the calculators are similar to other banks (outsourced from FinanCenter), the tools section sets it apart. Users have an ATM locator to find a place to make a deposit or withdraw cash; a UPS drop-box locator to find a more convenient place to make a deposit; and a Mail Boxes Etc. locator to find a human-run deposit location. The bank has also created a Forms Center where users can find forms for common tasks, such as direct deposit setup or making a deposit at Mail Boxes Etc. This is much better than forcing the user to search all over your Web for the right form. It should also cut down on customer service forms requests.




Popup Calculator

Calculators powered by FinanCenter.


ATM, UPS, MBE Locators

The bank has differentiated itself by building an unprecedented network of deposit-taking outlets: 30,000 ATMs, 60,000 UPS boxes, and 4,000 Mail Boxes Etc. stores. But with an anemic deposit product line, we’re not sure why so much emphasis has been placed on brick-based deposit outlets.


Message Center

One of the more interesting things Juniper is trying to do is change how users go about doing their banking. Instead of dumping massive amounts of information on the user, Juniper has created a Message Center to tell users which things need attention, for example, a message to remind you to pay a bill or renew a CD. In our three weeks as a customer, the Message Center has been blank, save for a few generic marketing messages. So it’s hard to say if and when Juniper will deliver on this part of the vision. It’s surprising that they haven’t had one of its 250 employees pencil a two-sentence welcome message. It makes you wonder how customer-focused the bank truly is.


Concept/idea: A

Implementation (at least for new users): F


Message Center

Empty message center. Even though I’ve been a customer for 3 weeks, I’ve yet to receive a message.



Customized Alerts

Juniper has placed Customized Alerts on its main navigation bar. This is a good move, helping differentiate its service. Unfortunately, the service is not active yet. Our customer service “champion” told us it would be available early next year. Why Juniper would choose to focus attention on an innovative feature, without admitting it wasn’t available, is beyond us.



Concept: A

Execution: incomplete



Message Center

Account Summary and Online Statements

Here is another confusing aspect of Juniper’s interface; users can easily view transaction information by clicking on an account from the account list (lower left-hand corner). But new users will probably click on View Statements instead. View Statements is a clunky PDF file of the user’s actual paper statement, a slow and inconvenient process. The bank needs to redesign its navigation to help users avoid the PDF option. Speed is they key to satisfied users.


C- (but could easily be an A with better navigation)


Transaction Detail

To view transaction details, users select an account from the list in the lower left. Account detail is then displayed in the large window in the right

 Account alerts have yet to go live, so we couldn’t test them in action. But from the promotional material in the demo and sprinkled about its Web, they look to be one of the most advanced implementations on the Net. But the bank is negligent in not disclosing that the alerts are not yet available. 

two-thirds of the screen. Users can select how many months of transaction detail they want displayed.




Customer Service Options

Juniper leaves no stone unturned in customer service. Users are invited to interact with the bank via phone, email, private (online) chat, call me (Juniper calls the number you leave at the time you request), and mail (just to fill up the page).



Customer Service

Customer service options are thorough with phone, email, chat, and call-me options. Email responses are promised within 24 hours – not particularly impressive, but at least they dare to make a service guarantee. In our tests, only 5 of 7 questions received an answer, a 71% answer rate. Of the five that were answered, the average response time was about 3.5 hours. The quickest response was 1.1 hours, the longest was just under 7 hours (see Table on next page). Account-related emails are driven through a form with drop-down boxes for message topic and account reference. All answers are sent via Internet email and are not being posted on the Juniper site. While email service is adequate, it could be improved with the following changes:

  • Send an autoresponse on Web-form submissions: The bank sends an autoresponse on non-account-related questions sent via Internet email, but Juniper should also send an autoresponse to account-related questions sent via the Web form, the cost is trivial.
  • Provide an archive of all customer questions and answers: Once you press submit on the account-related query form, you have no record or confirmation of your question (installing an autoresponse would help greatly). The bank does include a copy of your question when they respond, but until that time you have no way of referring back to what you asked. The bank should archive questions sent to customer service and the answers. The Message Center, which currently has no integration with customer service, would seem the logical place to store questions.
  • Encourage service reps to probe further: Juniper should encourage service reps to solve customer problems rather than just diagnosing them. It’s like going to the doctor and finding out the reason for the chest pains is a constricted artery, but then being shooed out the door without discussing what to do about it.
  • Improve email response time: Committing to a 24-hour turnaround time is a good start, but it’s far too long for a cutting-edge bank. Juniper should be thinking in terms of minutes (at least during normal business hours) rather than hours. It doesn’t have to be guaranteed, but the bank could say for example, “We’ll usually get back to you within 90 minutes for questions submitted between the hours of 7 AM to 7 PM and within 12 hours for questions coming in after hours. If we can’t find an answer within those time frames, we’ll let you know exactly when you should expect an answer.”


Options: A

Email Tests: B


Results of Test Customer Service Inquiries

Source: Online Banking Report tests, 12/00


Customer Service: Call Me Option

Call Me option includes choice for a call back in 5 minutes, 20 minutes, or 1 hour.


Sample Customer Service Email Answer

response to message #4, a followup to an earlier question

Subject:   Re: Application Status (KMM14432C0KM)

   Date:    Wed, 27 Dec 2000 21:37:54 -0500

   From:   Juniper Customer Service

     To:     Jim Bruene

Dear Mr. Bruene,

Thank you for your recent e-mail.

Our Credit Department has left for the evening, they would be able to advise on the verification process for using a business address.  The Credit Departments hours are 8:00am to 6:00pm Eastern Monday - Friday; their number is 1-866-408-4064. 

Your patience has been greatly appreciated.


Susan Neal

Relationship Manager

Juniper Bank.  Now you have a champion.

Juniper Bank, a Division of Columbus Bank & Trust Company, Member FDIC

Original Message Follows:


I might have used my business address when I signed up. If so can I send some other type of address verification (other than mortgage or utility statement)? I prefer to have the banking statement going there.

Jim Bruene


Juniper Bank.  Now you have a champion.

Visit us at  and apply today!


Source: Juniper Bank, 12/27/00

This response to my question (see bottom of message) is typical. The response was prompt and helped me move forward, but why didn’t they simply forward my question to the appropriate department for an answer? Even though I had approached Juniper via email, I was instructed to make a phone call to learn about Juniper’s rules for address verification. You would have to be an unusually motivated prospective customer to do this much work to set up an account.


Despite numerous flaws, Juniper earns our final Best of the Web 2000 because we like Juniper’s strategy – a lot. It comes closest to our vision of a truly virtual bank by focusing on the credit card as the core account vehicle instead of checking . The way they slipped a $25,000 credit card into our hands when we didn’t even ask for one, was very slick. Listening to Dick Vague, we get the sense that Juniper will be the ultimate consumer company, along the lines of AT&T Universal Card with its wildly popular free-for-life card in the late 80’s.

However, when you peek under the covers, Juniper is making many of the same mistakes we’ve seen over the years at other online banks. Because the bank is new, a glitch or two can be overlooked, but given our account hassles, we really wonder if the bank was ready to open. From our anecdotal experience, we’d say they are still in a late-stage beta mode. Their customers would be much more tolerant if Juniper admitted this up front. 

The bank is probably trying to do too many things too quickly. For example, it could have held off on Wireless Access and eWallets that can be a nightmare to setup and appeal to only a small subset of techies. Also, the emphasis on Mail Boxes Etc./UPS deposit taking seems misguided. If the bank is concentrating on credit cards and bill payment, why does it make such a big fuss about taking deposits at Mail Boxes Etc.? Why not hold off on these expensive deposit-acceptance options until they’ve got the kinks worked out of their system?

The bank probably felt pressure to drop a credit card mailing into the pre-holiday, credit card buying frenzy, so they went live a bit prematurely. Given the size of their employee base and funding, we expect they’ll be able to fix many of the glitches rather quickly. But if they are counting on their first wave of customers to spread the Juniper gospel, they may be disappointed. Even more troubling, there seems to be an underlying lack of attention to what customers really want from their online bank: a speedy Web site, good email support, and simple navigation.


Free Credit Reports and a Whole Lot More from

By Jim Bruene on November 7, 2000 5:40 PM | Comments

“Our goal is to catch the consumer at a teachable moment.”
-- Co-founder, KK Srinivasan, 11/17/00


WorthKnowing delivers a product in great demand in the United States: a user-friendly free credit report. A proprietary credit score is displayed on a gauge which also shows typical offers associated with each score. To the right are links to personalized recommendations and preapproved credit offers.


The Company
: Atlanta-based was founded in July 1999 and opened the beta version of its service to the public in Sept. 2000, with the “official” launch on October 24.

The company was founded by KK (Krishnakumar) Srinivasan, WorthKnowing’s current President, and James Eckstein, CEO of Visionary Systems Inc., which provides much of the technology and processing for the startup.  Both men previously worked at Equifax, one of the three large U.S. credit bureaus.

WorthKnowing was founded with investments from Atlanta-area angels. While the company pursues its first round of venture capital for a full-scale expansion, it’s been experimenting with advertising on,, and others Web sites. So far they’ve had approximately 10,000 site visitors.


