Credit/Debit Cards Archives

Launching: "Final" Credit Card with Integrated Disposable Card Numbers Captures Imagination of Product Hunt Geeks

By Jim Bruene on October 9, 2014 6:38 PM | Comments

imageProduct Hunt is the newest website catering to tech enthusiasts. Each day 40 to 50 new products or new product features are featured on the site. Anyone who has registered is allowed to upvote any of the submissions and a continually updated leaderboard surfaces the hottest products of the day. Then at midnight, the whole thing resets, and 40 to 50 more products get their 24 hours of fame. I've been following it for a few months and have seen that while only two or three fintech entries appear each week, they tend to be popular (which could be a function of their scarcity). But rarely, if ever, do they climb to the top. And this week, not one, but two companies have dominated their day on Product Hunt.

On Tuesday, the Plastc Card (yes, spell check, no "i") garnered 545 votes, almost 200 more than runner-up Student Developer Pack. Plastc is similar to Coin, a computerized credit card that can hold multiple mag-stripe cards in a single piece of plastic, planning to ship to pre-order backers in the first half of 2015. Plastc holds more cards, has an e-Ink display, and at $169, costs more than three times the pre-order price of Coin.

On Wednesday, fintech ruled Product Hunt again, with new security-minded credit card Final gaining more than 900 upvotes, 600 more than the next-closest newcomer, Clearbit. I believe it's the record for a financial product, eclipsing Plastc's from the day before.

image What is Final?
Final is a standard mag-stripe (and chip) credit card with a companion mobile app and desktop dashboard. The card is upping the security ante by incorporating easy-to-use disposable (aka temporary) card numbers for ecommerce (card not present). It allows users to designate a unique number for every online merchant, that way it's easy to shut that merchant off, if you don't want them to be able to charge your card again. Users can also set transaction limits by merchants to make sure there are no overcharges.

Final also plans to offer advanced controls for brick and mortar purchases. Purchases could be allowed at only certain merchant categories, for example. And Final's card will be able to be tethered to your smartphone allowing chip-and-pin purchases only when the two are in close proximity to each other. 

The card-management app features PFM features not unlike what Moven and Simple offer today. But there is more emphasis on fraud controls and ridding yourself of "gray charges" ala BillGuard (see inset). In fact, the best way to think of Final is a credit card version of a Moven/BillGuard mashup. It is to credit cards what Simple was to checking accounts. A winning combination of good design, consumer advocacy and a bit of tech flair.

The startup is still looking for a credit card issuer-partner (attention Capital One, this could be your 360 credit card), so pricing is not available. However, CEO Matt Rothstein told me yesterday that they plan to make the card fee-free. In fact, they are looking at the business as much more than just a security play. They are focused on consumer advocacy and helping consumers reign in their spending (see first screenshot).

Final Thoughts 
Final is part of the current batch at TechStars Boulder and is pitching at its Demo Day today. The company has 2,200 people on its waitlist (Update: As of noon Pacific on 10 Oct 2014, the number has jumped to more than 21,000). Not a bad first-24-hours out of stealth. There is clearly consumer demand for more card controls, to avoid outright fraud, fight merchant overcharges and reign in overspending.

imageMost of the newcomers that have gone down this path have used prepaid debit cards and/or account aggregation. We haven't seen an ambitious startup credit card play since well before the 2008 meltdown. Final will benefit from substantially higher interchange (albeit shared with its partner), but will also have to deal with rejecting the credit applications from a significant portion of its waitlist. That will not be easy to explain to the early adopter crowd, who will likely take their case to social media (note 1).   

But overall, I'm a big fan of what they are trying to do, and expect to be following Final for a long time, unless they get swooped up by a large issuer right out of the gate.


Final desktop card management area: Transaction view (9 Oct 2014)
A.) Current balance and monthly goal dominate top of page. 
B.) Customer service, and a log of recent inquiries, appears in right sidebar


Final desktop card management area: Budget view



1. I'd advise having a prepaid card backup to mitigate the rejected applicant backlash.


Why (Most) Banks Need Not Worry About Apple Pay (Yet)

By Jim Bruene on September 15, 2014 5:04 PM | Comments

image I'll admit to being caught up in the hype. The 48 hours after Tim Cook revealed Apple's long-rumored foray into payments were some of the most exciting times in fintech since the 1995 to 1997 period when most of the online "firsts" happened (see note 1).

And we're seeing more thoughtful fintech posts in the past week than we used to see in an entire year. Thanks especially to Tom Noyes, Cherian Abraham, Brian Roemmele, Celent's Zilvinas Bareisis and finally today from Gonzo's Steve Williams for helping me see beyond the hype.

I can add little that hasn't already been said to the discussion about NFC, payment ecosystems, or the future of mobile payments. Clearly, it marks a turning point for mobile payments and improved U.S. security, and the play-out will be fun to watch.

The one area I haven't seen covered: What does all this mean for the 10,000 U.S. banks and credit unions not on the 11-name list at launch (note 2)?

So here's my take on the impact of Apple Pay on small- and medium-sized FIs over various time horizons: 

In the short term (2014): ZERO

In the medium term (2015-2016): ZERO

In the long run (2017+): Something, but impossible to quantify at this point
                                     (it could even be net positive)

Here's why bank/CU execs (outside the top-20 credit-card issuers) should not lose sleep over what Apple is doing:

1. Apple Pay (in the physical world) can be used only at contactless terminals
Supposedly, there are 220,000 contactless terminals in the United States. But if you've ever tried to use one, you know that 200,000 of them are either not working or are buried behind beef jerky on the counter. This will change rapidly as merchants upgrade during the next few years.

2. It's complicated to use (at first)
First, you need an iPhone 6, then you need to figure out how to use Apple's Passbook program, log in to iTunes or take a picture of your card, successfully authorize it, enable TouchID and so on. Millions of early adopters will figure all that out, but then they won't be able to find a working contactless terminal (see #1) and then they'll forget all about it.

3. The number of your customers that care enough to move deposit accounts for NFC payments is near zero (for now)
Let's do the math. Assume that a year from now there are 5 million Apple Pay active users (making at least one transaction per week) or 2.5% of U.S adults. If you have 20,000 customers, that means 500 will be active users of Apple Pay. Most will be happy to use their existing Capital One, Citi, and other rewards credit cards for the transactions. Very few will care that your debit card doesn't work on the system. Let's say it's around 25%. That means you have something like 125 customers who are disappointed with your mobile payment capabilities. If they like you otherwise, how many will move their checking account to get an Apple Pay-enabled version? While the number is probably zero, let's say it's 5% to 10%. That means you could lose 6 to 12 customers. Using the 80/20 rule, only one or two of them are profitable. Will it hurt to lose two profitable customers? Sure, but it's not going to be on your top-10 or top-25 list of worries.   

4. There are ways to mitigate any lost wallet share to Apple-Pay issuers
Even if my math in #3 is way off, or you are concerned that you will take a material hit to the bottom line, or you just want to be part of Apple Pay, easy routes will undoubtably be built to get your cards enabled into Apple Pay. Maybe not in 2014 (or even 2015), but certainly within the next couple years. And even if I'm wrong and you are locked out of the iPhone indefinitely, you can create an Apple Pay poaching program where your customers make their charges on a bigco bank card, then you automatically pay those charges off and essentially transfer them to your customer's checking account.

So my final advice. If you have an employer (or spouse) that's been reluctant to fund your iThings, now is the perfect time to do an upgrade (just don't show them this post).


Chase homepage shown to existing customers (15 Sep 2014)
Note: All three links on bottom of page go to the iPhone6 "Apple Pay" features page at which leads with Chase (link)



1. Or perhaps 1999 when Paypal/ made P2P payments happen or even 2005/2006 when Zopa/Prosper/LendingClub launched consumer credit exchanges.
2. See Apple Pay launch event clip here, complete with transcript.


Capital One Uses Email to Request Cardholder Income Update

By Jim Bruene on September 3, 2014 4:34 PM | Comments

I'm always on the lookout for digital process improvements, from the major to the minor. And this one definitely falls in the latter category. But in my 22 years of banking online, I don't recall ever being prompted to update my income so that my card issuer could reconsider my line size.

But that's exactly what I received this morning. At first blush, it almost sounded like a crafty fraud attempt. But Capital One wisely inserted my full name, the last four digits on the account, and promised to handle it in just 60 seconds (see first screenshot), so I'm pretty sure it's legit. They also reassured me that it won't require a credit bureau inquiry. 

Clicking through the email places the cardholder onto the normal online banking login screen. After logging in, you are sent directly to an account-update page (screenshot 2) to update income and employments status. After completing the two fields, you are thanked and can navigate to other areas or logout (screenshot 3). Total time expended = 87 seconds (Internet times were a little sluggish late afternoon on the West Coast).

Thoughts: This card dates back to 2010, so it's possible they are on a four-year cycle to update income information; however, I just sent my W2 to Capital One two days ago for a mortgage refinance. So I have to believe this email was triggered by that; if so, it demonstrates solid CRM integration, although it seems curious that the bank wouldn't just pull my income directly from the mortgage app.

All in all it was a painless experience, and I look forward to seeing whether the bank uses it to alter my credit line.


Capital One email asking for an income update (2 Sep 2014)



Online banking page to enter info


After entering info



UX Lessons for Card Issuers from the New Starbucks Mobile App

By Jim Bruene on April 8, 2014 7:39 AM | Comments

image When I moved to Seattle, Starbucks had just four locations. So I've had a ring-side seat in their climb to worldwide ubiquity. Though not a huge fan of their coffee, I greatly admire their business model, technology, and payments innovations.

I have been paying with the Starbucks mobile app for the past few months (note 1) as have 14% of its customers. It's great as long as there is a queue. That gives you plenty of time to go through the 9-step mobile payments process (10 steps with tipping):

1. Dig out your phone
2. Enter the smartphone passcode (if applicable) 
3. Locate the app
4. Open it
5. Press pay
6. View balance to ensure there is enough cash available
    (not applicable if auto reload is enabled)
7. Wait for cashier to press the correct key on terminal
8. Position your phone under the QR reader
9. Wait for cashier to give you the OK
10. (Optional) Dig in your wallet/purse/pocket for tip money

While this process seems ridiculously time-consuming compared to a card swipe (or cash), if you are waiting in a queue (typical), you can take care of all that before your turn to order (especially if you already have your phone out and are logged in).


The new Starbucks app

image The latest version of the Starbucks mobile app (iOS released 20 March 2014) cuts two steps from the 10-step process. More importantly, the crucial "hit pay" (step #5 above) has been replaced by a shake of the smartphone to signal it to display the Starbucks QR code needed at the point of sale. While not a huge timesaver, it pretty much eliminates navigation within the app before payment, quite an improvement in UX once you get the hang of it (note 2).

The new app also offers electronic tipping, a welcome improvement for the staff, since the move to no-signature card-transactions many years ago took away credit-card tips.  

The app integrates four components into the homescreen (see screenshot #1 right):

A. Top navigation with choice of:
-- Pay: Opens up QR code (in lieu of shaking) (see screen #2 below)
-- Stores: Starbucks store locator with map and list
-- Gift: Opens to virtual gift-card function with integration to iPhone contacts (see screen #3)

B. Loyalty program: A screen-dominating donut shows exactly where you stand on the path to the next loyalty level.

C. Messages: Links to a "feed" of available offers (screen #4) including:
-- discounts
-- free iTunes song and app downloads (with integration to iTunes for easy redemption) (screen #5)

D. Account history (see screen #6)
-- purchases and reloads 
-- tipping function allowed for two hours after purchase (screen #7)



There are some lessons here for card issuers:

  • Focus: Go to on your desktop browser, and you'll see about 150 navigation choices delivered via mega-menus across six main tabs. It's worse than most bank websites. However, the mobile app has just three primary navigation choices (Pay | Stores | Gift), plus rewards, messages and transactions on the main screen. Starbucks rightly chose to concentrate on exactly what customers need when they are on the go. 
  • Integrate rewards/loyalty: Despite the "shake to pay" process improvement, the Starbucks mobile payment experience is still cumbersome and by no means easier than paying by card. However, because the app is integrated with rewards, all of sudden it becomes compelling, both for early adopters (certainly) and the mass market (note 3). 
  • Annotate the transaction: Besides the new tipping function, the transaction history includes both a feed of the transactions (screen #6), plus the ability to click through to a full receipt (screen #7). While not super interesting at Starbucks, when so-called "level 3" data is available for more complex purchases, it becomes an important part of the value delivered. 
  • Mobile first: If you offer information or services consumed on the go, mobile services (app & website) are the key interaction point going forward. Starbucks CEO Howard Schultz understands this (note 4). Does your CEO?



2. QR code (scanned at POS)             3. Virtual gift cards

image     image

4. Offer stream                                5. iTunes integration to redeem

image       image


6. Transaction history                      7. Transaction detail with tipping

image        image


1. Previously, I was paying with Square Wallet since no reloading is required. But now I'm on the quest for Gold Status at Starbucks, so Square will have to take a backseat.    
2. Since users are not accustomed to shaking their phone to make it do something, it may take a while for everyone to figure out this shortcut. Luckily, the Pay button has been moved to a position of great prominence, for those that prefer to use the old navigation process.   
3. The Starbucks app is now on my wife's iPhone. Besides the map, weather, Yelp, and French translations, it will be only the fifth app she uses frequently.
4. Starbucks CEO Howard Schultz is a genius and seems to genuinely care about his employees and the world. If he had only stayed out of pro sports ownership (go Sonics!), his record would be virtually untarnished.


BillGuard Brings Email-Like UI to Mobile Banking Transaction Flow

By Jim Bruene on January 22, 2014 10:35 PM | Comments

image The ink wasn't dry on my 2014 wishlist, when I got a message from BillGuard founder Yaron Samid, informing me that its new mobile UI was already doing what I'd most hoped for:

Wish #1: A Gmail-like priority inbox/feed for my financial transactions.

It's as yet not quite Gmail-level functionality -- for example, I'd like more tagging options than just "flag for later" -- but compared to the state-of-the-mobile-art today, it's pretty awesome. Thanks to BillGuard for getting the year off to a great start (note 1).


How it works

imageBillGuard aggregates credit and debit card transactions and flags suspicious items for review (see previous posts). So in that way, it has always acted like the Priority Inbox function within Gmail. However, its desktop UI looks more like a traditional PFM than an email inbox.

But for the smartphone, BillGuard has dramatically changed the interface. As you can see in the inset, they use "Inbox" as the name of the transaction register. There is even a red bubble showing how many new charges are available for review (see inset right).