Management Team

Name (email) Position Background

Krishnakumar Srinivasan

Co-founder & President

Ph.D. in Artificial Intelligence, worked at Equifax and First USA Bank

Deborah Bailey (dbailey@) Acting CFO Currently on the executive management team at Visionary Systems, a strategic partner of WorthKnowing
Lisa Volmar, (lvolmar@) VP Operations From the computer communications and telecommunications industry with experience at Motorola and Verilink
Kathryn Petralia, (kpetralia@) VP
Biz Dev.
Five years of experience in Internet companies with USWeb
Tim Bates, (tbates@) VP
Lender Dev.
Also from Equifax with prior experience at CCN (now Experian Strategic Solutions) and First North American National Bank

Source: company, 11/15/00

The Product and Business Model: WorthKnowing bills itself as “an independent credit marketplace dedicated to helping consumers make informed credit decisions.” It’s a cross between GetSmart, LendingTree, and QSpace.

WorthKnowing has a simple and valuable product, free online TransUnion credit reports. Consumers get quick access to their credit report and receive the information nicely packaged in an educational format that includes a WorthKnownig proprietary credit score on a 1-to-100 scale. Furthermore, the site is devoid of banners and the usual hucksterism found on sites dealing with credit and especially problem credit.

The company hopes to derive revenue not from the credit report itself, but from matching lenders with borrowers. After reviewing their credit report, users have the option of viewing credit offers they have qualified for on the basis of their credit profile. A key differentiating WorthKnowing feature is that the credit offers are made without a hard inquiry on the consumer’s credit bureau. The preapproval process results only in marketing inquires just like traditional direct mail. WorthKnowing has applied for a patent on the process.

Third-Party Providers: WorthKnowing has wisely secured endorsements from the leading third-party privacy and security watchdogs, including:

credit reports


credit card processing


site security



Online BBB, VeriSign, Truste


How it Works: Overall, it’s a pretty simple process, although WorthKnowing could improve usability in few areas and iron out some minor navigational glitches. During our initial test, we were one of the 20% of applicants not authenticated the first time through. So it took us almost 10 minutes to get our credit report. This does not count the time it took to look up our monthly car loan and mortgage payments, which are one of the important checks in the process. Had we been authenticated at the outset, it would have taken less than 8 minutes in total (see next page). The process goes like this:


Application screen #1 (bottom): WorthKnowing requires annual income, presumably used to help lenders make appropriate preapproved credit offers. At this point, the user may begin to wonder whether this is a legitimate free service. The company should explain why it needs this information.


The Signup Process

1.        User arrives at

2.        User completes a 3-page signup form. Authentication is accomplished using an algorithm that compares user-supplied data against that contained in the credit bureau database. Data points include: name, social security number, address, previous address, employer, and the amount of any mortgage and/or car loan payments.

3.        User receives a TransUnion credit report neatly summarizing the consumer’s situation including total revolving lines, usage, negative information, and so on.

4.        WorthKnowing translates the TU credit score into a 100-point scale and shows that type of credit offers a consumer is likely to receive at various scores.

5.        WorthKnowing provides personalized advice as to what the user could do to improve the score.

6.        Finally, the user has the option of viewing preapproved and non-preapproved offers of credit. Each lender providing preapproved offers will post a promotional credit inquiry to the user’s bureau report.

Putting the Clock on It

Elapsed Time



At site, selected Get Free Credit Report button; glitch during page loading but eventually it comes up


First application screen displayed


First page completed


Error: Invalid street address, corrected and resubmitted


Second screen displayed


Second screen input complete


Third screen displayed with user agreement


Read agreement and pressed enter (Problem: At least with Netscape 4.5, you can’t print or save the frame containing the user agreement and there is no option to have it emailed to you.)


Error: Unable to verify my information


Edit loan amounts


Back to screen 3


Edit loan amounts again


Error: Unable to verify


Edit information again


Error: Unable to verify; gave up and looked up actual loan amounts and emailed company; came back the next day, entered actual loan payment amounts


Viewed finished credit report

Source: Online Banking Report test, 11/13 to11/14/00 using Compaq 1685 laptop with 56k modem and 300mhz chip. Began application on Monday at 5:00 p.m., Nov 13, finished 4 p.m. Nov 14.

End-User Pricing: The service is free except when requesting a new credit report more than once in any 90-day period. In those cases, each additional report costs $5. Reports are saved on WorthKnowing servers for 90 days. Users can go back and look at it as much as they like for no charge, although the report could be up to 90 days old.

Pricing to Financial Institutions: There are two ways of participating in the WorthKnowing service. You can become part of the lending network and make preapproved offers, or you can become a distributor, sending declined loan applicants to WorthKnowing.

Lending network participants pay WorthKnowing $30 to $70 per booked loan. The amount depends on volume and customer type. There is no fixed fee, so lenders only pay for actual booked loans. According to the company, the cost compares favorably to the $75 to $150 typically paid to acquire a new account.

For distributors, it’s not a cost but a revenue opportunity. A portion of WorthKnowing’s $30 to $70 finder’s fee will be shared with the company that sent the applicant to WorthKnowing. Naturally, these fees are negotiable, especially for potentially large distributors such as a major credit card issuer or bank. However, a consortium of smaller banks or credit unions might be able to negotiate similar terms.

Lender Network: Currently, seven lenders have signed on to offer credit to WorthKnowing users. So far, only CompuCredit is making preapproved offers, but others are interested. Three issuers focus on sub-prime credit, consumers with poor credit histories, or those with little credit experience. Eventually the company hopes to offer two to seven preapproved offers to each user. They expect this will require 25 to 30 active lenders in the network.

WorthKnowing Lender Network


Target Segment


American Express prime New York
Chase prime New York



San Francisco

Security First Network Bank (owned by Royal Bank)


Atlanta, GA

AspireCard (owned by CompuCredit and issued by Columbus Bank and Trust) sub-prime Atlanta, GA
Action Card from BANKFIRST sub-prime Sioux Falls, SD
Net 1st National Bank sub-prime Boca Raton, FL

Source: OBR test and interview with the company, 11/15/00


Distribution Strategy: The company hopes to derive a significant amount of traffic by serving the declined loan flow from credit card issuers nationwide. WorthKnowing estimates there are 70 to 100 million declined loan applications each year. For each decline, the financial institution’s credit reporting service is required to give the loan applicant a free copy of their credit report if requested.

WorthKnowing hopes that companies will direct declined applicants directly to its Web site where consumers could view an instant copy of their credit report AND consider preapproved credit offers from other lenders.

This benefits the original financial institution by:

1.       Reducing customer service cost in servicing declined applicants

2.       Helping declined applicants find credit increasing overall customer satisfaction (if only slightly)

3.       Giving them a share of WorthKnowing’s revenue if the declined applicant accepts a credit offer from WorthKnowing’s lender network

One company has signed on to be a distributor and another deal is in the works.

What’s Ahead: The company is pushing forward on a number of fronts including:
  • signing up more lenders for its lending network
  • finding credit card issuers willing to send their declined applicants to WK
  • building a brand and driving consumers to its Web
  • improving the Web interface, revised version due out in 3 to 4 months
  • securing additional capital

Later, the company plans to branch into other types of credit products including, car loans, mortgages, and home equity.



Even before talking with the company, we liked what we saw. But our conversation with founder Krishnakumar Srinivasan convinced us they deserved a Best of the Web designation. By offering free credit reports, personalized advice, and access to a broad range of credit providers, the company is genuinely helping consumers.

Even more important, they appear to have developed a new, potentially profitable business model helping large card issuers reduce costs and improve service to declined applicants. If the company can land a couple major card issuers, they will be well on their way to building a critical mass of users.

While at least three other companies deliver online credit reports, no one else offers them for free1 or with integrated preapproved credit. That makes WorthKnowing uniquely situated to serve the needs of millions of declined loan applicants each month.

If you are a large credit card or loan originator, you should consider WorthKnowing as a source of new accounts. You pay only for approved applicants, so there is little risk.

If you are not a large lender, you should still consider working with WorthKnowing on one or more of these fronts:

  • Resource for declined applicants: Refer declines to WorthKnowing to view their credit report, see where they stand, and find other lenders serving their specific profile. The linkage could be co-branded or a simple hyperlink.
  • Co-branded card-issuing site: If you are not issuing your own credit card, consider putting WorthKnowing on your site in a co-branded fashion to deliver credit reports and credit card offers to your customer base.
  • Credit card research center: Install WorthKnowing in your research center so consumers can view their credit report and shop for other credit offers if they so desire. offers a free credit report, but you have to signup for an annual $69 credit monitoring service to claim the free report.


Home page: If you’re an unknown dot-com advertising free credit reports and demanding a social security number, you will be met with considerable skepticism. WorthKnowing does its best to build credibility with good design, layout, and the “Big 4” third-party endorsements running across the bottom: BBC Online, VeriSign, ICSA, and Truste.1


The site is well-designed, although there were a few glitches on Netscape Navigator 4.6 (we didn’t test any other browsers), such as this perplexing problem where the top frame would not go away even when it was repeated below. We had to restart back on the home page to get rid of it.

1WorkthKnowing should remove the social security number request from the first page. Even though a SS# is necessary to access a credit report, such prominent placement is sure to chase away many potential users.  The company does promise to purge social security numbers from its files after the expiration of the 90-day credit report storage period.


Application screen #1: The application is laid-out in a low-budget fashion, with little embedded help or explanation. This is an area that needs improvement to reduce the percent of users who bail out of the application when they become frustrated or uneasy with the questions.


Application screen #2: The company has been developing an authentication scheme that requires information not readily available in the user’s wallet. Users are required to list the dollar amount of their car loan and mortgage.

NextCard application button takes you to the above screen.  The “Credit Recommendations” page contains good advice geared to your credit profile. In our case, seven recommendations were included: double-check the data, balance your revolving accounts, close accounts not using, do not apply too often or too quickly, avoid personal finance loans, always pay bills on time, pay attention to your credit. 