The five primary items on the main screen:

  • Large green "card" >> Summarizes current month's spending across all aggregated cards (you can also swipe through the individual cards)
  • Inbox >> New transactions and any that you've flagged for followup
  • All >> All transactions in a single infinitely scrolling list (I have 1,000+ transaction going back three years, and I can scroll through all of them in less than a minute). You can look at all transactions or just the recurring ones.
  • Analytics >> Month-over-month spending graphs
  • Savings >> Merchant-funded offers


imageMore on the UI

1. Inbox view (click screenshot for a larger graphic):

  • Transactions are sorted with suspicious and unknown merchants listed on top and new, unviewed transactions below
  • Users can choose the right "Follow Up" tab to view only those transactions they have flagged for followup (see #x below)
  • User can swipe the transaction right to move it out of the new transaction inbox, as shown in the green "Metropolitan Market" transaction at right

2. Transaction detail image

  • The transaction "card" contains expanded info on known merchants such as full name, location, and URL
  • There are three key buttons:
    A. Green checkbox to okay the transaction, removing it from the inbox
    B. Orange "followup" button to keep the transaction in the pending list for later review
    C. Small gray box in upper right with a number that indicates how many transactions you've had with this merchant; clicking it brings up the list of all (10 in this case)


image 3. Merchant offer

  • Based on my transaction history, a discount offer from Target is displayed; clicking the green button brings up redemption options, in this case:
    - Email offer
    - Shop now



1. The mobile UI was actually released in the latter part of 2013.
2. Screenshot at top of post is an iPhone notification.


New Y Combinator Fintech Grad, Coin Begins Pre-orders, Tech Press Goes Crazy

By Jim Bruene on November 14, 2013 5:38 PM | Comments

image It must be a slow news day. Two years ago, fintech barely got a mention in the mainstream tech press. Today, Coin, a stealthy "credit card 2.0" startup backed by Y Combinator and K9 Ventures, was covered almost immediately by 21 tech blogs (and counting). VentureBeat appears to have broke it first.

My favorite headline:

Master card? 'Coin' combines, debit, credit and others into one
--  by Devin Coldewey, NBC News

It's currently the fourth highest ranked article on Techmeme and it's the number 1 trending startup on Crunchbase today, beating Snapchat, which just turned down $3 billion from Facebook (bubble maybe?).


Anyway, for anyone who's missed it, Coin is planning to release a programmable mag strip card along the same lines as Dynamics. Coin says its plastic card will hold up to eight distinct card details at a time, all accessible via a button and miniature LED screen on the card. The card syncs with your smartphone so you can swap out the eight cards anytime, for an unlimited number stored in the phone. It even beeps at you if you walk away from the Coin card.

image Coin announced a pre-order today. At 2:15 PM PST, the company said it had reached it's pre-order goal in 40 minutes, selling more than 1,000 at its website today (cost = $50 + $5 shipping). That in itself is a sign of the times. An unknown startup (albeit with YC alum cred) crowdfunding on its own site and raiding $50k in less than an hour (see note 1).

For those concerned about the card's potential use by credit card thieves, Coin requires the mag strip to be read via a Square-like dongle AND a photo of the front/back of the card which must match the mag stripe info AND your Coin profile.

The 2-minute video showing how Coin works has already been viewed more than 250,000 times. That has to be a single-day fintech record.

Video link

Bottom line: Some day, plastic cards will be relegated to the Smithsonian and the auction pages of eBay, but that day is many, many years in the future (see note 2). So the multi-card "plastic 2.0" concept from Dynamics, GoNowCard, Escardgot, Protean and others, could be a viable transitional technology. 

At $50 a pop (scheduled to double next summer to $100), Coin will clearly occupy a relatively small niche. However, if the price comes down to something closer to a burger and beer in NYC/SF ($15 to $20) or better, the startup uses a monthly freemium subscription model, it could take off.


1. I snagged one of them, so check back next summer for a report. 
2. For more info, see our recent Online Banking Report: Digital & Mobile Wallets(published Feb 2013, subscription).


Thoughts on Perkstreet's Demise

By Jim Bruene on August 14, 2013 11:40 AM | Comments

image If you follow U.S. virtual banking (see note 1), you have likely heard that one of the biggest, at least in terms of venture funding ($15 mil), is closing its doors. Boston-based Perkstreet Financial is shutting down Sep 26 and will not be able to pay out the accumulated rewards balances held by its customers (rumored to be about $1 million, see note 2).

While I thought the startup had a great team (ex Capital One), I did not follow it as closely as Simple/Moven because it was not really a technology innovator. It was all about the rewards, which seemed like a good plan, especially since the money was paid out on merchant gift cards, presumably acquired below face (see our post on its launch). I never saw their business plan or heard their investor pitch, so this is all speculation.

I tweeted that they were done in by low interest rates, which made all those high balances (it took $5,000 on deposit to earn the top rewards tier) practically worthless. But they were founded in 2008 with $5 mil of VC funding in 2009 and $9 million in 2011. That was all done in the midst of the ultra low-rate environment, so clearly the low-rate deposit environment was no surprise to the bank and it's investors. They were banking on rates going up, but like traders who place big bets on corn, oil or currency futures, commodity trading is a high-risk business.

Falling debit interchange rates didn't help, but they were Durbin exempt, so that wasn't as dramatic of a revenue hit as it was at the big banks. In fact, CEO Dan O'Malley told the NY Times last year that their interchange had remained unchanged.

My guess is they were done in by the problem that every financial startup faces: It's really, really, really hard to get customers to send money to a web-based startup, especially when there is no immediate short-term gain. Their acquisition costs, especially in a low-rate environment, must have been unsustainable.  ING Direct (which wasn't really a startup) was able to attract billions of deposits, but that was because customers were transferring in $30,000+ balances in order to immediately gain $500+ in annual interest (back in the 5% APY days 10 years ago).

Also, while Perkstreet had a great consumer-advocacy positioning, "use debit, avoid credit," that was a bit of a mis-match for the customers they were targeting, big-spending rewards junkies which could afford to park $5,000 at the startup. Most existing big spenders are fond of using credit card programs with similar rewards, so changing their behavior was a continual challenge.


  • Traditional banks: They have one less aggressive online competitor to worry about. It also could put a damper on VCs future bets in this area.
  • Perkstreet customers who cashed out their VC-subsidized rewards prior to the Aug 12 shutdown.
  • NY Times personal finance columnist Ron Lieber who was was skeptical in mid-2010 about the long-term viability of Perkstreet's then-2% rewards rate.


  • Perkstreet customers who had yet to cash out a significant chunk of their rewards balances.
  • Other virtual (aka neo) banks (Moven, Simple) may face increased skepticism from investors and prospective customers. However, their business plans are much different (no rewards for one thing), so this is probably a temporary setback.
  • The personal finance gurus who recommended Perkstreet (see Dave Ramsey ironic "companies we trust" screenshot below), especially those that pulled in affiliate dollars from the startup.

Bottom line: Perkstreet was a $15 million interest-rate bet that didn't pan out (note 3). While I feel for their team, they are sharp and connected and knew they were in a high-risk business. For the most part, they will move on to next challenge with new-found insights. Had rates gone back to 3% or higher, Perkstreet would have likely been in good shape, enjoying its position of being highly recommended by Dave Ramsey and the other personal finance sites.

------------------------------------- homepage (29 July 2013)


1. Our term for third-parties that function similarly to banks, but don't hold the deposits, instead passing them through to FDIC-insured banks. We covered Perkstreet's launch in 2009 here. We took an in-depth look at truly virtual banks (Personal Capital, Bank Simple, and PerkStreet) in our Oct 2011 Online Banking Report.
2. The $1 mil number was mentioned on Twitter from an unconfirmed source, so no claim to its accuracy. The company said previously it had paid out $4 mil in rewards. All deposits are held in FDIC-insured banks, Bancorp Bank or Provident Bank, and are safe and available to all Perkstreet customers. In better times, someone might have stepped in to honor the rewards and buy the company at a fire-sale. But paying $1 mil+ for a group low-margin customers was obviously a tough sell.
3. I'm sure the failure was a combination of hundreds of things and is way more complicated than I'll ever know. I'm just addressing the big headwinds facing financial institutions, especially startups. 


Financial Innovation Marches On, Even in July

By Jim Bruene on August 1, 2013 10:11 AM | Comments

image I subscribe to about 800 blogs/alerts and usually find one or two new fintech companies, potential Finovate presenters, every single day. But July was slower, with the pace of new companies dropping to a few per week. Even though I know summer tends to be quieter, I always start wondering if we've finally invented everything...then I wake up to my RSS feed this morning and find two clever new services launching today:  

  • Crowdsourced home values: Everyone who owns a home wonders how much it's worth. But unless you have a real estate agent in the family (and even then, they are probably biased to the high side), it's a time-consuming and not-so-exact science to get a professional appraisal. Enter Redfin's "home price whisperer" service. Participants simply submit their house address and target price, and the company will have 250 others users give the valuation a thumbs up or thumbs down. While it won't put realtors out of business, it's a great way to get a quick handle on where you stand on what can be a key part of your financial security. (Another new startup, Trov, just landed $6.8 mil to help value less liquid assets).
  • Scam-protection geared to the elderly: Ever since Y-Combinator (YC) spawned a pair of billion-dollar companies during the Great Recession (AirBnB, Dropbox), I've been watching closely to see what its graduates will offer up to the financial services world. At FinovateSpring last May, we saw 2012 YC graduate LendUp (watch its Finovate demo here) wow the audience (and win Best of Show) with its service to lift consumers out of the payday lending cycle into less-expensive bank credit products. In a similar vein, 2013 YC graduate True Link Financial just announced a service to protect consumers, especially the elderly, from getting scammed by misleading or downright fraudulent charitable solicitations and other gray charges (it's like BillGuard, but trying to block the questionable charges first, rather than dispute later). It's basically a $20/yr prepaid card with customizable spending controls.

image So, it looks like we have officially moved into the second half of the year and all the fintech excitement that will bring. I'd be remiss if I didn't put in a plug for the upcoming FinovateFall, where we'll have 72 demos (full list here) offering up a plethora of new ideas. The early-bird deadline is Aug 2. So register now and save. 


The Contactless Sticker as a Mobile Wallet Trojan Horse

By Jim Bruene on July 19, 2013 12:13 PM | Comments

imageI've had Discover's Zip contactless sticker pasted to the back of my iPhone for a few years. Although I don't run across very many places to use it in Seattle, I enjoy the user experience when it works. It's not a huge time saver, but it's easier to wave my phone than dig the right card out of my "analog wallet." And it usually is interesting to the clerk, since "paying by phone" is still a novelty. 

Whether Discover has benefited from issuing me a sticker is debatable. Stickers are issued only by request (at least on my account). Discover not only had to pay an extra $3 or $4 for the sticker (note 1), but also paid a customer service rep to answer the phone and take my request. Assuming they incurred an admin cost of $7 to $10 to process and mail the sticker would make the total cost to Discover $10 to $15. Therefore, my measly $300 in incremental spending hasn't yet given them a positive return. But if more terminals were around, I'd have put thousands on it, and they'd be ecstatic.

The reason I'm writing about stickers again, is that my Moven card and sticker package arrived last week (see pictures below; previous post; note 2). And I thought how much more impressive the startup's card mailer looked with the Moven sticker (and supporting mobile banking graphics) than the typical bank card mailer (Simple excluded, of course).

I know the extra $3 to $5 it would cost to toss a sticker into the card mailer is a huge expense. But I think the potential benefits makes it worth considering, at least for a portion of your customer base. (And if you add the sticker as part of a premium package, you might even convince customers to pay for it.)

Financial institution benefits:

  • Increased POS transactions: Move your card to the top of wallet instantly when users are at a working, contactless terminal.
  • Increased online transactions: If you print the card number, expiry date, and security code on the sticker, cardholders would turn to your card more often when arriving at check-out at ecommerce sites. It also would work for mobile commerce, although not as well since users would have to flip the phone around to read the numbers.
  • Increased loyalty/referrals: Once that sticker is placed on a phone, it's a constant reminder of your bank and card. It also makes it easy to show off to a friend.
  • 1st gen mobile wallet: The sticker, combined with your mobile banking app and/or SMS alerts, provides a fairly solid "mobile wallet experience" to compete with Google and others.
  • Seamless transition to NFC (or whatever): When the day arrives that the contactless capability is embedded in most handsets (yeah, Apple, we are looking at you), you simply tell customers to pull off the sticker and keep on waving that phone at the terminal. 
  • Competitive advantage: You differentiate yourself and earn referrals from a certain group of customers who are impressed with tech innovations.

Bottom line: Increasing costs with a contactless sticker is not for everyone. But if you are looking for a tangible point of differentiation that also builds your tech-cred, this is one possible solution. Moven, for one, is banking on it. 


Moven outside envelope (13 July 2013)
Note: I know this is good for security reasons, but I was expecting something a little snazzier. Luckily, the inside card carrier was the best I've ever seen (see below).


Moven card carrier
Note: Sticker is on left, plastic on right



1. I've seen a wide range of prices quoted for contactless stickers, but I believe the relevant range for most issuers is $3 to $7 each, depending on quantity.
2. I can't report on actual Moven account transactions because I haven't verified the trial deposits. While this is a clever and relatively simple authentication technique, it does require users to log in to another bank account days later, so it is easy to neglect. Moven sent me a reminder two days after my application, but that was two weeks ago. Clearly, they will have to follow up with procrastinators like me again.
3. For more info on fee-based banking services, our Online Banking Report on fee-based online services (subscription, May 2011). For more info on the "near bank" or "meta bank" phenomena see our  report on Truly Virtual Banks (subscription, Oct 2011).


Feature Friday: Capital One Offers $20 Incentive to Try ShopSavvy Mobile Wallet

By Jim Bruene on March 15, 2013 9:09 AM | Comments

image I have been fascinated with mobile wallets for a while (note 4). They've been "just a few years out" since the first Finovate (Oct 2007), where multiple mobile banking pioneers laid out their product roadmaps. And now we are starting to see real implementations. Not just Square and Starbucks. But financial institutions are moving forward. 

ShopSavvy app with single-slide purchasingThe latest rollout, the Capital One and ShopSavvy deal, was announced last month (press release). Capital One has already partnered with several major card-linked offers providers (and acquired one), but apparently it is still looking to boost its mobile efforts (note 1).

ShopSavvy is a San Francisco-based startup which has built a mobile wallet, shopping and deals apps. It has raised $11 million, two-thirds from Facebook co-founder Eduardo Saverin.

The company has integrations with a number of online merchants including Walmart, Barnes & Noble,, Target, Best Buy and others (note 2). Those links allow users find online prices, either by scanning a bar code in-store or in-app search, then purchase online with a single slide (see inset).

I got the invite from Capital One Wednesday morning with an eye-catching $20-off offer (see first screenshot below). But this wasn't like a straightforward card-linked offer where cardholders activate the deal and then buy. 