Example Credit Offer: NextCard is not currently preapproving offers to WorthKnowing users. Clicking on the “Apply Now” button takes you to the provider’s Web site where all the info must be rekeyed.



Credit card offers: Based on the user’s profile and credit score, lenders make preapproved or non-preapproved credit offers. In our test, none of the offers were preapproved; all required an application. The choices were Chase Platinum, NextCard, and American Express

Categories: Best of the Web

Best Practices in Online Signup - Bags a Million Accounts

By Jim Bruene on April 7, 2000 5:47 PM | Comments’s home page is all business. The upper left- hand box contains an eye-catching offer. For the first three months, it promised a $20 new account bonus. Recently, it hyped a 5% rate on checking.


The Company: (Palo Alto, CA), a startup building a legacy-free banking operation on the Web, has nearly perfected the online signup process1. It’s no wonder. They’ve had far more practice than most banks, having bagged more than one million accounts during its four months in existence (includes results from PayPal). However, snail mail fulfillment of the paper and plastic account components is still a bit of a letdown. How it Works

Following is an evaluation of each component of the signup process. The letter grades assigned (A to F) are completely subjective and based on our personal experience.

Speed/Ease of Use

Grade: A+

It couldn’t be much faster. Visitors are promised a 2-minute application. In our test, we found that number to be accurate. It took us 1 minute and 53 seconds to create an account and have the disclosures returned to us on the Web site. It took another 2 minutes to read the single page of instructions, choose to have the full disclosures emailed to us, hit submit, and wait for the server to approve our account, presumably with a credit check.

Disclosure Presentation

Grade: A handles the pesky government-mandated account disclosures AFTER first capturing enough information to register users. That way, if the user bails out before setting up a checking account, the company still has a name and email address.

After completing the 2-minute application, users are presented with a single page of text that outlines product disclosures. Users can click on links to view the full disclosures or take the easy way out: checking a box to have them emailed to look at later.

1Online Banking Report editor Jim Bruene had a minor consulting role in’s initial product planning in mid-1999.


Use of Online Medium
Grade: A has a 100% online signup process. Users simply type their name at the bottom of the online form, indicating their agreement to the rules and regulations. The only snail mail requirements are for optional ACH setup and certificates of deposit.

Expectations vs. Reality
Grade: A

The company delivers on what it promises —
a quick and easy signup.

Technical Glitches
Grade: B

Everything went perfect until we tried to fund the account. We selected the e-check option, but the server kept timing out. Next, we attempted to charge the initial deposit to our credit card. We entered several card numbers, but each time we received an “unable to authorize” message. Although, the message was returned so fast, we doubt that the system really tried to authorize the charge.

So we gave up, waited 15 minutes and tried again. This time, both the echeck and credit card funding features worked flawlessly. It was a Monday morning, so’s servers could have been overloaded. If that were the case, the company should simply tell us as much, instead of returning messages implying user error.

First Impression
Grade: A

Other than the hiccup in funding our account (above), the user’s first impression of is superb. Account features are clearly labeled, information is neatly summarized on a single page, and it’s easy to use. Another big plus, users can immediately log into their account after submitting the signup form to verify that all is well.

Initial Account Funding Process
Grade: A- isn’t the first to offer credit card and ACH account funding, but they’ve done it better than most. Five funding options are available (credit card, echeck (ACH), wire, mail, direct deposit) with echeck and credit card highlighted. There isn’t a minimum opening deposit requirement (zero is OK). With Wall Street rewarding traffic and registered user base metrics, there is no reason to turn away even zero balance accounts. is the first we’ve seen to allow subsequent deposits to be charged to a credit card, up to $1,000 every six months. This allows’s payment function to act as a gateway to the credit card system. They need to work on increasing this limit by allowing users to take cash advances on their card.

New Account Welcome
Grade: A+’s welcome process was superb during the first few hours, but should be beefed up with additional communications during the critical first days and weeks. A more sustained dialogue would make new users more comfortable with the company, increasing the likelihood of account consolidation and referrals has a recommended communication plan).’s New Account Email Barrage




Why Sent

When Received

1 welcome to auto-response sent to all immediate
2 full account disclosures auto-response per my selection on the signup form immediate
3 notice that they had received a garbled fax custom from customer service in response to my first attempt to fax information to setup an ACH from my existing bank 3 hours
4 ACH setup confirmation template in response to my fax initiating an ACH relationship 90 minutes
5 funds transfer confirmation auto-response confirming my funds transfer from checking to money market fund immediate
6 S&P 500 confirmation auto-response confirming my funds transfer from checking to money market fund immediate
7 CD purchase confirmation auto-response confirming funds transfer from checking to CD immediate
8 payment confirmation auto-response confirming my P2P payment had been made immediate

Source: company, 3/00


Initial Service Support
Grade: A

Although we had just a single interaction with customer service/operations, it was a pleasant one. For security reasons, new accounts wishing to initiate ACH transactions must mail or fax a voided check to Wishing to speed things up, we chose the fax option. Our initial fax jammed during transmission. To our surprise, we received an email within a few hours alerting us to the garbled transmission. We re-faxed check at 4:15 p.m. PST and had our account set up and ready to go by 5:45 p.m. when we received email #4 (lower right). is building a 500-person customer service center in Omaha, NE, to maintain these high service levels.

Grade: C-

During the signup process, did an excellent job describing what happened next after submitting an online application. It even described what each package would look like. The welcome letter and PIN mail arrived promptly five business days after applying. The paper checks arrived on day seven. Finally, 11 business days after applying we received the crucial piece of plastic, the “titanium” Visa ATM/debit card. Those turnaround times would be acceptable if the company kept us informed via email. However, we’ve heard nothing from the company since the first day (other than transaction autoresponses).

Areas for Improvement has done a remarkable job for a company that one year ago was just four guys with laptops and cell phones working out of a subletted Palo Alto conference room. But there is always room for improvement. For new customers, the main weakness is the lack of proactive communications after the first 24 hours (see Fulfillment above). We also found a few, mostly minor, annoyances during our first two weeks as a customer:

  •  P2P payments were not available from 10 p.m. to 2 a.m. (PST)
  •  usernames are set to equal the user’s email address and are stored in a cookie and automatically inserted during logon; this is a good feature, but it should be optional
  •  login history (at least the previous one) should be displayed for users to monitor fraudulent access
  •  users should also have the option of receiving an email each time their account is accessed
  •  the main screen after login says that account balances are “effective Mar. 17,” referring to the funds availability policy effective data, but it’s disconcerting because it looks like an outdated balance effective date
  •  more security assurances and options are needed, especially since the company is so new
  •  the welcome email (as of March 27) still carried the outdated footnote that the “$20 new account offer will be discontinued on Feb. 18, 2000”
  •  the account overview page needs a total of all balances
  •  the 30-character limit on P2P email notes should be expanded
  •  an expedited ATM card issuance option should be made available for a fee

Email #4

Confirmation of ACH Setup

Subject: Voided Check Received

Date: Mon, 27 Mar 2000 17:47:21 -0800



Dear James Bruene,

This email is to confirm that has received and processed your voided check. You can now use’s secure method of transferring funds online by electronic check. Of course, there is NO FEE for using this service.

To deposit or withdraw funds, please log in to and click on the deposit or withdrawal links in the upper left section of the Overview page. There is no limit on the amount of funds you may deposit or withdraw, however, our account verification department may call you to confirm if you are moving a large amount. Please note that funds may take four to six business days to deposit in and one or more business days to withdraw, depending upon your other financial institution.

Thanks for using

Account Verification Department


Email #1

Welcome Autoresponse

Subject: Welcome to

Date: Mon, 27 Mar 2000 10:32:59 -0800



Dear James:

Thank you for choosing! We are pleased to have you as a new customer and look forward to providing you with high-quality, low-cost financial products and services for many years to come.

More information about your account will arrive through the mail over the next few weeks. Keep an eye out for:

1. An welcome letter accompanied by your signature card. You must return your signature card in the envelope provided so we can fully activate your account.

2. A generic looking envelope containing your Personal Identification Number or PIN for your ATM/VISA CHECK Card [note: this PIN is different from your online password]. PLEASE KEEP THIS IN A SAFE PLACE -


3. Your actual ATM/VISA CHECK Card.

4. Your free starter kit of 50 checks.

Again, thank you for your business. Please feel free to contact us at with your comments.

Warm regards,

Elon Musk

Chairman and Founder

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Our $20 sign-up promotion will be discontinued as of

Friday, February 18th, at 12:00am PST.

Email #2

Account Disclosures (truncated)

Subject: full account agreement and disclosure

Date: Mon, 27 Mar 2000 10:32:59 -0800



X.COM WEBSITE AGREEMENT as of March 22, 2000

This Website Agreement ("Website Agreement") with Corporation ("") applies to your use of the Website.

In this Website Agreement, "you" or "your" means each person that uses the Website to obtain a Financial Service; "Financial Service" means a deposit account, overdraft credit account, funds transfer service, mutual fund product, or any

<continues for 13,000 words>

Email #3

Garbled Fax Notification

Subject: ACH TRANSFERS - Illegible fax received

Date: Mon, 27 Mar 2000 15:50:58 -0800

From: accnt_verification


Dear Mr. Bruene,

Thank you for faxing over documentation to sign up for our ACH transfers. However, the fax we received was illegible. Please send the fax one more time so we can get this account activated for you. I apologize for any inconvenience this may have caused you. Thank you and have a nice day.


Jennifer Durham

Account Verifications

FAX (650)833-5470


Email #5

Money Market Fund Purchase/Transfer

Subject: U.S.A. Money Market Fund Purchase Confirmation

Date: Mon, 27 Mar 2000 17:38:04 -0800



Dear James,

Thank you for investing in the U.S.A. Money Market Fund. Your purchase was executed on 03/27/2000 at a price of $1 per share. To view the details of this transaction, please sign on at .

If you have any questions, please email customer service at .

Kind regards, Funds

Email #6

Fund Purchase/Transfer Confirmation

Subject: Premier S&P 500 Fund Purchase Confirmation

Date: Mon, 27 Mar 2000 17:38:04 -0800



Dear James,

Thank you for investing in the Premier S&P 500 Fund. Your purchase was executed on 03/27/2000 at a price of $11.95 per share. To view the details of this transaction, please sign on at .

If you have any questions, please email customer service at .

Kind regards, Funds


Email #7

CD Purchase Confirmation

Subject: CD Purchase Request Completed

Date: Tue, 28 Mar 2000 11:04:50 -0800



Congratulations! Your request to purchase a certificate of deposit (CD) with has been processed successfully.

Thank you for choosing, the best way to manage money on the Internet.

Comments or questions? Contact us at

Email #8

P2P Payment Confirmation

Subject: You just sent $1.00 to through

Date: Mon, 27 Mar 2000 11:20:56 -0800



You just sent $1.00 to through

If this is incorrect, you may click the link below to cancel your payment. NOTE: This link will reverse your payment if and only if the recipient has not yet obtained the payment.

Click here to view your account details

If you have questions about this email, please contact an representative at or call 1-888-447-8999. Thanks for using!

Sincerely, Customer Service

Users agree to the terms and conditions by typing their name in the box on the online signature card.
Note: disclosures are presented in a single page <>.’s welcome screen does an excellent job communicating the next steps including the sequence of snail mail packages and the opportunity to fund your account immediately; it also allows users to do something right away (view account summary). Welcome Screen

Welcome to!

Thank you for becoming a customer!

You now have an online FDIC-insured checking account provided by First Western National Bank (FWNB), the ability to send money instantly to anyone’s email address and access to low-cost mutual funds with no minimum investment. You also may have qualified for overdraft protection which can be used to cover overdrafts when using your titanium Visa Check Card or writing checks.

What next? Watch the mail!

You will receive information about your account through the mail over the next few weeks, including:

Signature Card: please sign it and return it as soon as you can to prevent your account from becoming restricted. titanium Visa Check Card: use this card to get cash at ATMs displaying the Visa logo or Plus symbol, and use it to make purchases wherever Visa is accepted. This card draws money directly from your checking account and is not a credit card.

PIN Mailer: this generic-looking envelope from contains the Personal

Identification Number (PIN) for your Visa Check Card. Your PIN is different from your website password.

Checkwriting Starter Kit: a free starter kit of 50 checks and 10 deposit slips is on its way! You can write unlimited checks with no fees or penalties.

Now you can save, invest and send money instantly through!

FDIC-insured, high-interest bank account with NO minimums make it easy to save.

Low-cost index mutual funds with NO minimums make it easy to invest.

Free money transfers make it a snap to send money instantly to virtually anyone with an email address.

Fast, free and safe auction payments make sending and receiving payments for online auctions and classified ads easier than ever.

You can fund your account now.

Skip funding my account, and just go to my account summary. uses a simplified login procedure with the username set to the email address and saved in a cookie. While convenient, we don’t think this offers adequate security for monetary transactions.

Account summary. Uncluttered and business-like with integration to mutual funds.

Account funding with five options.

Credit card funding option: Up to $1,000 can be moved from a credit card every six months. The transaction is a purchase, not a cash advance.

Glitch: I repeatedly received this error message when trying to charge my initial deposit to a credit card.

To initiate an ACH relationship, users must mail or fax in a voided check and drivers license (fax option only).

Categories: Best of the Web, Raising the Bar

By Jim Bruene on February 7, 2000 12:14 PM | Comments

The start-up bank asks,
“Is this the single best Web banking account in the nation?” We say, “It depends.”

It depends on:

(a) Whether you keep at least $1,500 on deposit to earn the 6%.

(b) What the rate resets to after the first 6 months.

(c) How the customer is served.


The Company: The St. Louis, MO-based bank officially launched on Jan. 11, 2000, after a two-month soft-launch period that brought in $8 million in deposits
. The bank was developed by start-up Customer One Financial Network Wilmington Savings Fund Society (WSFS) (Wilmington, DE; $1.7 billion) became a minority investor in Aug. 1999 with a $5.5 million investment for a 25% stake. WSFS
is scheduled to invest another $5.5 million in a
few months. The arrangement is referred to as “joint initiative” on the company’s Web site. Everbank also received $7 million in funding from private investors.

The idea for the bank began about four years ago, but actual development commenced in early 1998. EVP Marketing David Galland has experience in direct marketing of investments and expects to see the bulk of everbank’s customer base driven in through conventional direct mail techniques. Currently, a 6.01% promotional deposit rate features prominently in the bank’s sales pitch.

The bank employs 25 (mid-Jan), with eight in customer service. Initial marketing commences in mid-Feb.

The Management Team:

Three of five founding execs came from Signet Bank, an online banking pioneer prior to being purchased by First Union.




CEO Frank Trotter Lead Mark Twain’s pioneering foray into digital cash and was SVP Capital Markets at Mercantile Bank after purchasing Mark Twain
EVP, Dir. Product Groups Robert Foregger Marketing & New Product Dev. Mgr. at Signet Bank, was Sr. Marketing Mgr. at Blanchard Funds
EVP, Dir. Home Services Kyle
Co-founder of American Finance & Investment, online mortgage lending pioneer, acquired by First Mortgage Network now
EVP Marketing David Galland Founded his own marketing consultancy after being VP at Signet Bank and Dir of Marketing at Blanchard Funds where he managed a direct mail program that attracted 100,000 customers and $5 bil. in customer assets
EVP, Dir Operations Vincent Amato Was VP of Mgmt Info Systems at Signet, worked at Blanchard and Chemical


The Product: Banking products run on S1’s Internet banking platform which supports categorizing expenses online and downloading into Quicken or Money. The company has also added the following features:

  •  100% Web Safe Guarantee - similar to NextCard, guaranteeing account against fraud
  •  100% satisfaction guarantee
  •  7 x 24 customer care center
  •  free/no-fee services: unlimited bill pay, nationwide ATMs, check writing, Visa Check Card, inbound wire transfers, overdraft protection advances
  •  ATM surcharge rebates, up to $4 per month
  •  airline miles credit card with a low, prime +1.9% “go to” rate (not a teaser)
  •  yield pledge - top 5% of all interest checking accounts and money market accounts as listed in Bank Rate Monitor
  •  financial organization reports created from categorized transactions
  •  investment center (in house) with $19.95 trades and access to 2,000 mutual funds
  •  opening promo: 6.01% checking (no maximum balance) for first 10,000 accounts opened before Mar 31, 2000 (1% higher than “normal” APY of 5.01%); minimum average balance of $1,500 required to earn interest and avoid the $4.95/mo maintenance fee (min. opening deposit = $100)
  •  15-minute mortgage application with 10-second approval and low-rate guarantee
  •  insurance center co-branded with InsWeb
  •  home buying research area with Realtor referrals, home listings, calculators, change-of-address service, and so on

Coming Soon

  •  Web site for real estate agents to initiate mortgage applications; have signed up 500 (see screenshot upper-right)
  •  home equity lending in Q2
  •  Evertrade advisors in Q1; expected to be the first Net bank offering investment advice for the typical infrequent trader
  •  full-service investment center with private-branded index funds

Source: interview with company execs, 1/15/00 was designed by parent, CustomerOne Financial, as a Web-based center for real estate agents. It features financing through everbank.

Marketing Strategy: The bank’s marketing messages in its initial press releases and direct mail piece include: Marketing Messages



Web site, Go direct. Get more. Guaranteed.
Press release headlines · ...the only bank you’ll ever love, ending fees and frustration

· ...offers customers a 100% satisfaction guarantee and exceptional live 24/7 service

· Shaping a new kind of consumer-centric bank for the Internet age

· Launch mission for create a bank that consumers will love

· New Internet bank entry takes on stodgy banking Goliaths by offering industry’s first 100% satisfaction guarantee.

Direct mail headline Earn one of the nation’s highest risk-free yields on your money...while dramatically reducing the hassle of managing personal finances and slashing the time you spend paying bills!
Direct mail first sentence Managing your finances just got easier...and far more rewarding.

Source: company press kit, 1/00

*quoted verbatim from company material

During testing in late 1999, the company conducted a 100,000-piece direct-mail drop. The test results yielded a mix of 80% of new accounts generated from marketing and 20% from referrals. Thirty percent of customers bought its credit card.

Business Model: The company expects to turn a profit in much the same way as a traditional bank, with a small interest margin on deposits, more on loans, and fees along the way. is counting on a cost structure lower than brick-and-mortar banks that can be reflected in lower prices without sacrificing profits.


This meter runs across the application,
growing as the application is completed.

Application Process: The application was straightforward enough, taking 7.5 minutes to complete, including downloading and printing the 33-page disclosure. It worked without a hitch and included a clever application status meter (see above) running across the top of each page.