To bank this savings, users had to power through a three-stage process:

1. Sign up for an account at ShopSavvy using the link in the email. It's a relatively painless process, taking just a minute or two. None of my personal info was prepopulated (see screenshot #3-5 below).

2. Add the app to your mobile phone by locating the ShopSavvy app in the App store, downloading and opening.

3. Activate the ShopSavvy app by entering your username and password and repeating the info you'd entered online to set up your profile.

Altogether, it's a somewhat convoluted 5- to 6-minute process, but one that is probably acceptable for early adopters. I did have intermittent problems with the app, network errors, crashes and bizarre search results (note 3). But it seems to have stabilized now after the initial usage spike. 

Bottom line: Once it started working properly, the ShopSavvy features were impressive. The simple search combined with one-click purchasing would make a nice addition to a bank or card issuer's mobile app. I'm still a little surprised that Capital One is endorsing a third-party wallet. But by getting its card "top of e-wallet," the giant issuer boosts charge volume, mobilizes its card-linked offers, and gets a foothold in the wallet space.


Capital One email to customers offering a $20 statement credit to use the ShopSavvy wallet (12 March 2013)

Capital One email offering $20 discount forthe first use of ShopSavvy wallet

Landing page at ShopSavvy (link)

ShopSavvy Capital One landing page

Step 1: Join ShopSavvy

ShopSavvy signup process

Step 2: Add Capital One credit card

ShopSavvy signup, enter Capital one card

Step 3: Locate, download and activate the ShopSavvy mobile wallet app

ShopSavvy download instructions


1. Or perhaps this is more of a straight revenue-play for Capital One, with ShopSavvy paying the card issuer for each new customer.
2. Unfortunately, ShopSavvy's one-click experience does not extend to, but the app does display Amazon prices and it's just a few more clicks to buy there.
3. Initially, I tried the app with a few barcodes I found at home and it worked, but only on the media stuff. Since I didn't want to buy anything I already owned, I went to the last remaining bookstore in northeast Seattle and gave it a try. Unfortunately, this store covers the regular barcode with its own, which are not indexed in the ShopSavvy database. But when I tried it again last night, the search function was working so I was able to easily find a DVD set and buy it from for a competitive price (even before the $20 statement credit). 
4. For more info on mobile wallets, see our most recent Online Banking Report: Mobile & Cloud Wallets (Feb 2013, subscription)


New Online Banking Report Published: Breaking Down the Digital/Mobile Wallet Hype

By Jim Bruene on February 22, 2013 9:19 AM | Comments

image We now have digital wallets, cloud wallets and mobile wallets. There's the Google Wallet, PayPal wallet, ISIS, Serve, MCX,, PayPass, Lemon, Pageonce, Wallaby,  Passbook, LevelUp (see screenshot below) and 280 mobile payment startups listed on Angel List. NFC is coming, or is it? Why not just use the QR code? Or do we wait until EMV, Oct 2015?  Does this make money or just add another layer of costs? Are we having fun yet? 

Bottom line: With consumers carrying a powerful computer on their person, the days of the dumb mag-stripe are numbered. No one debates that. But what is a financial institution to do today?

That's what we set out to answer in our latest report on Digital & Mobile Wallets.

If you are not a major credit-card issuer, you may choose to ignore the issue until the dust settles. That’s a valid strategy, but it won’t help you pick up market share during the upcoming market confusion.

We believe every bank and credit union with a mobile app should dip its toes into the wallet space now with some relatively low- to no-cost positioning moves, while waiting for the tech questions to be answered this year and next.

And if you are a big issuer, you have a very interesting few years in front of you. Do you build or buy? Which of the major wallets, if any, do you throw your marketing support behind? And how do you explain any of this to your shell-shocked customers who just want to pay their tab and get away from the cash register as fast as possible? 


About the report

Digital & Mobile Wallets (link)
Payments in the smartphone era

Author: Jim Bruene, Editor & Founder

Published: 21 Feb 2013

Length: 36 pages, 10 tables, 12,000 words

Cost: No extra charge to OBR subscribers, US$495 for others (here)


Report excerpt:

First Trade Union Bank partners with LevelUp for mobile wallets

First Trade Union Bank is teasing its LevelUp mobile wallet partnership on its homepage (19 Feb 2013).


Feature Friday: Fifth Third Combines Debit & Credit on DUO Card

By Jim Bruene on January 4, 2013 3:31 PM | Comments

image Transactional banking is fairly straightforward. There are electronic payments, ATM withdrawals, debit card payments, credit card charges, and checks.

When a technology comes along that offers to combine three of those in a familiar form factor (plastic card), you would think it would catch quickly. 

But combined credit/debit cards have not gained much of a following yet. With one big exception: Fifth Third Bank.

In 2011, the Cincinnati-based bank, the 15th largest U.S. retail bank with $120 billion in assets, launched a combined credit/debit card called DUO. According to American Banker this week, "(DUO) has recently accounted for about 25% of new credit card accounts" at the bank.

My take: That may or may not be a large number depending on the bank's overall card marketing efforts, but it's a good indication that there is at least some consumer demand for the so-called hybrid card. Personally, I stopped carrying an ATM card years ago, so I would love having ATM access added to the credit cards I tote around. I would even pay a modest fee for the convenience (note 2).  

True, the mobile wallet holds the promise of combining everything into one grand app. However, it's a long, long road to mass adoption. Seventeen years into online banking, it's still used regularly at less than 60% of U.S. households (note 3).

So bring on the hybrid cards, but make sure there is also a killer mobile app supporting them.


Fifth Third landing page for its combo DUO card (link)

Fifth Third landing page for its combo DUO card


1. It's been 17 years since Web access was first launched by Wells Fargo (May 1995). Dial-up online banking predates that by more than a decade, but it was used by such a small group that it doesn't really rate a mention.
2. "Modest" would be in the $1/mo neighborhood, unless there more features were added.
3. Source is our annual forecast (subscription, Jan 2012) which we are in the process of updating and will be available in a few days. 


The iPad-Enabled Checkout Experience at the POS

By Jim Bruene on December 3, 2012 6:09 PM | Comments

The Hideout Coffee House in Austin

A few week ago I spent the weekend in Austin eating BBQ, watching my alma mater get crushed by the University of Texas, and sampling the Sixth Street ambiance.

But the highlight for me was the The Hideout Coffee House. Not only did it have great coffee and eclectic furnishings, but card customers could pay via Square through an iPad mounted in a novel wood stand (see inset; it's not possible to see well, but the ipad stand is on the counter at left).

The barista took my card and swiped it through the Square reader, which was supported by a wood guide (see similar unit left from Tinkering Monkey). Then he flipped the case over 180 degrees so it faced out towards me (see below).

Tinkering Monkey iPad holder at the POSI selected one of the large buttons for a preset tip amount and then once more to have the receipt emailed to me (I only had to enter my email the first time).

It was easier to use than most in-lane POS readers, even contactless ones, because the barista actually did the swipe. It eliminated the uncertainty about when I should tap/swipe or whether it worked or what I should do next. And I loved being able to put a tip on the card with the push of a button rather than writing it on a piece of paper or digging for change. 

Tinkering Monkey swivel ipad caseBottom line: Eventually payments will be made via proximity and settled in the cloud (my mobile will know I'm in the store and will automatically pair me to the store's POS). But there is still a long transition period ahead.

Tablet/smartphone card readers are a great interim step for smaller merchants (note 2), especially with the price wars waging at the point of sale (note 3).

Related: And banks, even though you don't have the POS issue, you can equip your frontline staff with iPad-powered sales tools (note 4). 


1. On one of the Austin freeways, I also saw a billboard for the ISIS pilot. But I didn't see any merchants promoting it. 
2. And some bigger ones. And of course, the 20,000-store Gorilla, Starbucks, is partnering with Square, though it is unlikely they'll use iPads at the point of sale.
3. Bank of America recently jumped into the game matching Square's 2.7% discount rate.  
4. Barclays just bought 8,500 iPads to equip its branch sales staff (Financial Brand post).


American Express Launches Mobile App for its Bluebird Prepaid Card

By Jim Bruene on October 16, 2012 10:34 PM | Comments

image Today, American Express released the iPhone app for its new Bluebird prepaid card which will be sold in Walmart stores and elsewhere. The app allows new customers to sign up for a Bluebird prepaid card, but in my test I was not able to get that to work (see below).

As you'd expect from American Express, the app is attractive and well designed. It includes imageimportant payment features (see inset):

  • Billpay
  • P2P payments 
  • Request money
  • Mobile remote deposit

My experience: I downloaded the 7MB app today. The only screen visible to non-cardholders is dominated by a login area. But it also has a Get Started button, which I learned was where you apply for a new card (see number 1 below). It would probably be better to call it "Get your card" or something more obvious.

This next screen contained an odd question, "do you have a Starter Card?" (with that capitalization)(see screenshot 2). Again, this is not the clearest way to make a sale. Why not just say "Do you want a new card?"

After I clicked "No," the app took me through a standard three-step process for getting a card including name/address, SS number and disclosures (see screenshots 3-5). For some reason, my company email address did not work (an error message said I could not register with that email). But a standard @gmail address worked fine. The application also has the annoying requirement for a capital letter in the password which is overkill, especially on a mobile phone.

In all, it took almost five minutes to complete because of the various errors I made along the way.  

But despite being an Amex cardholder for two decades, the company could not "verify my information" (see screenshot 6) and I was declined for a prepaid card. I went back and re-entered everything with the same result. The final error message (which could use a rewrite) suggested that the issue might be my fault. But if I thought otherwise, feel free to give them a call.

Which I did. But after 3 or 4 minutes trying to explain to the rep what had happened, I gave up. She was picking up my keywords and reading the script. But she was clearly having trouble following my story. At the 3.5-minute mark mark she suggested I "download the mobile app." That's when I signed off.

Bottom line: It looks like a great app and I look forward to using it. And I'm willing to cut American Express some slack given how new it is. The app hasn't even been officially announced, so I'm sure the kinks will be worked out shortly. 


1. Login screen                              2. Odd question

image     image

3. Application name/address          4. Application SSN/password

image      image 

5. Disclosures                                6. Error message

image       image


Launching: Automatic Location-and-Merchant-Based Prepaid-Card Reloading with Spending Controls

By Jim Bruene on October 3, 2012 11:31 AM | Comments (1)

image That's a lot of buzzwords in one title, but they're all necessary to describe the payment innovation being tested by MoviePass.

MoviePass is a new service designed to do for physical movie theatres what Netflix did for rentals, turning movie-going into an all-you-can-eat subscription service. For $25 to $40/mo (depending on where you live), MoviePass allows you to attend as many movies as you like (but no more than once per day; note 1).

However, the company has had trouble getting theatres on board, who are rightly concerned about cannibalization. So the startup has been working on ways to get around the need to have theater partners. They tried in-home voucher printing, but it proved cumbersome and still required some level of theatre participation.

So MoviePass invented a clever workaround using a proprietary prepaid debit card. The new system allows subscribers to go to any movie at any theatre in the country, as long as they accept debit/credit cards. The service is in private beta with 1,500 users. You can add your name to the 75,000-person wait list here.

MoviePass iphone app Here's how it works:

1. User goes to the theatre location and checks in using the MoviePass app (inset). The check-in only works within 100 yards of the theatre.

2. MoviePass then adds the price of the movie to its prepaid card.

3. Consumer walks to the window and purchases a ticket with the MoviePass card using up the entire balance (note 2).

It's a clever mashup of GPS, point of sale, mobile and payment technologies.

Relevance: No word on who's powering the card, but hopefully we'll see it used in other applications. It could be a solution for youth spending (parents preapprove locations/amounts), employee purchases (employers preapprove locations/amounts), or rewards/offers (money appears on your card only when you check in at specific locations).


1. Clearly, the company won't be able to make a return at $40/mo unless they cut deals with theatres for discounts (especially to fill second-run and weeknight seats), which is the end-game here. At a cost of $5/ticket, it probably works. At $10 per ticket, movie buffs hitting theatres two to three times per week are going to kill the model.  
2. Presumably, MoviePass has controls that limit the purchase to the theatre where the checkin occurred. And it must be limiting checkins to the registered phone only, otherwise the card could be passed to friends and the biz model won't work. I also assume MoviePass will confiscate any unused balance if the ticket price is less than what was advanced or if the customer doesn't buy a ticket.    
3. It would be interesting if they also partnered with RedBox so you could get unlimited DVD rentals AND theatres in one monthly price.

Comments (1)

BillGuard is First Financial Service to Integrate with the New iPhone Passbook Wallet

By Jim Bruene on September 25, 2012 6:21 PM | Comments

imageApple's Passbook is a massive wildcard in the race for mobile payments, banking and rewards. Will the iPhone's massive user base take to it like they did iTunes, or will it be one of those ideas that sounded good on the drawing board, but just doesn't resonate with consumers?

imageNo one knows if it will stick (although I got pretty carried away with the possibilities when it was announced in June), but given the potential upside, it seems a solid bet.

Starbucks is about to push its massive mobile base onto Passbook, a pretty strong endorsement. American Express has thrown in its support. No word yet from other financial players. 

Except BillGuard, which gets to lay claim to being first. CEO Yaron Samid emailed yesterday announcing beta support for Passbook. The startup built a landing page for the new service at <> (see first screenshot) and is even testing some Google Adwords spending around the feature.

BillGuard users can now view each of their monitored credit cards within the Apple Passbook application. It's a two-step process to get the cards added to the Passbook utility.

  1. Users click on "Add to Passbook" at top of BillGuard's normal online dashboard (see second screenshot)
  2. BillGuard sends an email with a "pass" attached for each card. Users view the email on their iPhone, then click each attachment to add to the iPhone utility (see third screenshot)

Once added, user can view their current card balance and recent transactions from the Passbook card (see last screenshots).

Bottom line: It's a great move for BillGuard, especially since it does not yet have a native mobile app. Now I can click on the Passbook icon and without logging in, quickly see the activity on all my registered cards, and whether there are any suspicious charges.

Banks could do something similar. Basically, creating a no-login card mini-app that aligns their brand with the iPhone 5. However, one area to consider is security. Anyone who got a hold of the email BillGuard sent me could start monitoring my card(s) through Passbook without my knowledge. For a bit more security, passes can be distributed directly through native apps and websites.


BillGuard Passbook landing page (link, 25 Sep 2012)
Note: Example is a Chase card "protected by BillGuard" image

Step 1: Click the "Add to Passbook" button on top of BillGuard's main online dashboard


Step 2: BillGuard emails a "pass" for each card on file. Users open the email from their iPhone and click the attachment(s) to add each card to Passbook


Results: Each pass has its own "virtual card" in Passbook, with a "front" and "back"
Front includes current balance                     Back includes recent transactions

image     image 

Note: The placeholder barcode displayed in the BillGuard pass is a customer referral form according to MyBankTracker. When Starbucks unveils its Passbook support next week, I'm sure the barcode will be usable to make a mobile payment at the Starbucks counter.


Discover Card Gives Away an iPad per Day to Paperless Cardholders

By Jim Bruene on August 21, 2012 6:08 PM | Comments

image After adding my Discover Card to Google's mobile wallet, I was automatically logged off after a period of inactivity (or what I prefer to call blogging). On the resulting page, the card issuer explained what happened on the left side and told me about their current estatement incentive program on the right (see first screenshot below).

Discover is giving away an iPad every day to its paperless customers (landing page) from June 1 to Nov 30. That's a total of 183 iPads (official rules). Both new enrollees and existing ones are eligible.

Since I'm a sucker for online sweepstakes, I pressed the button, only to find out that I was already enrolled (see second screenshot). Not only is this annoying and somewhat confusing (am I still in the running for the iPad?), it could be counterproductive. Users are given the option on this page to turn paper statements back on. So customers might mistakenly turn the paper back on thinking that's how you enter the sweeps. To prevent that, Discover needs to reinforce the sweeps on this page. 

Bottom line: Periodic paperless incentives are a win-win. You show gratitude to existing paperless customers while pushing a few more paper holdouts over the edge. However, be careful how you handle already-enrolled users.


Discover Card logoff screen publicizing its iPad giveaway to paperless customers (17 Aug 2012


After clicking on the "Go Paperless" button I was sent to this screen
Note: Discover should remind me that I'm still eligible for the prizes


Discover publicizes the winners (link)



Note: For more ideas, see our report on paperless billing and banking (Nov. 2010, subscription).


First Look: Google's Save-to-Wallet API at Discover Card

By Jim Bruene on August 16, 2012 8:39 PM | Comments

image This week, Discover became the first to use Google's new Save-to-Wallet API to seamlessly add its card to the wallet directly from its secure site. This API supports the recent expansion of Google's wallet to all US-based credit cards. 

To see how it works, I logged in to my Discover Card tonight and looked through account settings and the Help area for details. Coming up empty, I searched for "Google wallet" within the secure site and found a prominent link to the function (see first screenshot below).

The API worked even better than I expected, taking just 15-20 seconds (after I found the right page). Here's the 3-step process:

  • Press Add Your Card from within the Discover Card secure site (screenshot #2)
  • Enter your Google password into the Google popup page (screen #3; I was already logged into Gmail, so Google had prefilled my username)
  • Accept the API request from Discover (screen #4)

That's all it there was to it.

Optionally, users can go back to Google through the link on the Discover page (screen #5) to make it the preferred payment card (screen #6). Finally, Discover closes the loop with an immediate confirmation email thanking me for adding the card (screen #7). Well done.

Bottom line: Unless you are big enough to negotiate financial considerations from Google and/or build your own mobile wallet, you might as well drop this API into your secure site now. It gives your debit/credit card a fighting chance to be the default card in the wallet. While that might provide a slight spending lift, the major benefit is associating yourself with mobile wallets in general and Google in particular.


1. Search results for "Google wallet" within Discover Card secure card management (16 Aug 2012)

Search results at Discover Card for "google wallet"

2. Landing page at Discover Card for adding it to Google Wallet

Discover Card landing page for adding to Google Wallet

3. Popup to login to Google account (at

Login to Google Wallet through your Google account 

4. Authorization screen (at

Google "Add Card to Wallet" API confirmation 

5. Confirmation screen with suggestion that cardholder go to Google to make Discover the default payment card
Note: Highlighting and arrow added for emphasis

Confirmation screen that Discover has been added to Google Wallet 

6. My Google Wallet contains the Discover Card on top

Note: The expired MasterCard below is a remnant of the old Google Checkout that has been replaced by the Wallet

Google wallet containing Discover Card 

7. Confirmation and thank-you email from Discover

Email from Discover Card confirming addition to Google Wallet


Communicating Account Aggregation Issues: BillGuard Puts Extra Effort into Contacting Customers

By Jim Bruene on July 19, 2012 2:52 PM | Comments (2)

image One key "advanced PFM feature" (see our most recent report for more) is the ability to track outside accounts under one roof, a.k.a. "account aggregation." But a nagging problem remains with this wonderful automated solution: "login maintenance."

The user must do some fix-up work whenever their login credentials are changed for one of the accounts or when the bank throws a curveball to the aggregation robots. It happens a lot and is one of the main reasons customers stop using aggregation services.  

PFM providers struggle with how best to educate and motivate users to stay on top of this routine maintenance.

BillGuard uses a proactive approach that I like. When I recently changed the password on a credit card, the company sent me an email explaining that they were no longer able to access my transactions and that it was probably from a "change in the way the bank handled logins" (see first screenshot below). In my case that wasn't true, so it would be helpful if BillGuard also mentioned that the cause could be a password/username change.

Then the company did an excellent job walking me through the maintenance process and providing positive strokes at the end of the process, e.g., my card is now "protected" (last screenshot).

But I especially appreciated BillGuard's extra effort during the aggregation process after I'd reestablished the login to my credit card. Since it was taking extra time to download the transactions, BillGuard asked if I'd like to continue waiting or close the session and have the results emailed to me (see second screenshot). Excellent customer advocacy!  


BillGuard email about "card connection issue" (12 July 2012)


During the download process, BillGuard asked if I'd prefer to close the page and have the results emailed


Close-up of the message


After aggregation is reinstated, BillGuard shows my card is now "protected"


Comments (2)

Out of the Inbox: Pitches Capital One Credit Card in Triggered Email Alert

By Jim Bruene on June 14, 2012 4:04 PM | Comments

imagePrecise, content-sensitive advertising is extremely powerful. It's what made Google a giant. 

In financial services, the biggest advertising-driven success (after BankRate and Google), at least in terms of market cap, is Its revenue stream is entirely made up of targeted offers to customers who aggregate banking transactions on its site.

The company wisely uses email to deliver some of the advertising pitches. As we've discussed before, Mint is of the few financial companies directly monetizing triggered alerts.

We were impressed by the latest effort received Tuesday (see below). Having noticed that our Chase business card was used internationally, incurring a $14 transaction surcharge, they wisely pitched us a Capital One no-foreign-transaction-fee card.

Interestingly, we already have not one, but two of those Cap One cards (personal and biz) and they are both aggregated at Mint. So I'm not sure if this alert is more of a reminder to use our Cap One charge when traversing the world or that Mint doesn't check current product usage when cross selling (or they don't care). If Mint is only paid on performance (eg. by new accounts generated), then it doesn't matter to Cap One that they are marketing to an existing customer.

Bottom line: The example demonstrates the marketing value of hosting the aggregated accounts.


Mint triggered alert (12 June 2012)
Note: The advertisement is two-fold. The banner with "apply now" is the most eye-catching, but also easier to ignore. There is also a text call to action above it, that looks more like alert copy. It says: "Stop paying extra to use your credit card overseas. Get a card that doesn't charge foreign transaction fees."



Apple Just Put a Mobile Wallet In 100+ Million iPhones: But Is This Passbook a Friend or Foe of Banks?

By Jim Bruene on June 12, 2012 1:46 PM | Comments

iPhone Passbook app If it wasn't obvious already, Apple is becoming the operating system of your life. And since money touches much of what we do, it's no surprise that the company is moving into the payments side.

Actually, Apple is already there. The most valuable company on the planet is already the biggest payments issuer, with 400 million payment-enable iTunes accounts.

Now, when iOS6 becomes available this fall, Apple will be the biggest mobile wallet provider as well, when 100+ million iPhones automatically getting one with the new OS upgrade.

The new baked-in wallet app is called Passbook, I presume because iWallet was taken, or Apple is saving it for something even bigger.

But regardless of the name, Passbook has broad implications in payments and commerce in general. One look at the UI (inset) shows what banks are up against. An app loaded with store cards! Just what a gazillion big-spending early adopters have been hoping for (congrats to Target and Starbucks for leading the way again).

The main reason iWallet Passbook is such a big deal, besides the Apple halo effect, is that it automatically opens your "virtual card" when you walk in the store. Yes, you read it correctly. Automatically. Opening. Mobile. Payment card. 

Starbucks "card" in Apple's PassbookFor example, when you walk into Starbucks its virtual store card, rendered in 2D bar code, will be triggered on your phone. You just swipe the lock-screen notification, enter a PIN (if necessary), scan your phone at the POS, drink your coffee and enjoy the perks (see below).

Is the POS experience dramatically better than using your Visa/MasterCard plastic? Not really during those 15 seconds of your life, but it's not worse either. Shaving 2 seconds off transaction time is not what this is about. It's the retailer value-adds that make it a huge winner.

Smart merchants will tack loyalty points/rewards/amenities (how about a free shot of vanilla in that latte?) on to Passbook-enabled purchases and you will soon be conditioned to pay with your phone. Really, just having your receipt stored safely away in the Passbook app could make the difference between using the store card vs. MC/Visa.

Because Apple wants to be platform, not a bank, they are making the tools available to developers to create apps that play nice with Passbook along with all the other iPhone utilities. So I see this as bank/issuer friendly, so far anyway, though not everyone will benefit.

While this is only speculation, I see a couple things likely to happen:

1. Proprietary single-brand (closed loop) payments make a comeback: With a direct connection to the front-screen of your iPhone as soon as you walk in the door, retailers can put together compelling in-store loyalty offers on the fly. For example, I can walk into Best Buy, and up pops my store loyalty card on the front of my iPhone. And they can dangle all kinds of bennies at me in real time, while encouraging me to pay with my Best Buy credentials rendered in a QR code on the screen (and later via NFC or a "cloud" connection).  

2. Banks and card issuers partner with retailers to become the preferred "Passbook card:" For stores that don't want to bother with the payments piece, instead of presenting a store card with the customer walks in the door, they could present the preferred partner card. For example, Costco, which only takes American Express, could launch an AmEx Passbook card when customers walk in the door.

3. The beginning of the end for paper receipts: Users will have the comfort knowing their receipts are all accessible via iPhone (and in the iCloud). So they will opt out of paper receipts at the register.

4. Mobile offers/coupons just found a new home: If you want iPhone-wielding consumers to see your offer, Apple just created an instant place to store (and discover) deals. I'm not sure if this is good or bad for ad-supported banking, but it's something to consider.

Bottom line: I could go on (for instance about Siri integration), but my head is about to explode with all the possibilities. Time will tell, but I think we just witnessed a watershed moment in mobile-enabled shopping and payments. 


Recommended reading:

  • Read the full analysis by Glenbrook's Scott Loftesness here.
  • Fantastic stuff on on Quora too (HT to Brad Strothkamp for the link via Twitter).
  • The list of all the features via Techcrunch.

Two Card-Linked Offers/Rewards Startups Launch at TechCrunch Disrupt

By Jim Bruene on May 24, 2012 1:04 AM | Comments

image While I've read TechCrunch since its beginning, I've only been able to make it to their semi-annual event, Disrupt, once before. It's usually just too close to our own Finovate. But this year I made the trek to Pier 94 in Manhattan to see what was going on in tech in general and to meet with the fintech startups in the Startup Alley or Battlefield launch competition.

There were six fintech companies in total. Three offered variations on card-linked offers, one has developed an alternative payment system, one was a newer payments gateway, and surprisingly there was just a single crowdfunding platform.  

Startup Battlefield competitors from fintech: TechCrunch selected thirty companies in advance. All have agreed to launch their companies on stage at the event. 

  • imageCardify: Card-linked loyalty/offers geared toward local merchants. Sean Rad is CEO and of the West Hollywood company which has raised $750,000.
  • imageMirth: Same as above. Jeremy Philip Galen is Founder. The NYC-based company is bootstrapped. 

Startup Alley participants from fintech: These are companies less than two years old that qualify for a table in the networking hall. Each day one of the Alley companies is voted to the stage to imagecompete in the Battlefield.

  • LocalBonus: A card-linked offers platform focusing on the local market
  • imagePayintele: An alt-payments company using barcodes to pass info between merchant and payee (I'll do a whole post on them shortly)image
  • PayLeap: A payments gateway from two previous execs
  • The Crowd Funds: A crowdfunding startup from former image E*Trade CTO, Joshua Levine

Observations: It was interesting to see three new card-linked rewards companies all going after the local market. But if you look at what Groupon's done with local merchants and where Square is headed, you can see there are huge opportunities here.

And the payment APIs available from Cardspring (which both Mirth and Cardify use) are making it relatively easy for startups to tap into a merchant's card transaction streams to make offers, tally rewards, identify frequent customers, and communicate with them.

As a side note, Cardify has a gorgeous UI. It's very hip and high-end looking like something you'd see at more well-funded companies such as Square, Simple or Mint (screenshot below). Kudos to the design folk there.


Cardify homepage (24 May 2012)

cardify app as seen on its homepage


1. While not a fintech company, as an auction junkie, I was intrigued by Outbid's social mobile/online auction platform. The company said it's talking to four banks looking to host live auctions on their site to use for promotions and social gaming. I think it's a promising idea, one I've explored a few times over the years. But with Facebook Connect you can actually get a critical mass of customers involved very quickly. The company had the cheesiest demo I've ever seen (and that's saying something), but that shouldn't impact your decision.


Feature Friday: Wow! More City Bank Texas Mobile Controls for Debit Cards

By Jim Bruene on May 10, 2012 9:10 PM | Comments

imageLuckily, I ran into Jim Simpson, SVP IT at City Bank Texas, at Finovate Tuesday, or I might have missed his bank's significant new app update this week.

imageI am so impressed with what they are doing down there in Lubbock. First, it was the debit card on/off switch a few months ago. And now they just added three new control switches (see inset):

  • Increase daily withdrawal limit at the ATM
  • Increase daily debit card purchasing limit
  • Allow foreign transactions

All three controls temporarily increase limits so customers can easily approve their own authorization exceptions (within limits). 

Bottom line: Putting more control into the customers' hands is what mobile banking is all about. And City Bank has taken the lead.

But they are just getting started. From what Jim told me this week, they have plenty of other ideas in the hopper. Keep an eye on these guys. 

Update 17 May: I neglected to mention that the software is from Austin, TX-based Malauzai Software.


Feature Friday: Ally's Mobile Cash-Bank Finder & Call-Center-Hold-Time Meter

By Jim Bruene on May 4, 2012 11:02 AM | Comments

imageAlly Bank jumped into the mobile fray launching a pair of apps last week, one for customers with account access, and the other an "ATM & Cash-Back Finder," the anyone can use.

imageThe apps are well designed, as you'd expect from a direct bank with 1 million customers and $30 billion on deposit (note 1). But there were two novel features worth highlighting:

1. Real-time wait time in the call center: The mobile app contains a very prominent real-time indicator of just how long you'll be on hold if you call Ally Bank. I've already raved about the Website version of this feature, so I won't go into much detail. But it makes even more sense to place it front and center on an app on a mobile phone used to call the bank (see left screenshot below).   