The bank did a good job cross selling overdraft protection and a Visa Rewards card during the application. Our only complaint concerned the disclosure statement. The bank used the kitchen sink approach, throwing everything into one long document that was 155k in size and 33 printed pages. That would have been OK if it was downloaded just once. But we ended up downloading the same monster file four times, because it wasn’t clear that the single disclosure covered all products.

The account funding process was strictly paper based. You had to print and mail the application along with a check for the opening deposit, $100 minimum, $1,500 to avoid the $4.95/mo fee. The bank should come up with an ACH and/or credit card option for initial account funding.

Another serious flaw is the welcome process. After spending nearly 10 minutes filling out the application, we did receive a nice thank-you screen message. But, when we tried to log in to our just-created account to see if everything was OK, we got an error message. We can understand why the bank doesn’t give us full access to all banking functions prior to receiving the paperwork, but why not give us something to do? At DLJdirect you can make a $5,000 stock purchase immediately after completing the application. At PayPal, you can send someone up to $200 right away.

At least let us log into our account and verify application status and user profile. Even better, provide something interactive such as stock prices, weather forecasts, and so on. Don’t leave us hanging.

After Hitting Submit: Finally, our usual rant on post-application customer support. Everbank did better than Wingspan Bank, it at least confirmed out application with an immediate autoresponse email (see right). The email included an excellent benefit for returning the application in a timely fashion. If it was returned by Mar. 31, 2000 (eight weeks after we applied) we would lock in the 6.01% teaser rate for at least six months.

But then we heard nothing from the company for ten days when a snail-mail package arrived with our account information. Then a few days later we received a letter with our initial password and a concise (8-panel, 2-color), well-done brochure describing how to use online banking and bill pay.

Here’s the deal. We spend a half-hour checking the bank out, putting our privacy at risk by handing over all our personal information, printing out a 33-page disclosure, finding our checkbook, an envelope and a stamp; then sending a couple grand in the mail. We expect more feedback, for example:

1. Within minutes of receiving a deposit, send a confirmation thank-you by email.

2. Within 48 hours, send new account information via snail mail with an email telling us to be on the lookout for the package.

3. A few days later, send an email asking whether the package was received and offering to answer questions.

4. Repeat #3 periodically until we log in.


Robert Foregger is SVP Product Development

(802) 253-4681, ext. 12


everbank Application Autoresponse

Subject: Thank you for applying at!

Date: Tue, 1 Feb 2000 20:20:51 -0500

From: everbank


Dear Future everbanker,

Thank you for completing the online application for the EverMoney e/Checking Account. Simply sign and return it along with your opening deposit and you are on your way to better banking... everbanking that is!

Be sure to open your account prior to March 31, 2000 because that way you’ll qualify for the special 6.01% APY (annual percentage yield) for a minimum of 6 months following your account opening!

After the initial 6 month period, your APY will vary, but you have everbank’s “best rates guaranteed” yield pledge that your EverMoney e/Checking Account yield will always remain in the top 5% of bank money market accounts in the nation.* That way you never have to wonder if you are earning one of the nation’s best risk-free yields.

So, please, to be sure of making the March 31, 2000 date, send your application and opening deposit today. You are going to love!

It’s guaranteed!


Vincent F. Amato

EVP, Director of Operations

11 Oval Drive, Suite 107

Islandia, NY 11722-1479

Tel: 1-888-882-3837

Fax: 1-888-882-6977

All Contents Herein Are Privileged & Confidential

Visit the future of banking at


P.S. If you have ANY questions, or need ANY help, please don’t hesitate to give us a call at 1-888-882-EVER (3837), then press “4” at the prompt to speak to a live Customer Care Specialist. Or, e-mail us at . We look forward to being of help!

* Based on the Bank Rate Monitor Index of America’s 100 Leading Banks. Fees may reduce earnings. To earn interest and avoid a $4.95 monthly fee simply maintain an average daily balance of $1,500 in your EverMoney e/Checking Account. If you do, then full interest is paid and there are absolutely no monthly maintenance fees! is a division of Wilmington Savings Fund Society, FSB. Member FDIC, Equal Housing Lender 141A

Source: company, 2/1/00


We’re not the only one who likes The bank debuted at number 10 on Gomez’s bank scorecard based on a very strong showing in the Overall Cost and Relationship Services categories (refer to for category definitions). It leverages this endorsement with a $50 bonus offer for new customers signing up through the Gomez site.’s Gomez Scores




Overall Cost



Relationship Services



Ease Of Use



Customer Confidence



On-Site Resources






Source:, 2/00

The new bank is one of the new breed of Net-based startups: part bank, part broker, part investment advisor, part lender, part mortgage broker, and part credit card issuer. From a product standpoint, it’s much like WingspanBank. But even Wingspan, with its very deep Bank One pockets, offers fewer products than what everbank is launching with.

The danger for the bank is overextending itself. With only 25 employees, running an in-house bank, brokerage, and mortgage lender will require a balancing act like no other Net-bank startup has attempted to date. We question the merits of bringing the brokerage operation in-house. We think the bank would have been better off out-sourcing that function and reassigning resources to core banking functions. But, if the bank can pull it off, it could be a key to building franchise value.

Although we like the overall look and feel of everbank, we think they could tone done the hyperbole a notch. For example:

(1) Direct mail: The DM piece looks like one of the many investment come-ons that arrive in the mail almost daily. They must work, or companies wouldn’t send them. But we think the bank would be better off with a more upscale look-and-feel to its marketing.

(2) Press releases: We like the overall positioning, separating themselves from traditional banks. But some of the material sounds silly at best, or even mean-spirited. For instance in the glossary they define pin-stripers as “AKA ‘fat cat bankers’ or ‘men with soulless eyes.’ They can usually be found in marble palaces. Asleep. Or calculating new fees to separate you from your money.”

Rate comparison, screen 1: Shows annual
return of an everbank CD compared to selected competitors and to the overall national average.
In this case, a $20,000 5-year CD.

Rate comparison, screen 2: Shows the increased return over time.

One of the best features of everbank’s sales presentation is its rate comparisons which allow users to compare rates and see how much more they earn with everbank over time (see screenshots above). But, they could be even better by allowing users to compare actual up-to-the-minute rates around the Net. There is risk to this strategy, but Net users know that this kind of hyperlinking is relatively easy to install. It raises the question, “If everbank’s rates are so hot, why don’t they make it easy for me to confirm that myself.”

Summary: Aside from a few minor flaws in the application process, we find little to fault. The product line is superb, prices are rational, the marketing strategy is solid, the Web site is excellent, and the bank has assembled a seasoned and enthusiastic management team. So we’re giving our first “OBR Best of the Web 2000” designation for the year. It’s not perfect, but considering they’ve only been open a couple months, it’s an impressive start.

everbank’s mortgage capabilities, using M&I’s MortgageBot, set it apart from most online banks.




everbank has put extra care into its graphical elements. For example, these eye-catching and concise virtual sticky notes are an effective way to “post” the bank’s important guarantees.

Categories: Best of the Web, Everbank

Person-to-Person Email Payments Launched

By Jim Bruene on December 1, 1999 12:43 PM | Comments

Powered by PayPal from Silicon Valley’s Confinity

PayPal is the biggest online “wow” we’ve experienced since NextCard’s real-time credit card balance transfer in April 1998 (OBR 5/98).

PayPal’s just-launched Web service allows users to “email” money to anyone by simply typing their email address. And it’s free.

Note: shortly before press time, the format of this screen changed, see screenshot.



The Company: Yet another Silicon Valley start-up is eyeing the banking franchise. Launched just one year ago, Confinity (Palo Alto, CA) is a promising new payments company that bears watching closely, very closely. The company is handing out $10 referral fees and sign-up bonuses like candy. The fine print says that only the first 50,000 users earn $10 bonuses. (Users can earn up to $1,000 in referral fees by signing up a maximum of 100 new users). But we doubt the company’s investors will want them to stop at 50,000. The opportunity is huge, and it looks as though Confinity has at least a six-month head start on the competition.

The company won’t say how many employees they currently have, but there are at least 14 job openings listed on their Web site (Nov. 29).
Red Herring reported that the company had 14 employees in July when they received $5 million in funding from investors Nokia Ventures; Deutsche Bank Tech Ventures; Bill Melton, founder of Verifone and Cybercash; and Stanford professor Martin Hellman.

The Product: The company currently has three person-to-person (P2P) products in various stages:

1. Email payment service launched Nov. 15 that can be used to send money instantly to anyone with an email address.

2. Palm-to-Palm payment application currently in beta with full release scheduled for December. The estimated four to five million Palm users will be able to send money to other Palm users either through email as described above, or through Palm-to-Palm infrared communication using software that can be freely downloaded from the PayPal site. The software can also be sent to new users in 15 seconds using the infrared connection.

3. Cell-phone-based payments, a modified version of email payments, scheduled for release in
Q1 2000.

Much of the press coverage has focused on the Palm application, which is useful if you live in Silicon Valley or work in a high-tech Palm-toting company. But for the rest of the world, it’s the email payment program that has the huge potential.


Business Model: Originally, Confinity was looking at earning revenues from float, abandoned funds, and a 4.5% withdrawal fee (after first $500 each six months), among other things. But prior to its Nov. 15 launch, the company dropped the withdrawal fee and instituted a policy that will significantly limit the amount of abandoned funds. The PayPal system will automatically return money to the sender if not claimed within 180 days. Senders can also reverse transactions before the 180-day mark by requesting a reversal from customer service.