2. Cash-back locations included with ATM finder: While I'm not sure if this is an industry first, but after a fairly extensive search in the Apple App Store came up empty, I know it's not common. Ally combines ATM locations and places where you can get cash back at the POS into a single map and/or list view (see right screenshot below).   

Ally mobile banking app                  Ally ATM & Cash Finder app 
for customers                                              for anyone                           

Call Ally feature in mobile app      Mobile map from Ally shows ATM and cash-back POS locations

Ally also makes sure its website visitors know they've gone mobile with a clever graphic in the middle-right of the homepage.

Ally homepage featuring new mobile offering (3 May 2012)

Ally Bank homepage announces new mobile apps


1. Ally announced the 1-million-customer milestone along with mobile apps (press release). Compared to a year ago, accounts were up 30% and deposits grew 25%.
2. While this could increase call-center calls, Ally must believe the customer advocacy positioning makes up for the increased costs.


Capital One Add Rewards to Mobile App, Includes Ability to Redeem for PREVIOUS Travel

By Jim Bruene on April 20, 2012 11:24 AM | Comments

Capital One mobile rewards main page Although it was one of the last major banks to launch an iPhone app, Capital One is now positioning itself to be a leader in mobile. Its April 5 iPhone app update included a new rewards function that's the best I've seen.

Rewards point totals are clearly shown on an old-school "flip number" display (see screenshot right). But the novel part, and this may be an industry first, is the ability to redeem rewards in real-time, for travel purchases you've ALREADY MADE. (You can also redeem for cash or gift cards.)

I thought this was some kind of typo when I first saw it in the marketing material. So I tested it myself this morning. And sure enough it does exactly what it says.

Previous travel purchases made on the Capital One card are displayed in the app. Users select the one(s) they want to redeem for mileage points and Capital One provides a statement credit to refund the user for the purchase. Brilliant!


Capital One's mobile reward redemption for previous travel (20 April 2012)
Note: Select a transaction (below left), confirm (below right).

Capital One mobile rewards screen      Capital One mobile rewards redemption confirm      


imageI also like Capital One's new app "home page." Instead of forcing a login before users can do anything, the bank offers several non-secure content areas:

  • Browse our products
  • Find branch/ATM
  • Mobile banking FAQ
  • Contact us

These are useful for customers who can't or don't want to log in. And of course, for prospects kicking the "mobile tires" at the bank.


Marketing: Bank of America Offers $25 to Reactivate Visa Card

By Jim Bruene on April 3, 2012 9:06 PM | Comments (3)

imageLast fall, my primary personal credit card from Bank of America was compromised, and I was issued a new one. While I was waiting for the new card to arrive, I got in the habit of using another bank's card. When the replacement card arrived, I stuffed it in a drawer, unactivated and still stuck to the mailer, forgetting I'd ever received it.

Fast forward six months, and I get an email this morning from Bank of America, offering $25 if I spend just $250 on the moth-balled card before June 30 (screenshot below). Coincidently, I'd just run across the forgotten card while doing a little preliminary tax prep. 

The offer requires activation, a smart move that avoids paying out $25 to someone who never even noticed the offer. And I was pleasantly surprised that I had to do nothing more than click the Activate Now button in the email. Within a few seconds I was greeted with a confirmation delivered through a BofA webpage (second screenshot; see update below).

Bottom line: It worked. I've got the BofA card back in my wallet, and I'll be using it tomorrow. And as I'm sure the bank knows, they are likely to make the $25 back within a month or two, assuming I resume my previous charging behavior. Well done, BofA card marketing dept. 


Bank of America email offering $25 cash back to reactivate my credit card (3 April 2012)

  email from Bank of America offering $25 cash back

The one-click activation process* took us to this screen on the BofA website

Bank of America confirmation screen after offer acceptance

*Update 4 April (in response to comment): Although I didn't test it, it looked as though the single click activated the offer only. I still had to phone BofA using the usual process to activate the card. It would have been nice to have been able to do both through the Activate button. 

Comments (3)

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.


American Express Serves Up P2P "Pay Me Back" on Ticketmaster

By Jim Bruene on November 21, 2011 7:07 PM | Comments

image It's a problem as old as money itself. The person making a purchase on behalf of a group inevitably gets stuck with a larger share as others "forget" to pay him/her back (note 1).

Two weeks ago, American Express launched a clever product tie-in on TicketMaster to help change that. After making a purchase, a prominently placed box suggests using Serve to "Get Paid Back." Buyers are encouraged to use Serve to send money requests to friends for their share of the tickets. Given how social ticket purchasing is, it's a great place to introduce P2P.

But there's still the not-so-small problem of getting everyone signed up. Both sender and recipient must have Serve accounts. And while all transaction are currently free, the FAQs warn that coming Jan 1, there will be a fee of 2.9% + $0.30 per transaction funded via credit card. Checking account (ACH)-based transactions will remain free.

To beat PayPal at this game, the service needs more than just well-placed ads. For example, integration directly into the Ticketmaster shopping cart, where buyers could enter friends' email addresses to automatically "charge" them their share (subject to their approval of course).


Product placement after purchasing on Ticketmaster (11 Nov 2011)


Landing page


Note: We covered P2P payments two years ago in our Online Banking Report (subscription). 


Square Updates its Merchant Platform

By Jim Bruene on November 15, 2011 6:48 PM | Comments

image In 15+ years of accepting credit cards, there have been few notable communications from our acquiring bank or payments gateway, other than normal transactional messages (note 1). Square looks to be changing that with a focus on merchant (and end user) experience.

For example, today I received an email outlining Square's latest platform enhancements (see first screenshot). The message included an enticing Open for Business with an invitation to watch a 70-second video outlining enhancements to its merchant platform, including built-in rewards capabilities (note 2). 

The company has grown quickly. Basically starting at zero at the beginning of the year, they are now doing up to $11 million per day in card volume. More impressively, they are up to 800,000 merchants. Assuming a $65 to $70 average ticket, that's around 150,000 transactions per day, or 4 to 5 million per month. But that also means the average merchant is only doing 1 transaction every 5 or 6 days. 

imageAnd the user experience is far from perfect. Square has suffered growing pains as it learns to manage a business fraught with fraud and uncertainty. We tried to use Square at Finovate last May and couldn't get transactions authorized, apparently due to tight account limits in force then.

Four months later at FinovateFall, most transactions were authorized, much to the delight of attendees who used it. But unbeknownst to us (note 3), the money just sat in the Square account waiting for us to confirm our bank account. One small test-transaction had been sitting there since May.

Bottom line: The company flat-out does a great job with design and UX, very Apple-esque. I expect to see a lot of innovation out of Square given its funding, valuation, and celebrity founder. The promise of turning transaction receipts into a dynamic communication is especially interesting (previous post).


Email from Square (received 1PM Pacific, 15 Nov 2011)


Landing page (not logged in; link)



image1. It could be that I've simply forgotten messages received years ago. But I can say for sure that there have been very marketing/customer service messages, because I pay attention to them. My acquirer is not one of the major players. 
2. TechCrunch has a good rundown of the new features.
3. In fairness to Square, they did mention on the merchant receipt that we needed to verify the bank account. But during the heat of the conference, I never noticed that. Click on inset to see the company's transaction receipt (highlighting mine).  
4. I wonder what it will take to convince Japan's Square-Enix Holdings, creator of Final Fantasy (video game) to part with the domain name (which is currently unused). 


11/11/11 Promotion at Notre Dame Federal Credit Union

By Jim Bruene on November 11, 2011 11:11 AM | Comments (1)


Today is a big day for number nerds (note 1), as 11/11/11 makes its once-per-century appearance. So last night, I started looking for banks or credit unions using the date for a price promotion (note 2). With U.S. interest rates hovering around the 1% mark, I figured it would be pretty easy to find financial institutions offering CD specials at 1.11% APY, hopefully the 11-month variety.

But after googling for at least an hour, I came up empty. I found a few 1.11% APYs for longer-term CDs, but no one that was promoting it as a Nov 11 special. I was about to give up, but tried "1.11% discount" and up popped Notre Dame Federal Credit Union going all in on the 11/11/11 theme. 

The home page (below) features a huge ad for its 1.11% APR holiday loan of exactly $1,111. And can you guess the term of the loan? Yep, 111 days! Thank you NDFCU marketing dept, you rock.

image Fine print: There is one small catch. To get the loan, members must apply for and be approved for the credit union's Visa Platinum card (presumably you can still get the holiday loan if you already have the CU's card). So it's really a credit card promotion in disguise, but that seems fair. It's a good price, and allows for a little expansion of the holiday budget, but with the discipline of a loan that must be repaid before April tax time (note 3).   

The offer is good through the end of November. And the loan application can be made online.


Notre Dame FCU hits all 1's on its homepage (11 Nov 2011)

Notre Dame FCU hits all 1's on its homepage (11 Nov 2011)

1.11% loan landing page (link)

1.11% loan landing page NDFCU

1. I've been one for a long time. When I got my first calculator, I pressed "+1" on it 111,111 times just to fill the screen with 1s, the hard way.  
image2. Most U.S. financial institutions are closed today for Veterans Day, making it less likely to have a special one-day promotion. 
3.  Members also have the options of rolling the balance onto their NDFCU credit card at the end of the term.
4. Digital clock image from UK's Daily Telegraph which had a 9-hour head start on the day.
5. Other 11/11/11 news:
- NY Times looks at 11/11/11 promotions
- DealerTrack marked the day with a press release about hitting the 1,111 lender milestone.
- The only promotional email I received using the day was from Starwood hotels (see inset)

Comments (1)

Capital One Driving Mobile Use with Sweepstakes

By Jim Bruene on November 9, 2011 5:54 PM | Comments

imageBoosting mobile engagement has a promising ROI. Among other benefits, the potential $6+ saved per displaced call center inquiry can have a meaningful impact on the bottom line (note 1).

And while volumes are growing, Capital One says mobile usage is up 5-fold compared to last year, it's still a lightly used channel compared to phone (voice) and online.

Yet, for a card issuer, mobile is THE most important channel for the NFC/Square/GoogleWallet future.

So it makes a ton of sense to pull out the stops now to get customers using the bank's mobile app. Capital One in particular, as one of the last majors to get into the app store, likely has an awareness problem with mobile cardholders. Even if the CapOne native app was downloaded, it's buried so deep on the iPhone's screens, that users forget about it. In my case, it's on screen number eight and I rarely see it even though I use my card almost every day.

To attract more mobile uptake, the card giant launched a usage sweeps today. Between now and Jan 6, each cardholder will get one sweepstakes entry every day they log in to the mobile app or mobile web (SMS activity does not appear to count). One person will win a 16GB Wifi iPad2 each day. And a grand prize of a Chevy Volt will be awarded at the end (full rules). The total prize package is $80,000, less than the cost of one 30-second spot on an about-to-be-cancelled sitcom. 

The sweeps is being promoted with a small homepage link and a prominent mention on the main mobile banking page (see second screenshot below).


Capital One mobile sweeps landing page (link, 9 Nov 2011)
Note: The call to action, text "power" to 80101, was not working in my test. 
Update 10 Nov: Fixed 



Main mobile banking page (link)

Main mobile banking page Capital One

1. Of course, you also have to put in place a mobile channel strategy that actually does displace call-center inquiries. That's easier said than done. Also, financial institutions paying mobile vendors for each active user, may not want to boost mobile usage in this way. 
2. Despite the name of our subscription newsletter, Online Banking Report, we cover mobile issues almost every month. 


Credit Karma Launches "Hands Free" Account Aggregation

By Jim Bruene on November 7, 2011 5:22 PM | Comments

Everyone likes the idea of an online PFM, but relatively few will take the time to enter the necessary account numbers and passwords. Fewer still will keep it running smoothly by coming back periodically to update passwords, provide security question responses, and so on. That friction means it's not benefiting as many people as it could. 

But Credit Karma removes the friction, at least on the credit side, with its latest feature, My Accounts (see first screenshot below; see fourth screenshot for today's email announcement). The startup parses credit bureau data to automatically present each user with an aggregated look at their debt over time. The service requires ZERO account info from the user, they simply sign up with Credit Karma to get free credit report info.

Historical data is captured each time the user updates their credit info at Credit Karma. Since it's new, there's just a single data point on my account (see second screenshot).

To earn advertising and referral income, Credit Karma integrates card offers into My Accounts with a Recommended Cards tab in the tertiary navigation (third screenshot). Cross selling is also woven into other areas as well (first screenshot). Credit Karma also covers home loans, auto loans, and personal loans. Each has their own tab in the secondary navigation.

The company has 3.5 million registered users and is adding 500,000 every quarter.

Bottom line: Keeping closer tabs on debt has huge benefits for many households. Credit Karma's "no data input" method makes it easier. The last remaining hurdle is integrating the data into online banking so it's not forgotten (see UW Credit Union post).  


Credit Karma "My Accounts" (7 Nov 2011)

Credit Karma "My Accounts"

Balance history is tracked for each card
Note: Only one data point, since this was my first time using the new feature

Balance history is tracked for each card

Integrated offers drive revenue


Email announcement of new feature

Credit Karma's email announcement of My Accounts


Note: We've have written a number of reports on PFM and related issues in our subscription service, Online Banking Report.


RIP Debit Fees: The Winners and Losers

By Jim Bruene on November 2, 2011 4:34 PM | Comments

image The debit card fee debacle was an interesting drama to watch. I'm sure there are lots of lessons here for a future biz school case study. But really, was $5/mo for a service that many consumers use daily, such a big deal that even Obama had to call BofA out? We spend two or three times that each month on extra pizza toppings alone, but I don't see anyone bad mouthing the pepperoni industry.

While it's clear in retrospect that BofA should have played this differently, rolling out the price increase gradually for instance, or upgrading its debit card product at the same time (note 1), the bank was at least being up-front with its pricing and reasons.

And the whole episode is not just a loss for BofA, but for the whole industry, as one its most popular products is turned into a regulated utility with Durbin controlling prices on the merchant side and public opinion squashing fees on the consumer side.    

Here's the winners and losers from BofA's capitulation on debit card fees:


  • Big banks/shareholders: Obviously, the big banks who were all (except Citi) testing various fee options, miss out on added revenues in 2011 and for however long it takes before they implement other less-transparent price increases. And of course, BofA loses the most as it took the brunt of PR damage and now every pricing move it makes will be put under a microscope. 
  • Small banks and credit unions: The $5 fee was a windfall for small FIs in their marketing war against the big banks. Now what's the rallying cry for Bank Transfer Day? (And many small FIs would eventually have hopped on the fee bandwagon once the consumer backlash faded.)
  • Government/taxpayers: The big banks employ millions directly, and millions of other jobs are indirectly supported by banking revenues. If this leads to an industry-wide layoff (note 2), it could add hundreds of thousands to the unemployment roles just in time for the 2012 elections. And the whole anti-bank rhetoric from Congress and the Administration, along with the implied threat of more price controls, makes it harder for banks to raise capital, weakening an already fragile ecosystem. Does anyone really want to risk a repeat of 2008?