The company is planning a number of programs to boost usage beyond the one or two P2P payments the average user would make each month (our estimate). For example, a program targeting merchants is planned that would put the company into the ebilling market.

PayPal’s “Quick 1-Page Registration” really is.

How it Works:

Registration Process:

1. User goes to

2. Selects sign-up button on top right.

3. Completes mini-application including name, address, phone number, and email address

4. Chooses username, password, and secret question (for password resets).

5. Enters credit card info for authorization.

6. Checks email for confirmation message (timing will vary, we had to wait about 30 seconds).

7. Clicks on the link in the email, or manually inputs the 20-digit confirmation number.

8. After step seven, users are given a temporary charge limit of $100 against the pre-registered credit card.

9. An additional confirmation is sent to the user’s postal address. On subsequent logins, users are prompted for their snail-mailed confirmation number. After entering the 20-digit number, users’ credit card charge limit is raised to $5,000. The charge limit, which is currently the same for all users, is the maximum amount that can be charged to credit cards in a six-month period, with no single charge higher than $2,000.

The charge limit guards against fraud, but mostly it prevents users from quickly running through large volumes of credit card transactions for the float and/or miles. Nevertheless, it’s an appealing way of bagging an extra 10,000 miles every year.

We expect Confinity will eventually process card transactions as cash advances instead of purchases. That will effectively transfer the cost of the card transaction from Confinity to the user, which will give users a monetary incentive to fund their account via ACH instead of credit card deductions. The company won’t have to worry about the tedious and mildly confusing charge limit tracking either.

Elapsed time: 5 minutes, 18 seconds*

*Time in takes to completely the online portion of the registration process: Includes typing the URL, completing the application, scanning the agreement, and confirming the email message (with a 30-second wait for the email to arrive). It does not include confirming the snail mail address a week later, which took less than a minute.

Sending Money (called “beaming” by Confinity):

1. User logs in to PayPal site.

2. Selects Beam Money from menu.

3. Enters email address of recipient (who does not have to be a registered Confinity user until they want to withdraw the money) and dollar amount of the payment; presses enter.

4. Confirms transaction; presses enter. The transaction immediately appears in the Transaction Log for reference.


Elapsed time: 59 seconds*

*Time in takes to completely perform the transaction: Includes typing the URL, logging in, entering the information, including an optional 10-word memo. Assumes you know the recipient’s email address and have available funds sitting in your PayPal account. Otherwise the payment amount is charged to your credit card adding 15 to 30+ to the entire process.

Shortly before we went to press, Confinity added a number of improvements to the main “beaming” screen including an important (albeit short)
32-character memo field.

Receiving Money:

1. A few seconds after money is sent (previous page), the recipient receives an email saying “Joe Jones has beamed you money” (see email right).

2. User clicks on imbedded link to retrieve money.

3. New users must register using the process outlined on; existing users simply log in.

4. Selects Withdraw Funds.

5. Users can leave the money in their PayPal account, have it electronically transferred via ACH to any bank**, or have a paper check sent. Either way, there are no fees assessed to either party in the transaction.

Elapsed time = 32 seconds*

*Time in takes to completely perform the transaction: Includes typing URL, logging in, selecting a pre-registered bank account to deposit the funds, entering the amount to transfer, and pressing enter. New users must first go through the five-minute registration process (previous page).

**Each bank account must be registered by entering bank name, routing number, and account number; then confirming that info. emailed to the address-of-record. This process takes 1 to 2 minutes.

Transaction logs make it easy to see what you’ve just done, or look back to activity many months ago. Users can search on any date range using the optional fields at the top of the screen.
The memo line is also captured in the log.


Email to Recipient of Funds

Subject: Jim Bruene Beamed You Money with PayPal!

Date: 5 Nov 1999 20:28:48 -0000



Jim Bruene ( has just Beamed you Money! You now have $11.05 waiting for you at PayPal.

Visit to sign up for your PayPal account today! And remember to sign up with this email address in order to claim your money.

PayPal is a free service that lets you Beam Money to anyone using your credit card. Today, you can Beam Money online to anyone with an email address. In the near future, you will be able to Beam Money with your Palm, Handspring, and Windows CE organizers, Internet-enabled cell phones and two-way pagers.

Welcome to PayPal!

If you wish to thank your friend, reply to mailto:

Source: Confinity, 11/99

Adding Funds:

1. User selects Add Funds from the main menu.

2. Selects an account to debit from a drop-down list of previously entered bank accounts. Note: users also have the option to, (a) mail a paper check to fund their account, or (b) not funding it in advance, in which case any necessary funds are charged to the user’s credit card entered during the registration process.

3. Enters the amount to be added to the PayPal account; presses enter.

4. Confirms transaction; presses submit.

Elapsed time = 36 seconds*

*Time in takes to completely perform the transaction (the same process as withdrawing funds): includes typing URL, logging in, selecting Withdraw Funds, selecting an account to debit, typing an amount, and confirming the transaction.


Transferring Funds:

A practically undocumented, but potentially interesting product feature, is the Web-based interbank funds transfer engine built into the system. In a matter of seconds, users can register multiple bank accounts to move money in and out of their PayPal account. Currently, you cannot move money directly from one bank account to another. You must first transfer funds into your PayPal account, wait for them to arrive, then move the money out. It’s a bit convoluted and can take
3 to 5 days, but it still beats mailing a paper check.

1. After logging in to PayPal, user selects Add Funds and follows the procedure outlined above (selecting bank account, then entering the amount to be debited from that account).

2. User waits up to 48 hours for money to be transferred into their PayPal account.

3. User selects Withdraw Funds and follows the procedure outlined on the previous page (selecting bank account, then entering the amount to be transferred). Again, up to 48 hours later the amount will be credited to the receiving bank account.

Elapsed time: 3 to 5 days*

*Total time it takes to move money from bank account A into bank account B. The two transactions only take about 30 seconds each to perform, however users must wait up to 48 hours for each of the two separate ACH transactions to post.

Marketing Strategy: The company’s Nov. 16 press release <> contains a hodge-podge of potential marketing strategies, from everyday person-to-person payment needs such as settling a dinner bill, to specialized merchant applications such as ordering and paying for a coffee drink prior to arriving at the coffee shop.

But the company’s main emphasis right now is viral marketing, hoping that the process of friends beaming money to each other will spread like wildfire across the Net. And to fuel the fire, the company is throwing money to its early adopters in the form of $10 sign-up and referral bonuses. Users can earn up to $1,000 by bringing 100 new users into the system ($10 each). To qualify for the $10 you must beam a penny or more and the recipient must register with Confinity, confirm their credit card number by email and confirm their street address sent by snail mail. The recipient also gets $10 and can earn additional referral bonuses in the same manner.

The company plans to offer the service on a co-branded basis through partners such as banks and portals. No word on partners at this early stage.


We strongly encourage you to set up an account at PayPal to see how it works. You can register, poke around, and beam yourself a test transaction, in less than 15 minutes, and you only have to give up one credit card number. Here’s why it’s so good:

  •  Instant gratification: Within six minutes of first learning about PayPal, you can be beaming money across the Net.
  •  Easy to use: You can send money to anyone simply by knowing their email addresses (you don’t even need to know their name!).
  •  Simple and intuitive user interface: Once registered, it takes only 30 seconds to send money, faster even than scribbling out a
    paper check.
  •  Instantaneous posting of transactions.
  •  Two-step user authentication: Snail mail confirmation is required for full access, but a
    simple email authentication gets users started.
  •  Fast Web site.
  •  Free (except lost float).


It’s not perfect, the weaknesses:

  •  Lost float: In its current business model, Confinity holds the money. Consumers won’t like that. But we think most will understand the trade-off: lost float for free transfers.
  •  Fraud concerns: The current email address and password scheme is not rigorous enough for financial transactions. Additional password protection should be placed in front of transfer functions, at least for high-dollar transactions. Email notifications to senders would also be a welcome security addition.
  •  3600 tracking: Users need a way to track whether the funds transfer was received. The company says it will add that feature soon. They recently added referral tracking.
  •  Credibility: We don’t think the company does enough to assure users that the system is secure and fail-safe. It does an adequate job explaining itself, but they could use more detail and especially more assurances from independent third parties (only investors Nokia and Deutsche Bank are listed as endorsements)
  •  Learning curve: This is the $64 million dollar question for Confinity. Will people go through the hassle of signing up and learning the system
    to get the $25 you owe them for mom’s flowers? We think many will, if the other issues, especially credibility, are addressed (see below).

Summary: For a system 10 days out of beta, PayPal is spectacular. The company’s ability to plug holes and refine its business in Internet time bodes well for the future. We have been using the system for about three weeks and have already witnessed dozens of enhancements to the user interface and Web site.

Trust is the biggest obstacle to adoption. Will users turn over their bank account numbers to a new, unregulated, unlicensed company with “” in its name? We think for most consumers the answer is “no.” The company must partner with major financial services companies (e.g. a top-10 bank or card issuer; or Visa, MasterCard, or American Express) to gain significant adoption. The company should have little trouble finding big name backers. Chase’s $15 million profit in VerticalOne (OBR 9/99) should mollify any critics in the boardroom.


Matt Bogumill, Business Development

165 University Avenue

Palo Alto, California 94301

Phone: (650) 566-3645; Fax: (650) 566-3646

The Confinity Team

Peter Thiel CEO Background in law and finance; headed Thiel Capital Management, LLC, an investment fund with a focus on high-tech startups; also worked as an options trader for Credit Suisse and securities lawyer for Sullivan & Cromwell; BA and JD from Stanford.
Max Levchin CTO Background in cryptography and handheld programming; previously founded NetMeridian Software, where he developed some early palm-top security applications and SponsorNet, an early Web-based advertising service; BS University of Illinois.
David Jaques CFO Background in finance and banking; previously Treasurer of Silicon Valley Bank; also worked for Barclays Bank PLC in New York and London in currency and interest rate risk advisory services; graduate of South-West London College.
Luke Nosek, VP Mktg. Background in technology and business; co-founded SponsorNet with Levchin; BS University of Illinois.
David Sachs, VP Strategy Worked on the start-up as a consultant at McKinsey, jumped to the client in early November.
John Malloy Partner at Nokia Ventures, LP., previously VP of Business Development for Nokia Americas, a founder of GO Communications, a PCS startup, and Marketing Director at MCI.
Peter Buhl Partner at Nokia Ventures, LP, previously CFO of Ipsilon Networks and CFO of Software Alliance Corporation.
Reid Hoffman Founder of SocialNet, an internet community service, previously Director of Product Management and Development for Fujitsu and User Experience Architect at Apple Computer.
Technology Advisors
Martin Hellman Electrical engineering professor at Stanford and renowned cryptographer with a leading role in the development of public-key cryptography.
Dan Boneh Computer science professor at Stanford with expertise in hand-held encryption.
Media Strategy Advisor
Peter Robinson A research fellow at the Hoover Institution at Stanford University, hosts the PBS program Uncommon Knowledge.
Industry Advisors
Scott Banister VP of Ideas for idealab!
Scott Loftesness Former CEO of Digicash and Visa exec; currently an entrepreneur-in-residence at US Venture Partners.
Glenn Osaka Former Hewlett-Packard VP; oversaw the integration of VeriFone into HP.

Source: Confinity, 11/99




Nokia Ventures

$100 million venture capital fund formed in 1998

Deutsche Bank Tech Ventures

Largest bank in Europe

Bill Melton

CEO and founder of CyberCash and the founder of VeriFone with 30 years experience in the banking and telecommunications

Martin Hellman

Electrical engineering professor at Stanford University

Sources: Confinity, 11/99


The Buzz


Date Published



Nov. 17 Financial Times Web Privacy
Nov. 16 ZDNet Credit Cards Accepted Here
Nov. 15 PC World Beam Me Up Some Money, Scotty
Nov. 15 Wall Street Journal PayPal Electronic Plan May Be On the Money in Years to Come
Sept. 8 CNBC Beam Me up Some Cash
Sept. 2 Wall Street Journal Bartering for Equity Can Offer Sweet Rewards in Silicon Valley
Aug. 23 San Francisco Chronicle Sometimes Opportunity Does Knock
Aug. 2 allNetDevices The REAL Net Device Killer Apps
July 29 International Herald Tribune Money Beamer
July 27 Wired News PayPal Puts Dough in Your Palm
July 26 ZDNet A Palm In The Hand Is Like Money In The Bank
July 23 Red Herring Investors beam funding to Confinity
July 23 UPSIDE Today Executive Briefing
July 23 Nokia Invests In Net Device Payment Technology
July 22 Wall Street Journal Beam it up, Scotty
July 21 San Jose Mercury News Please, just beam $3 million to hand-held – it’s for start-up

Source: Confinity, Dow Jones, 11/99

Categories: Best of the Web, PayPal

VerticalOne Wants Your Customers’ Account Data

By Jim Bruene on August 8, 1999 9:28 AM | Comments

(Surprise! They may already have your data.)

After logging onto VerticalOne, you are presented with a high level snapshot of your account with the various information providers.

In this case, we are shown outstanding balances for our Citibank MasterCard and NextCard Visa.


VerticalOne is the first company to launch a financial statement aggregation business. In other words, they pull customer account data right out of your Web site and display it in one integrated view on their Web site. The service also aggregates bills, frequent traveler statements, and email accounts.

If you are a frequent OBR reader, you will not surprised by’s business plan. We first discussed the topic in general in early 1998 (OBR 3/98). Last August we profiled the first two companies concentrating on the frequent flier segment, MaxMiles from Mileage Maximizer and Biz Miles (OBR 8/98,). More recently, in our 1999 Predictions column, number seven was “Banking Statement Consolidators Appear” (OBR 1/99).

The Company: VerticalOne is a privately held firm founded last year in Atlanta. It currently has 71 employees including a founder and exec team from various high tech and telecom companies. The service has been in testing for several months by 7,000 users recruited from The company wisely filed patents on the process, whether they will be approved and enforceable, is impossible to predict.

EVP Marc Gorlin briefed us on the service in late August. As he put it, “(VerticalOne) will do for personal data what Yahoo! did for generic information.” Cooperating banks, stock brokerages, and credit card companies are crucial to the service, both as providers of the raw data, “information providers,” and as distribution partners, “destination sites.” The company believes that ultimately it will help information providers by drawing incremental traffic to their sites. To that end, VerticalOne mines only top-level account data to display on its integrated statement. Users wanting statement detail and transactions use a link directly into the information provider’s Web site.

The company has received considerable attention in the technology press with articles in Wired, Upside, Red Herring, and others. They also were featured in American Banker on Aug. 31 Evidently, the company’s strategy has struck a chord with business and technology writers. For example, read these rave reviews: (1) In Online Bill-Paying, It’s BankOne vs. VerticalOne, BusinessWeek Online, Aug. 26 (2) VerticalOne: The App That Could Kill Quicken, The Industry Standard, Aug. 20,


Company Timeline




Founded Oct. 98  
Patents filed Oct. 98  
Domain name registered Oct. 98 Also registered:,,,,,,
Seed financing late 98 $3.9 million
First round financing May 25, 99 $12 million from Flatiron Partners, Chase Capital Partners, Kinetic Ventures, TTC Ventures and others
Service launched Aug. 2, 99  

Source: company, 8/31/99

How it Works:

1. Users sign up through one of the company’s distribution partners (the company does not intend to market the service directly).

2. Users agree to let VerticalOne act as their agent and pull account information directly out of financial institution servers.

3. Users determine which of the more than 100 VerticalOne-enabled info providers they have accounts with*.

4. Users input their info-provider usernames and passwords so VerticalOne can pull the data. If the user doesn’t have a username/password, or if it has expired, VerticalOne links the customer to the info providers enrollment screen to sign up.

5. On subsequent logins, high-level data from the info provider are automatically displayed in an aggregated statement (see screenshot).

6. To view account detail or to make transactions, users are linked to the info provider in one of two ways:

a) Quick Login: VerticalOne automatically passes the username/password combo (from step 4) to the info provider, logging the user in.

b) Link: This alternative simply delivers the user to the info provider’s login screen to manually enter username and password.

*Users can request that new info providers be added. Right now, the company is adding about 10 new ones per week.


Account set-up screen for info provider access:

If you already have a username/password, you simply enter it into this form. VerticalOne even provides help remembering usernames, such as this social security number (SSN) prompt to set up NextCard access

Automatic Login: When enabled, clicking on “Quick Login” opens a new browser window, in this case logged into NextCard, on top of the VerticalOne screen.

User Benefits: The system currently provides a several user benefits:

  •  summary account data from multiple financial institutions displayed on one screen
  •  one login to access multiple password-protected databases
  •  fewer passwords to remember
  •  helps users identify info providers that are with Web-based account access
  •  convenient jumping off point to all online accounts, like “bookmarks on steroids”

User Disadvantages: There are serious disadvantages as well, some easily fixed, others more problematic:


· privacy/security: do you really want to have ALL your accounts and passwords in one place; if your VerticalOne account is ever compromised, you are REALLY going to have problems


  •  one more password to remember
  •  only supports one account per bank (scheduled to be fixed in Q4 99)
  •  slow: if you just want to know your checking account balance, its probably faster to go directly to the bank’s Web site
  •  the initial signup process is tedious trying to remember usernames and passwords to your other accounts

Future User Benefits: Weighing the pros and cons of the current beta version, the cons probably win out. But down the road, the VerticalOne product can become far more valuable to end users. Consider its power when, and if, these functions are added (these are our ideas, VerticalOne is taking the position that its destination partners will layer these on top of the aggregated statements).

  • funds transfer engine: the company, or a distribution site, could hang an ACH (electronic transfer) button on the site and allow users to transfer funds to and from any listed account
  • balance transfer engine: along the same lines, users could use the site to transfer balances amongst credit cards and loans to get the best rate
  • deal finder: the company, or its advertisers, could prod users to make transfers (e.g., “Jim, please note, you could save $37.12 per month by transferring your Citibank balance to your NextCard account, press transfer to do it now.)
  • Quicken-like budgeting/categorizing functions: everything Quicken does on the hard drive could be mimicked by VerticalOne

Bank Opportunities: You can work with the company in three ways:

1. As a private-branded distribution partner with no banner ads. In VerticalOne parlance, you would become a “destination site,” paying per-user fees for the aggregated content. This is expected to be the typical choice of ecommerce sites such as banks or telecom companies (e.g., Southwest Bell).

2. Private or co-branded distribution with banner ads, splitting the advertising revenue with VerticalOne. This is the model that portal and media companies will use, e.g., PlanetDirect, Inside New Orleans, and (see table below).

3. As a silent partner or “information provider,” allowing VerticalOne to mine your account data on behalf of users. You can elect to have the company pull the data one-by-one, logging in as each user; or you could develop a direct data feed to VerticalOne to speed up the process and potentially provide more up-to-date information. The first option requires no expense or contract on your part. In fact, it will be done with or without your permission. However, VerticalOne will allow banks to “opt out” and deny data access, but we advise against doing so for reasons we’ll discuss later.