  • Merchants: Widespread debit card fees would likely have caused a reduction in their use and a corresponding increase in the use of cash, checks and credit cards which would have driven merchant costs up.


  • Consumers: Short-term it's a win. The grass-roots victory feels good and avoiding the $3 to $5 monthly fee is nice (it just about covers that Netflix price you can keep getting the DVDs in the mail). But longer-term, it's probably a wash. Banks need to improve revenues, or they will either have to cut services, lay off employees, and/or find sneakier ways to raise prices ($40 overdrafts anyone?).


1. We recently looked at optional fee-based services banks could build using remote banking value-adds. See our May 2011 Online Banking Report (subscription). 
2. I'm not predicting layoffs. Honestly, I have no idea. There are way too many factors at play to make a direct connection. But certainly, the one-two punch of interchange price controls combined with the fee backlash, make cost cutting seem the more palatable course of action to improve profits. And to the extent that smaller players pick up incremental business, they could hire a good chunk of those laid off.


BillGuard's Monthly Credit/Debit Card Scan Report

By Jim Bruene on October 5, 2011 5:32 PM | Comments

image We've been impressed with BillGuard since we first learned about it earlier this year. And they wowed the crowd at Finovate two weeks ago with a great demo, dynamic presentation and more importantly, a product that resonates with consumers across many demographic segments.

One great thing about becoming a trusted consumer watchdog, like identity theft monitoring services, is that your monthly emails are actually read by customers. And unlike FICO scores which usually don't fluctuate that much month-over-month, there's usually something new to look at when BillGuard scans a month's worth of card transactions looking for oddities.

For example, my scan for September across two credit card accounts showed the following activity (see first screenshot below):

  • Green: 61 transactions that were identifiable as "normal" activity
  • Orange: 2 transactions that were "unknown"
  • Red: None were flagged red indicating suspected fraud

Clicking through to the website, I can mark legitimate transaction "OK" and that information is fed back to the network and disseminated to other via the Merchant Transaction Reliability score (see second screenshot). 

Bottom line: This is the kind of value-added service that FIs could bundle with other products, even a debit card for example, that could help justify a monthly fee. $5 perhaps? 
(Note: BillGuard is currently offering free of charge to expand the customer base.)


1. BillGuard emails a monthly Scan Report to customers (4 Oct 2011)

BillGuard monthly transaction scan report

2. At the BillGuard website, each merchant's score across all users is tracked
Note: Apparently, 17 BillGuard customers are using Quickbooks Online and none have flagged the transaction (which makes sense)

BillGuard Merchant Transaction Reliability score


Capital One Pays to Play in Zynga's Virtual Worlds

By Jim Bruene on September 28, 2011 8:11 PM | Comments

imageLike most, I've been amazed at how fast Zynga was able to build a 250+ million user base for its social games. But I'd never actually played one.

Until now. So make that 250 million and one users, because I couldn't resist checking up on Capital One's new product placement in three Zynga games (more on what players could do). The bank's Facebook page, which has grown to 2.3 million likes, has details on the promotions (screenshot 1).

image Although, it appears I may have missed my chance to interact with the CapOne goat, Visigoth statute or a virtual branch (the promo only ran one week), there are still credit card ads and mystery gifts available, at least in Farmville, the only game I tested.

Capital One viral gift & banner ads
Capital One may have ended the in-game elements for now, but they still have a presence in the game. Starting Farmville for the first time, I was greeted by a number of social elements, one of which is sending a Capital One gift (screenshot 2). There is no indication of what the gift actually is. Maybe that's part of the fun, but it seems like a weakness to me. Am I sending someone a virtual goat or a solicitation for a CapOne card (mystery solved)? 

The company is also running banner ads within the game (screenshots 5 & 6). Clicking on them takes users to the usual Capital One pre-approval page within a separate browser window (screenshot 7). Once you land on the CapOne site there is no mention of Farmville.

Discover Card & Citibank bonus offers
Game players are encouraged to buy all kinds of virtual goods. They can earn virtual currency in a number of ways, including using real world cash to buy credits. But users can also earn currency by participating in sponsored activities.

Both Citi and Discover are offering users virtual cash to apply, and be approved, for a credit card. Discover is offering virtual currency worth about $75 and Citi is handing out about $50.

My take: With 250 million users, the large brands owe it to their shareholders to see if they can make hay in Farmville and any other popular virtual world. And I suspect there will be a positive ROI for the right mix of promotion/offer. I have no idea what the magic formula is, but you know the direct marketing wizards at CapOne, Citi and the others will figure it out sooner rather than later (note 1).


1. Capital One Facebook page (27 Sep 2011)

1. Capital One Facebook page

2. Capital One "free gift" in Farmville (27 Sep 2011)

Capital One "free gift" in Farmville (27 Sep 2011)

3. Choose friends you want to receive the gift

2. Choose friends you want to send the gift to

4. Before you send the gift, you have the opportunity to see what the notice looks like to the recipient, and you can add a personal note

3. Before you send the gift, you have the opportunity to see what the notice looks like to the recipient, and you can add a personal note

5. When I got back to the game, there was a large Capital One banner
Note: Starbucks promotion in lower right

4. When I got back to the game, there was a large Capital One banner

6. Another Capital One banner ad served while playing Farmville
Note: Bank of Internet ad on right

5. Another Capital One banner ad served while playing Farmville

7. The banner ad in Farmville, led to Capital One's usual pre-qualification form

6. The banner ad in Farmville, led to Capital One's usual pre-qualification form

8. Discover Card and Citibank have powerful offers in the "earn cash" area.
Note: Discover offers 475 Farm Cash (worth about $75) for card approval, Citibank 300 (about $50). 


9. The first screen after choosing Discover's offer

7. Discover Card and Citibank have more powerful offers, though it's buried in the "earn cash" area. Discover offers 475 Farm Cash (worth about $75) for card approval, Citibank 300 (about $50).

10. Clicking Continue above leads to standard Discover Card app (in new browser window)

8. Clicking Continue above leads to standard Discover Card app (in new browser window)


Note: If you are interested in a fictional look at where the commercialization of Internet gaming is headed, I highly recommend Cory Doctorow's For the Win.


Reviewed: The American Express Gift Card Store and its New eGift Card Option

By Jim Bruene on September 8, 2011 6:34 PM | Comments

imageThe banking website is a unique animal. Part account management. Part service. Part sales. Part consumer. Part business. And it all must pass muster with the CEO, IT, marketing, customer support, heads of business lines, the board, and about 2,000 regulatory agencies. It's no wonder that it can be difficult to keep up with ecommerce Web-design standards. 

When I started this post, the intent was to show how American Express had overcome typical banking shortfalls and was doing ecommerce right. I liked what I saw at first glance. But after diving in and actually using the gift card site, I have to say that the company still has quite a ways to go to equal, or even Etsy.

My take: Overall, it's a good structure for selling gift cards. But there are a number of things to clean up, mostly in the purchasing and fulfillment process. And the mobile option didn't work at all, at least on the iPhone 4. For now, I'll give it a B+ for layout/design and a C- for execution.

Let's start with the good parts:

  • New virtual gift card costs $1 less ($2.95), has no shipping charges (which range from $2 to $8.95 per order), and can be emailed in near real-time
  • Option to create a "gift card account" to save payment info and make purchasing into a "1-click" process (only available to AmEx cardholders though)
  • Easy to find business or personal options by choosing the correct tab near the top
  • Shopping process uses cart system to order multiple designs and denominations
  • Ability to shop for cards for specific occasions (birthday, wedding, etc.)
  • Signup for email offers (bottom of main page)
  • Mobile shopping link to open a mobile-optimized site (bottom of page...which actually didn't work on my iPhone 4, see below)
  • Personalization options including uploaded photos and recipient name embossed on card
  • Click-to-call (powered by Oracle) offered when arriving via Google AdWords ad
  • Link to purchase gift cards with Membership Rewards points
  • Unlimited next-day shipping option. Pay $99, and for the next year, all gift cards will be delivered for no charge via next-day shipping
  • Link to buy Gift Cheques for old-school users

What needs to be improved:

  • Inconsistent fee disclosure: Although the site discloses the $2.95 to $6.95 processing fee as items are selected, this fee is NOT shown in the cart totals before checkout. And I couldn't find an answer on the site to the simple question I had: Is it $3.95 per card or per order?  
  • Card terms not explained: There is lots of confusion in the gift card market about expiration dates, monthly fees and such. In the traditional plastic gift-card area, AmEx does virtually nothing to help users understand what they are buying; however, it's new virtual gift card is explained well.
  • Lack of direct customer service: When navigating to the site through organic search, there is no way to get a quick question answered via live chat or email. Users must follow the Contact Us link in the upper right to find contact info.
  • Obtrusive banners: The banner section (in upper left) is too large for a focused microsite and distracts from the task at hand. And one of the three is way off topic, touting an AmEx award from PayBefore for the "Best Web Sales Channel." That has absolutely zero interest to buyers and is one of the odder banner ads I've ever seen run on a major financial website (although I expect AmEx tested it and found some sales lift). 
  • Clunky checkout process: The form-design itself is adequate, but is missing a few features such as an immediate error message if you type in a dollar amount that does not work. I also found myself clicking Continue at the bottom of the page which won't work until you first press Add to Cart.
  • Slow website: I tested the site several times over a two-day period and consistently had trouble completing an order. Without more research, I don't know if it's an AmEx issue or just unfortunate timing on my part; in either case, it was pretty frustrating. 
  • Too many navigation options: The top of the gift card page contains AmEx's normal page navigation options: My Account | Cards | Travel | Rewards | Business
    While those are helpful for cardholders looking to access other services, they distract from the task at hand, selecting a gift card(s). 
  • Boring gift card email (screenshot #3): The email went out right away and there was nothing technically wrong with it. But I would have expected a little more excitement and design pizzazz. After all, it's not every day that someone sends you real money. Also, I was really surprised that the email did not contain the amount of the gift card or the personal message that I composed. That info eventually shows up during the activation process.
  • Bizarre activation screen using Google Chrome for PC (screenshot 4): At first the page came up with a congratulations message, and an error message, even though I hadn't completed the authentication step of entering the captcha info. However, after the page fully loaded, all the extraneous messages disappeared. Also, it looked fine on Chrome on my Mac (I didn't test other browsers).
  • Virtual card itself is a "low-tech" PDF (screenshot 5): I'm not sure what I was expecting at the end of the process, but having a PDF version of my virtual gift card seems anti-climactic. And the PDF popup (again in Chrome) doesn't have the usual save/print function along the top, so initially I was stuck as to how I would remember the card info to actually use it. By accident, I found that if I moved my mouse over the lower right part of the popup, that the print/save functions all of a sudden appeared as floating controls. It would be a whole lot better for the user if the card info was simply contained in the original email or if you could at least email the info to yourself after activation. I think a lot of these cards are going to end up lost as PDF files on the hard drive, the modern equivalent of the old paper travelers cheque being socked away in a drawer for decades.
  • Mobile site was unusable (unless logged in): On the online site, there's a link promoting mobile ordering of gift cards by navigating to <> on their phone. I manually entered that URL in my iPhone 4 and was taken to a site dominated by a login screen (screenshot 6). There is a link to gift cards below the fold, but pressing it just reloaded the same page (evidently you have to log in first). This was a total mobile fail.


1. American Express Gift Card landing page <> (8 Sept. 2011)

1. American Express Gift Card landing page <>

2. Personalized photo gift card order form
Note: Shipping fees are disclosed at the bottom, and the purchase fee pops up after you select a dollar amount.

Anex Personalized photo gift card order form

3. Recipient email notification they've received an eGift Card

3. Email to recipient of American Express eGift Card

4. Activation process starts with a bizarre screen that eventually renders correctly, but not before thoroughly confusing the user
Note: Eventually the lower half of this screen disappeared and only the top activation portion remained

4. Activation process started with a bizarre screen

5. The virtual card is downloaded as a PDF which can be printed or saved by the recipient

5. The virtual card is downloaded as a PDF which can be printed or saved by the recipient

6. The American Express "Gift Card site" as seen through an iPhone 4

6. The American Express "Gift Card site" as seen through an iPhone 4


Out of the Inbox: Discover Card's Birthday Present

By Jim Bruene on August 18, 2011 4:27 PM | Comments (2)

Although worth only $5 at most, Discover Card's month-long Double Cashback Bonus (on the first $500 spent) sure sounds impressive. And combined with the cute penguin visuals, it's an effective birthday greeting. And probably the first one you'll get since it's sent two weeks in advance of the first day of the month of your birthday.

Recipients must register to receive the bonus, a common technique to keep costs down. The card issuer continues to display dazzling graphics throughout and even sends a confirmation email (below). Great attention to detail.

It would be nice if you didn't have to do a full login to register. But for extra reward points, most users will put up with the hassle.

Grade = A-

Discover Card birthday email (18 Aug. 2011, 2 weeks in advance of the birthday month)

Discover Card birthday email (18 Aug 2011)

First landing page: Log in (link)

Discover landing page

Second landing page: Register (link, must be logged in to your Discover account)

Second landing page: Register

Confirmation screen


Confirmation email


Comments (2)

Notifying Card Issuers that You Are Out of the Country

By Jim Bruene on August 17, 2011 6:02 PM | Comments (3)

image We were lucky enough to take a quick trip to Europe this summer and one of the many rituals of modern travel is convincing your card issuers not to block international transactions. The conventional wisdom is to notify issuers in advance. While not an absolute necessity, it is said to improve your odds.

The process is very straightforward. All the bank needs is your travel dates and where you are visiting. However, it is tedious over the phone due to redundant authentication requirements.

Consequently, it's an ideal service to automate with online, or even better, mobile form. I wrote about it the last time I traveled. But this time I put a clock on the process, just to see exactly how much time was wasted, for both the consumer and bank, on the phone. 

Summary: It took about 1 minute per card to register online at Capital One and Chase. Over the phone, it took 6.5 minutes at Wells Fargo and 9.5 at U.S. Bank. No one has it in their mobile app yet (see details below).   

I realize that online travel notifications are not a high priority these days. But, it's such a win-win service, I wish more banks offered it. However, the real end game is to build automatic location notification into mobile-banking apps. Even if customers won't agree to being tracked 24/7, there could be a button in the app that users press to submit their GPS location whenever they land in a new city or country. 

That gives customers total control, but makes it super easy for them to communicate. And it gives you a highly  secure method of knowing your customers are in the same location as their card. 

Capital One: Online -- 2 minutes to register 2 cards (see screenshots in previous post)

Luckily, Capital One, my go-to card abroad with no international transaction fee, has an online form to do this. It's not easy to find, but I'd written about it before so I knew roughly where to look. The form is a little convoluted; if traveling to multiple countries, you have to keep pressing "add another destination," but it took less than a minute to add the five countries were we passing through.

I have Capital One personal and business cards which are integrated into the same online banking platform. But unfortunately, you have to do each card separately, so total time expended, including login, was about 2 minutes.

Capital One gets extra credit for sending me an email on my scheduled departure day asking me whether I needed anything and providing their international call-center instructions. _________________________________________________________________________________

Chase Bank: Online -- less than 1 minute for 2 cards (see screenshot in previous post)

I couldn't remember whether Chase had an online option, so I logged in, didn't see it on the right-hand column of common links. So I went to customer service and found it on the list of available tasks. The form was super-easy; I could do both of my cards at once and just free-form input the countries. Total form-completion time was under 10 seconds, but if counting login and function-search, it took just under a minute. __________________________________________________________________________________

U.S. Bank: Phone: 9.5 minutes on phone + 2 minutes searching online for 1 debit card (with 2 different account numbers)

I first checked online to see if travel notifications had been added since the last time I checked. No such luck, so about 2 minutes were wasted. Because we needed ATM access abroad, we had to have this card working, so I reluctantly called the 800 number on a Friday evening, and was told that wait times were approx 4 minutes. I think they were only half that, but it still took me a full 9.5 minutes to get my ATM cards registered. About one minute of that was spent finding my wife's debit card, which I now know has a different number than mine.

Why the agent couldn't handle both ATM cards from a joint account without needing the other number is beyond me, but he insisted.

Total time expended was 2 minutes online and 9.5 on the phone: 11.5 minutes total.

Extra credit goes to the U.S. Bank agent who activated my new debit card that had recently come in the mail. My old card would have expired during the trip.  

Wells Fargo: Phone: 6.5 minutes on the phone + 2 minutes searching online for 1 card

My wife carries a Wells card at all times, so usually she handles travel notifications. But since I was already on a roll, I took on the task. Although I didn't recall ever seeing it, I assumed Wells would have an online option, but after a search of the site, I found that my hunch was wrong and that I'd wasted a few minutes.

I called the 800 number and was able to complete the process in about 6.5 minutes. Much of that time was spent listening to menu choices and current balance info (which I didn't want). Had I known how to skip through the menus, it would have taken only about 3 minutes. The agent was friendly and efficient, although she twice asked if she could also activate my debit card even though I don't have a checking account there. But I appreciate that she was trying to be thorough. ___________________________________________________________________________________

Bank of America: Phone -- 2 minutes, 0 cards

I was going to take my Bank of America card along, but after searching customer service I could not find an online form to complete, so I decided to leave it at home. Score 1 for the more online-savvy approach at its competitors.

Comments (3) Shoppers Prompted to Select Discover Card as Default Payment Option, with a $1 Million Carrot

By Jim Bruene on August 12, 2011 5:34 PM | Comments

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

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

A chance to win $1 million every time you pay

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


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

 Discover Card's $1 million promotion on

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



Bank of America Sponsoring Free Wi-Fi for Smartphones on Alaska Airlines Flights

By Jim Bruene on August 9, 2011 6:34 PM | Comments (1)

imageA few days ago I was on a Chicago-Seattle flight on Alaska Airlines and was surprised to hear an overhead announcement about Bank of America sponsoring free wi-fi on the flight. But it came with a catch, the free access applied only to smartphones (notes 1, 2).

While I'm a big user of airborne wi-fi on my laptop, there isn't much I want to do on a smartphone connection at 35,000 feet. But my curiosity got the best of me, so I gave it a shot and found the free connection was delivered as promised. I had simply to type in my email address, agree to the terms and conditions, and hit the big blue button (see first screenshot).

It didn't take me long to figure out why BofA was being so generous. The second page of the sign-on process included a full-page ad for the bank's Alaska Airlines affinity card (see second screenshot).

My take: Sponsored wi-fi is an effective way to reach the lucrative smartphone-carrying market. But the credit card application user experience was flawed. The bank dumps the whole app and disclosures onto a single mobile webpage, which required scrolling down about eight screens' worth of info (see screenshots 3, 4, and 5). And the fonts were way too small to engage most users.

If BofA were to build a proper mobile-optimized credit card application form, they'd likely increase app volume two- to three-fold. In the meantime, the bank should add an option for the user to request a full-sized app to be completed later on their laptop. 

1. First screen of free wi-fi promotion on Alaska Airlines (7 Aug. 2011)

1. First screen of free wi-fi promotion on Alaska Airlines

2. BofA credit card solicitation on page 2 of the login process

2. BofA credit card solicitation on page 2 of the login process

3, 4, 5: The rest of the mobile application (click to enlarge)
Note: This shows only the beginning of the disclosures; the full text ran several more screens down the page.

image  image  image


1. I didn't test it, but I assume it would have been free on the iPad as well.
2. I believe they said the offer would continue through the month of August.

Comments (1)

Finally, a Facebook Credit Card Connection to Really Like (Thanks American Express)

By Jim Bruene on July 26, 2011 1:34 PM | Comments

image Since Facebook became the de facto social operating system a year or two ago, I've been a little surprised the financial powers haven't jumped on board more aggressively (note 1). But the card companies have had their hands full dealing with the credit meltdown, so it's understandable.

But now that "big cards" are moving forward again, we'll see a burst of activity leveraging Facebook and other social networks during 2012 and beyond (note 2).

Link, Like, Love from American Express  is a great example of what's to come.

Here's how it works (1 thru 5 illustrated in screenshots below):

  • Step 1: Go to the American Express Facebook page
  • Step 2: Add "Link. Like. Love." to your Facebook profile
  • Step 3: Link your AmEx card to the app
  • Step 4: Sign up for offers you like
  • Step 5: Visit the merchant (whenever you like) and pay with your AmEx card
  • Step 6: The discount will automatically appear as a statement credit on your card



The AmEx program is very similar to bankcard-based, merchant-funded rewards, except for one huge difference. Instead of "liking the offer" during infrequent visits to your bank/card statement, you do it while on Facebook, which the typical user visits approximately a zillion times more than their bank (note 3).

MasterCard/Visa issuers will follow the same path, but AmEx bagged a ton of free publicity along with the first 2 million users. Like it, a lot.

Step 1: Visit American Express Facebook page
Note: 2 million "likes" (note 4)

Step 1: Visit American Express Facebook page

Step 2: Add the AmEx app

Step 2: Add the AmEx app

Step 3: Link card

Step 3: Link American Express card to Facebook

Step 3a: Complete form on AmEx webpage

Step 3a: Complete form on AmEx webpage

Step 3b: Share with friends (optional)

Step 4: Share with friends (optional)

Step 4: Activate offers with two clicks

Step 5: Activate Amex offers with single click

Step 4a: Confirm

Step 5a: Confirm

Step 4b: More optional sharing

Step 6: More sharing (optional)

Final: Offer now shows "Added"

Final: Offer now shows "Added"


1. Chase had the first "1+ million likes" financial promotion in early 2010 with its brilliant Community Giving program
2. We'll see some great Facebook integration at FinvoateFall in two months. 
3. Presumably, I'll be getting all kinds of Facebook and/or email messages from AmEx; although 2 hours post-signup, nothing was in either inbox.
4. During the 2 hours or so (4 to 6 PM Pacific) that elapsed while I was working on this post, the number of likes increased by more than 300. That translates to 3,000+ per day, or close to 100,000 per month. I don't know how many likes AmEx had when the program launched, but it sounds like reasonable traction.


Chase Bank Offers 0% Balance Transfer and Easy Online Transfer

By Jim Bruene on August 4, 2011 3:52 PM | Comments

(Ed. note: The original promotion shown below was made by Chase in early April, right before U.S. income taxes were due. But the bank is still offering similar balance-transfer options, as outlined below).

imageWhen I logged in to my Chase credit card account, I was greeted with an imageattractive interstitial ad promising to save me money if I transferred a credit balance to the bank (see Figure 1).

The bank offers two or three choices of terms and rates. Obviously, you can't beat 0%, but evidently some customers prefer to lock in a lower rate longer. Last week, we had the following choices:

  • 0% for 11 months (thru June 2012)
  • 1.99% for 17 months (thru Dec. 2012)
  • 5.99% for 22 months (thru May 2013)

Each choice also required an immediate 1% fee on the transferred amount (note 1).  


The interstitial ad grabs your attention and the pricing is aggressive, so I expect Chase is getting good takeup. More interesting to me is the actual online transfer process which appeared flawless, though I didn't actually move any money. My only major criticism is that the prices are a little hard to find, especially the transfer fee.

It's a great offer and lets the customers see the total price right away. Overall, I give it an A-.


  • Great, eye-catching graphics
  • Copy is very concise, passing the 25-word "Google homepage" mark
  • Clear benefit, "save/saving" used twice in the 15-word ad
  • Clicking through leads directly to the transfer page where users can accept the offer (see Figure 2 and 3)

Not so great:

     On interstitial ad (Figure #1):

  • Not super clear where to click to take advantage of savings
  • The actual value of the "Great low rate" is not disclosed until after you click-through to transfer page (second screenshot)
  • The laptop graphic image is not particularly interesting

    On the transfer page (Figure #2), :

  • Two choices are virtually identical (0% though Feb. 2012 or 0% through March 2012) and one that's clearly less appealing (2.99% through Aug. 2012).
  • There is no specific disclosure on the first page of the transfer fee (which I believe is 4%), just the famous "additional terms apply" (the fee comes in step 3, Figure 5)

Recent offers: On my original April 1 test (Figure 1 & 2), I didn't go through the entire process. So I went back last week to see when Chase discloses the transfer fee. The user is told about the 1% transfer fee (see note 1) during the second step (Figure 5) when they are asked to agree to terms and conditions. The go-to rate after is also listed.

Figure 1: Chase interstitial ad at credit card login (1 April 2011, 8 PM Pacific)

Chase login ad

Figure 2: Landing page to begin balance-transfer process (1 April 2011)

Landing page after login

Retesting the service
(21 July 2011; 10 PM Pacific)
Figure 3: Step 1 -- Select an offer

Step 1: Chase credit card balance transfer process

Figure 4: Step 2 -- Enter transfer details (card number and amount)

Step 2: Chase credit card balance transfer process

Figure 5: Step 3 -- Agree to the terms and conditions

Step 3: Chase credit card balance transfer process


1. Chase's 1% transfer fee is much lower than the 4% seen in most other offers. The bank should highlight that number since it's a selling point.


Is Prepaid the Durbin Antidote?

By Jim Bruene on June 22, 2011 6:00 AM | Comments

image Prepaid cards have been a bit of an afterthought for most banks and card issuers. Sure, they make the occasional appearance on banking sites in December as holiday gifts. But mainstream they are not.

But that was before traditional debit cards suddenly became unprofitable (note 1) thanks to the upcoming U.S. debit interchange price controls (see Durbin rant, note 2) combined with with last year's reining in of overdraft fees.

It's pretty easy to predict what happens next. Banks will do what any business would do when offering a popular, yet unprofitable product. Raise prices with new monthly/annual/transaction fees. And for customers that are fee adverse, banks will offer two alternatives:

  • Credit cards for the credit worthy
  • Prepaid cards for everyone else

Bottom line: Prepaid bankcards are about to become much more popular. Here's why:

  • More interchange revenue to the issuer
  • Easier to sell online with fewer risk management and compliance issues
  • Great entry product for teens and pre-teens
  • Porting the prepaid "card" into mobile phones and other contactless form factors
  • Valuable service for underbanked segments
  • More utility: can be gifted, used for traveling, used to deliver allowance, and so on



1. The price controls apply only to banks of $10 billion or more.
2. I am really disappointed in the Durbin interchange price controls. I was sure Congress would delay the matter, but unfortunately I was wrong. My feeling is that price controls are an absolute last resort when there is not enough competition to create a free market price. I don't think that was the case with debit interchange.

Long-term, the whole exercise is a zero-sum game for the businesses, merchants and banks, who will adjust their prices to cover costs and ensure a normal profit. The only likely loser is the consumer who will be deprived of innovations killed off by the dramatic shift in interchange.

Here's my scorecard of the post-Durbin winners and losers: 

Short-term winners:

  • Merchants, obviously
  • Prepaid card issuers (which are not covered by Durbin price controls)
  • Consultants, lawyers, marketers and professional services firms involved in drafting and communicating new bank prices and policies 
  • Financial institutions exempted from Durbin (under $10 billion) could pick up share and/or be able to gain fee revenue by matching the large bank price increases

Short-term losers:

  • Large banks will see revenue declines until they can get new fees introduced and move transactions to credit/prepaid
  • Consumers who will see fee increases from banks faster than they'll see price decreases from merchants
  • Payment startups and business consortiums whose business model was predicated on disrupting debit

Long-term unchanged:

  • Merchants who will eventually pass on the interchange savings due to price competition
  • Banks who will make up the revenue loss with new fees and/or by channeling transactions to higher-margin products
  • Consumers who will pay more in bank fees but less for goods and services, an overall wash

Chase Bank's Jot App Shows the Future of Mobile Transaction Processing

By Jim Bruene on June 8, 2011 7:54 PM | Comments (2)

image image I've been waiting for something like Chase Bank's Jot (see note 1). It's part of the "second wave" of mobile apps that demonstrate why mobile banking will soon be better than online banking.

Mobile banking phase 1: 2008 through 2011

Mobile's first wave was all about porting the most-used online functions, balance inquiry and statement viewing, to a smaller screen. That was convenient for smartphone owners on the go, but it didn't add much to the overall user experience. 

The test of whether you've nailed the mobile UX is if that even if you are within arm's reach of your laptop, you still pick up the mobile to perform a function. Most mobile banking systems fail that test, i.e. you only use mobile banking when online access is inconvenient or insecure.

Mobile banking phase 2: 2011+

The second wave is much more interesting. Your mobile phone can do financial chores that simply cannot be accomplished online, for example:

  • Deposit a paper check via mobile camera (USAA, Chase, PayPal and many more)
  • Transfer money to your friend by "bumping" phones (PayPal, ING Direct)
  • Alert you to special merchant offers in your exact location that are redeemable simply by using your bankcard (BankOns)
  • Pay your bill automatically by scanning the billing statement (Mitek)
  • Upload paper receipts and append them to expense reports (Expensify)

And the latest addition to that list:

  • Receive feed of transactions and tag them with categories for future reference and reporting (Chase Jot)


How Jot works

Chase's new app (announced 1 June 2011) may not be as cool as remotely depositing a check, but it's much more useful for most cardholders. The iPhone and Android app, which is currently available only for the bank's Ink business credit card, sends push notifications of each transaction (see inset) and enables users to (relatively) quickly append transactions with category information, i.e. "tag" transactions. 

image One key Jot feature, missing in most mobile banking services, is a running list of the transactions waiting to be tagged (see right).