Destination Partners



BellSouth Cox Interactive Media iVillage
Planet Direct Orchestrate

Source: VerticalOne, 8/28/99

Contact: Marc Gorlin is EVP, (678) 443-7902.

Company Executives

Position Name/
Previous Experience
CEO Gregg Freishtat/gsf SVP Premiere Technologies (NASDAQ: PTEK); CEO Telet
Neal McEwen nmcewen CEO of Intelligent Systems Corp. (NASDAQ: INS); CFO Peachtree
EVP Marc Gorlin mgorlin Co-founder of Pretty Good Privacy (acquired by Network Associates)
CTO Palaniswamy Rajan/raj CEO Emerald Systems
SVP Prod. Dev. Vikas Rijsinghani vikas Pres. Neoglyphics Media Corp.; Sun Microsystems
VP Marketing Sandra Dunn sdunn MCI WorldCom card division
VP Biz Dev. Todd Lesher tlesher BellSouth Advanced Data Services Unit and; McKinsey
VP Controller Vinod Keni vkeni CFO HomeCom Communications (NASDAQ: HCOM)
VP Operations Timothy O'Brien/tobrien Dir of Tech Support at Equifax
VP Media Strategies Peter Robson probson SVP Strategic Planning at Harte-Hanks

* , e.g.




VerticalOne’s service is rough around the edges, “just out of beta,” as they say in the industry. It’s slow, not particularly intuitive, and sparsely explained. But, you don’t have to look far down the road to see that it could take off in a big way.

VerticalOne must find big name financial institution(s) to add credibility and comfort users. We believe the company will have little trouble finding willing partners. No banks are signed yet, but VerticalOne is in active discussions with several top 10 banks, one of which is already on its fourth round of due diligence meetings. In a follow-up discussion, Sep. 17, the company was confident enough to predict that a major bank and/or brokerage signing would be announced within the next few weeks.

Regardless of whether VerticalOne ultimately drives this new business model forward or not, the concept of statement aggregation is perfect for the Web and will happen. Here are the two biggest issues VerticalOne or any budding rival must overcome:

1. Chicken-and-Egg Dilemma: It’s the same predicament the bill presentment industry faces; consumers won’t use it until a critical mass of statements is available. Distribution partners won’t market it until there is a critical mass of users. But there is one HUGE difference from the Transpoint/Checkfree ebilling model. VerticalOne doesn’t need the cooperation, or even the permission, from info providers to aggregate their data on its site. Users themselves provide the authorization and keys to unlock info provider databases; namely, their usernames and passwords. VerticalOne’s business is more like scan-and-pay bill presentment, providing immediate utility with the promise of even better things down the road.

2. The Trust Factor: Frankly, even though we had researched the company and quizzed a senior exec at length, it made us very uncomfortable entering all our personal info into the VerticalOne server. They now know my common login names, financial account numbers, social security number (used at NextCard), plus name, address, etc. Even as an ecommerce early adopter, I would never have considered signing on without assurances from a trusted and regulated third party, as to the soundness of security and privacy functions.

We can’t emphasize enough the significance of this business model for existing players. Right now, we would label it the NUMBER ONE most significant event of 1999. Because the service can be ad supported and free to users, it is a perfect fit for general portals such as Yahoo! and Excite and specialty financial hubs such as However, we think that it works even better for a financial institution, since they have “financial trust.” It will be especially powerful for online brokers looking to make it easier for users to view all their balances and sweep money into the brokerage account to invest.

Should You Opt Out? VerticalOne’s business would be a non-starter if a significant number of major financial institutions and credit cards opted out, by either blocking access from VerticalOne servers or telling the company to take a hike. We applaud VerticalOne for allowing information providers to make their own choice without cease-and-desist letters and litigation.

However, we don’t think many companies will opt out. Your gut reaction may be to pick up the phone and tell the company to stay out of your servers. If any customers complain, you simply trot out “privacy/security” concerns and leave it at that. Our recommendation is to count to ten and think it through. What happens if you do opt out?

  • You make it more difficult for certain customers to access their accounts.
  • You pass up an opportunity to have your name appear on the list of info provider partners; instead, VerticalOne will refer your customers to other participating companies.
  • You pass up Web traffic from customers linking in from the VerticalOne portal.
  • You could lose customers completely.

Action Steps: VerticalOne is currently most interested in talking to large companies. They hope to negotiate a blockbuster deal with a “marquee” financial institution to provide instant credibility and a validation of VerticalOne’s security and privacy procedures. It will almost certainly be an equity partnership. But even if you are not working at a large company, there are ways to participate in the statement aggregation business. See the chart on the following page.


Statement Aggregation Action Plan

Applies to:



Major U.S. banks Talk to the company now, and if you like what you see, try to beat your peers to the first big deal (hint: think equity); even if you are not first, strongly consider aggregating statements on your site either as a VerticalOne destination site or by building the capability in-house. ASAP
Smaller financial institutions Boost your negotiating strength by approaching VerticalOne jointly with your core processor, or with a group of like-minded financial institutions.* For example, a group of geographically dispersed credit unions could develop an attractive proposal, benefiting all. next few months
Credit card issuers Fly to Atlanta tomorrow and become a distribution partner before the end of the year; once you get customers coming to your Web site to view all their card statements, you can post a balance transfer function across the top of the page and encourage users to switch their balances “shown below” to your credit card. yesterday
Other financial companies or portals Consider working with VerticalOne to increase Web site traffic and facilitate financial transfers to your accounts. ASAP
All Register for the program and see how it works. ASAP
All Contact VerticalOne to get your name in the queue to become a supported info providers. ASAP
All Educate your service reps about the program and why you do or do not support it. Q4 99
All Realizing that VerticalOne and other similar services will deliver users into your site already logged in, review your Web site design to make sure users can easily jump to other areas; also make cross-sale offers after login. next six months

*As we did last month (OBR 6/99), OBR will be happy to serve as a matchmaker for our subscribers to find each other. Financial institutions interested in creating a joint proposal to take to VerticalOne, email us at and we’ll pass your name on to others and vice versa.


Final Thoughts: It may take ten years, or maybe only two or three, but eventually, this is how the financial Web will work. Ignore statement aggregators in general, and VerticalOne in particular, at your own risk.8

The first statement aggregator was Mileage Maximer from (see OBR 8/98).



VerticalOne Information Providers


Bank Checking Accounts (33)


Bank One

Bank of America

Bank Boston




Fifth Third

First American

First Republic

First Union



Harris Bank






National City



Northern Trust




Salomon Smith Barney

US Bank

Union Bank of California

Union Planters


Washington Mutual

Wells Fargo


Credit Unions (5)

Associated & Federal ECU

First Technology CU

Orange County TCU

McDonnell Douglas WFCU

Wescom Credit Union



Credit Cards (25)


AT&T Universal Card

America Online Visa

American Express

American Express Optima

Bank One Visa

Bloomberg Financial Visa

British Airways Visa

Dell Visa

Discover Card


Fifth Third

First Union

First USA Visa


MileagePlus Visa

National Discount Brokers Visa


New York Life Visa

NextCard Visa

Regions Bank

Southwest Airlines Visa

Wells Fargo MasterCard

Yahoo! Visa

iVillage Visa


Stock Brokers (18)

American Express Financial Direct


Brown & Company

Charles Schwab


Datek Investments

Discover Brokerage



Fidelity WebXpress


National Discount Brokers



Salomon Smith Barney


Waterhouse WebBroker



Billers (8)

AT&T Long Distance

AT&T Wireless

AirTouch Cellular

BellAtlantic Residential Services

BellSouth Residential Services

MCI OneSavings Long Distance

Sprint PCS

USWest Residential Services


Travel Rewards Programs (12)

Air France Frequence Plus

Alaska Airlines Mileage Plan

American Airlines AAdvantage

British Airways Executive Club

Continental One Pass


Horizon Air Mileage Plan

Northwest WorldPerks

Swissair Frequent Flyer Program

TWA Aviator's Program

USAirway Dividend Miles

United MileagePlus


Email Services (24)





CBS Sports




















Source: VerticalOne, 9/15/99


SecureTax Co-branded Tax Prep and Electronic Filing

By Jim Bruene on January 14, 1998 10:09 AM | Comments


SecureTax offers a private-branded screen when users click in from Citizens Bank. The normal $14.95 fee is discounted $5 for bank customers.

SecureTax is a division of Universal Tax Systems one of the major players in the professional tax prep and electronic filing business. Privately held Universal began in 1983 and has been used by more than 12,000 CPAs, accountants and other tax professionals. During the past two years, the company’s software has been used to prepare four million returns. The company claims to have transmitted more online returns than all the others combined.

SecureTax was launched a year ago to process 1996 returns. This year, through strategically placed banner ads (see example on facing page) on search engines and at strategic partners, including some 80 banks and credit unions, the company has seen volume ramp up quickly. During the second and third weeks of January, more than 10,000 returns were prepared online, with volume growing 35% per day. Strategic partners can share in revenues depending on how much traffic they drive.

The company is also running a weekly sweeps through the entire tax season. Each week, one user is selected from all that have registered that week to win $1,040. The company uses the sweeps to draw traffic off banner ads, but also to encourage repeat visitors by sending non-winners an e-mail encouraging them to come back and try again for the next weekly drawing.



SecureTax also appears on Texaco PAW Employees FCU .

Categories: Best of the Web, Tax Prep

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