That way, when the business owner has a few spare moments, they can quickly get caught up with their categorizing work. This ongoing attention will reduce the quarterly game of "what's that transaction" played when finalizing the company books.

So not only does Jot save time, it potentially improves the quality of the accounting data, always a good thing for business management. 

The app also includes other business credit card management functions such as basic reports by tag, the ability to change employee credit limits, and info on outstanding balances and payment due dates.

While the functionality is still pretty basic (e.g., there is no way to add more than one tag to a transaction), there are only 60 days of transactions available, and login needs to be simplified, overall Jot is a winner. We are tagging it with an A-.


1. The Jot landing page is well done and includes a series of four short demo videos.
2. For OBR subscribers, see our previous Online Banking Reports on mobile banking and payments.

Comments (2)

Launching: BillGuard's "Anti-virus for Credit Cards"

By Jim Bruene on May 26, 2011 8:25 PM | Comments

imageFintech made a good showing at TechCrunch's semi-annual Disrupt conference in NYC. Of 32 startups that launched on stage, three were financial-related:

And both InvoiceASAP and BillGuard (discussed below) were selected to come back on the third day and compete, along with four other startups, for the top prize in front of an all-star panel of judges. The judges selected BillGuard runner-up behind GetAround, a clever peer-to-peer car rental service which wowed the crowd, also taking home the People's Choice award. _____________________________________________________________________________

BillGuard overview

The TechCrunch judges and analysts went gaga over BillGuard. Everyone wanted to use the service, and most wanted to invest in the company.

However, the company recently landed a $3 million Series A round (February 2011), so they'll have to wait. Investors include: Bessemer Venture Partners, Chris Dixon, Ron Conway, IA Ventures, Howard Lindzon and Yaron Galai. The Israeli company has 12 employees. The founders are Yaron Samid, CEO, and Raphael Ouzan, CTO.

Currently, BillGuard is free for the first card and can be upgraded to monitor an unlimited number of cards for $4/mo, a classic freemium model.

In the two days following the company's Monday launch, users added 10,000 cards to the alerting service. In the initial scans, looking back through 30 days of transactions, the company identified potential nuisance charges on 20% of the cards analyzed. The flagged transactions ranged in value from $2 to $6,000 with the latter described as "fraud on a very wealthy person's card." ______________________________________________________________________________

How it works

1. Register at the site with just your email address and ZIP code

2. Enter your username and password for a credit card account into the Yodlee-powered aggregation engine

3. The past 30 days of transactions are immediately downloaded and analyzed for potentially fraudulent or unwanted charges (see screenshot 2)

4. Charges are color-coded by risk assessment (green = good, orange = review, red = flagged) (see screenshot 3). Much like anti-virus companies, BillGuard relies on its user base (crowdsourcing) to identify nuisance and fraudulent charges.

5. You can quickly call up the "reviewable" transactions and choose to mark them "good" or wait for more information on the merchant from BillGuard and its user base (screenshot _______________________________________________________________________________


In my case, the service did not find any bad transactions in the 85 it reviewed from my primary business and personal credit cards. All seven marked "unsure" were fine. None were flagged red.

But according to the company, the average American loses $300 per year in unwanted charges, and I'm way over that. Just last year, I lost more than $1,000 because I had the wrong plan on my mobile phone. But that was a legitimate charge from an existing merchant of mine. BillGuard doesn't guard against stupidity, yet, but it wouldn't take a whole lot more intelligence to start flagging this type of out-of-bounds charge as well.

The potential for financial safeguard services is huge. Just look at the multi-billion credit-monitoring industry, or for that matter which alerts users to bank fees and keeps a running total. The question isn't whether consumers want this type of protection, certainly they do. The issue is whether anyone will take the time to set up the service, pay for it, and then take the time to monitor their accounts.

BillGuard knows that and is actively pursuing deals with large banks to package the service into online banking. In its Monday demo, the company said it was in talks with three top-ten banks (on Wednesday they said, "Make that 4").

Distributing BillGuard would be a mixed blessing for banks. Earlier detection of fraud would be useful, but the labor involved in working through increased dispute resolution, especially false positives, would have to be factored in. But again, BillGuard understands the dilemma and is developing dispute-resolution capabilities that will SAVE issuers time and money.

I predict we'll be seeing a lot more from this company so keep them on your radar. I know we will.  


1. Welcome screen after first download & scan (26 May 2011)

Billguard Welcome screen after first download & scan

2. Initial scan results with 7 transactions marked "review"

 2. Initial scan results with 7 transactions marked "review"

3. Transactions are color-coded by risk assessment

BillGuard Transactions are color-coded by risk assessment

4. The transaction review page

BillGuard transaction review page

5. TechCrunch finalist demo (click to watch on TechCrunch site; )



Note: For more on online personal financial management (OFM/PFM), see our Online Banking Report.


New Online Banking Report Published: Merchant-Funded Rewards Programs

By Jim Bruene on March 1, 2011 12:25 PM | Comments

image While I like a deal as much as the next person (note 1), I've never been much of a coupon clipper. To me, coupons are a hassle to collect, impossible to organize, and mildly embarrassing to redeem. 

But I love frequent flyer miles. Once registered, they pile up automatically, are maintained at the airline or card site, and there is no stigma to redeeming them. However, miles are pretty worthless unless you spend a lot and have the flexibility to use them during the off season.

That's why financial rewards programs have moved away from a sole reliance on airline miles and towards broader programs with cash and merchandise rewards. However, with falling fee revenues, especially interchange, these programs are becoming harder to justify cost-wise.

But customers have grown to expect them, especially the big-spending households that drive banking and card profits (note 3). And this is not a time when you want to irritate a lucrative segment of your customer base.

What to do?

imageEnter a new breed of loyalty program called "merchant-funded rewards." Instead of financial institutions buying goods and services to give away, the system is turned around. Merchants pay direct cash rebates to your customers. And they may even pay you for the privilege of giving away money.

The catch? Because the cash-back offers are targeted to customers who shop at the competition, merchants need actual cardholder-level spending data to make the right offer, e.g., a $25 rebate offer to Home Depot customers who come to Lowes and spend at least $50 on your card (note 2). And to boost awareness, they need to plug directly into your online banking and statements. 

Making this work takes sophisticated integration between spending data and merchant offers. Enter an important new vendor in the banking world: the rewards service provider. In the report, we look at the five biggest, each with 100 or more financial institution clients:

  • Access Development
  • Affinity Solutions
  • Cardlytics
  • Cartera Commerce (recently merged with Vesdia)
  • RewardsNow

While these companies have the early lead, clever newcomers are creating their own hybrid programs connecting APIs with ad-serving and social networks. It's a wide-open field with dozens of players, including Finovate alums Billeo, BillShrink, Micronotes, and Segmint as well as others such as Clovr Media, DBG Loyalty, EDO Interactive, and OffermaticMasterCard and Visa also have rewards programs that issuers can plug in to.


About the report

Merchant-Funded Rewards Programs (link)
Rewards 2.0: Turning a money pit into a profit center

Author: Daniel Thomas, principal consultant, Mindful Insights

Editor: Jim Bruene, editor & founder, Online Banking Report

Published: 28 Feb. 2011

Length: 32 pages

Cost: No extra charge for OBR subscribers, $495 for everyone else (here)


1. Probably more, as the son of a frugal Iowan (thanks Dad!)
2. Of course, private cardholder data is not revealed to merchants or service providers. It's done through computer matching programs.
3. According to COLLOQUY, the average U.S. household is enrolled in 18 rewards programs, and nearly a quarter of those are financial.


Discover Card Pushes Paperless with $30k Sweeps after Login

By Jim Bruene on February 16, 2011 1:53 PM | Comments

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

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

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

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

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

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

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

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

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

Landing page

Discover card paperless statement signup

Confirmation screen

Discover Card confirmation after signing up for paperless statements

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

Discover Card prompts to complete profile

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


American Express Wants to Power Your iTunes Purchases

By Jim Bruene on February 15, 2011 4:05 PM | Comments (1)

image How much does the average American Express cardholder spend in the iTunes store each month? A lot. And how often do you go to iTunes and change your default card? Never. Is it worth $5 to have your card powering an iTunes account? To American Express it is.

I'm sure the card company's spreadsheet shows a payback within a year or two on incremental interchange alone. But more important is the added stickiness these frequent Apple purchases give to the card. Plus, it can't hurt to associate your brand with the most valuable tech company on the planet.  

The fine print
To earn the five-song credit, cardholders must make a purchase with their Amex card between Feb. 10 and March 15. That earns a statement credit equal to five song downloads. It doesn't say which song price-point is used in the calculation, but I'm guessing the standard $0.99.

Relevance to Netbankers
It's always good business to get your card installed as an automatic payment source. Interchange goes up, credit card receivables improve, and you've added one more electronic hook to the account. So consider taking a similar approach and offering a small bounty after your card is used with a new biller.

iTunes promo on main Amex account page (Business Gold, 11 Feb. 2011)

iTunes promo on main American Express account page

Enrollment screen (link)

 Amex Enrollment screen

Comments (1)

American Express Now Offers Basic PFM Functions

By Jim Bruene on February 10, 2011 5:23 PM | Comments

image I was pleasantly surprised today to find that American Express has slipped basic PFM (personal financial management) functionality into its online card management area (note 1). The company allows the user to tag transactions and view results in graphical format (see screenshots below).

According to the FAQ, each transaction can have up to five tags. And each user can create up to 200 unique tags to apply to transactions.

Significance: Combined with the categories automatically assigned to each transaction, American Express is now offering basic PFM services. Although a little clunky--a three-click process is required to add a tag--it's a nice addition and something every online banking service should support. 

How it works
1. Click the "Add Tags to Transactions" link on the right side of the Statements & Activity area (below):

American Express online account managment with tagging function

2. Select a transaction(s) and apply an existing tag or create a new one, then click the Apply Tag button (lower right):

Transaction tagging at American Express

How it looks
After apply the tag "Personal," it now shows up in the transaction listing:

American Express online transactkion listing showing user generated "tag"

Once tagged, users can view transactions by tag categories:

American Express view my tag

Or view graphs by tag:


1. The example shown is for a Business Gold account. I'm not sure how long it's been available. The first mention I could find about it via Google was Nov. 2010, so we'll go with that until someone chimes in with better info. 
2. For more on online personal financial management (OFM/PFM), see our Online Banking Report.


Set Travel Notifications Online at Capital One and Chase Bank

By Jim Bruene on January 25, 2011 6:27 PM | Comments (2)

image Since I'm about to cross the Atlantic for our FinovateEurope conference, I wanted to warn my card issuers that they'll soon be seeing unusual charges. Luckily, two of my issuers now allow customers to handle that online, saving time and money for the bank and me. Thank-you Capital One and Chase Bank (see screenshots below).

However, I was only batting .250 since six did not offer an online option (at least not for my account types): American Express, Bank of America, Citibank, Discover, US Bank and Wells Fargo.

Bottom line: In the not-to-distant future, this manual process will be rendered moot, because my issuers will know where I am via mobile phone GPS (see Finsphere posts). But until then, I appreciate the time savings of the online option and am more likely to use these two cards because of it.

Capital One "Set Travel Notification" link within Customer Service area (25 Jan. 2010)

Capital One "Set Travel Notification" within Customer Service Area

Capital One's Set Travel Notification form


Chase Bank's Travel Notification Form within Customer Center

Chase Bank's Travel Notification Form within Customer Service

Chase Bank's Travel Notification Form

Chase Bank's Travel Notification Form

Comments (2)

Self-Service: Bank of America's MyFraudProtection Allows Online Review of Suspicious Card Transactions

By Jim Bruene on January 19, 2011 3:02 PM | Comments

imageThe reason bank call centers still field millions of calls from online banking customers is that most account problems cannot be solved online. It's not that banks don't have the technology or the business case, it's just a priorities challenge. Effective self-service modules are time consuming to build, test and integrate, while employee and customer education pose an even bigger hurdle.

But slowly, as more and more consumers look to resolve issues with a mouse click or finger flick, financial institutions will add self-service troubleshooting wizards to online/mobile banking.

The latest example comes from Bank of America.

I've been a BofA cardholder for the better part of two decades, and every year spend an hour or so verifying flagged transactions via phone with bank-fraud reps. It's an annoying, but necessary, part of making 50 to 100 charges every month for home and business. 

But my most recent experience was very different. When I went online to pay the bill, not realizing (but suspicious) that my card had been cut off, I was greeted with the following message underneath the card balance on the main Account Overview page (see screenshot 1):

Online access is not available for this account. Please go to and verify recent transactions. Or you may call
1-800-427-2449 for additional information.


How it works

Step 1: Following the link, I ended up at an entirely new site, running outside online banking where I was required to re-enter my account number (screen 2), last 4 of SSN, Zip, and phone number (see screen 3).

Step 2: I was then required to answer random questions pulled from the credit bureau to authenticate myself (screen 4).

Step 3: Finally, I was able to review and approve the transactions in question (screen 5). I was then thanked and told I could use my card again (screen 6).

However, after all this, I was still not able to pay my account online and had to call after all. The rep told me that it takes between two and 24 hours for online banking access to become available (note 1).



All-in-all, I liked the system. However, it needs to be more integrated into online banking (see note 2). Given all the extra work required to authenticate myself, it would have been faster just to call the 800-number. If I were a normal customer, that's what I'd do next time. I hate the stress of going through the authentication process: With everything on autopay, who can remember their exact payment amounts anymore?  

And worse, there is a security disconnect here. I log in to my credit card account only to be told it's unavailable and that I should log in to some site I've never heard of (that doesn't even have a Bank of America URL, note 3) and turn over personal info. It looks more like a crude phishing ploy than something from a major bank. And as far as I can recall, there was no customer education on this process.  

So, I applaud Bank of America for making transaction verification self-service. But there's still much work to be done before it replaces the phone process. 

1. Main Bank of America Account Overview screen (14 Jan. 2011)

Main Bank of America Account Overview screen (14 Jan 2011)

 2. First screen at (link, note 2)Bank of America

3. Step 2 of 3 of authentication process

Step 2 at

4. Step 3 of 3 of authentication processimage

5. Transaction reviewimage

6. Confirmation message (and survey invitation)image


1. This was the weekend that BofA was having website trouble, so it may not always be delayed.
2. I realize the bank is using the fraud-protection site as a standalone system so it can direct any cardholder to it without first needing to log in to online banking, hence the authentication requirement. But for logged-in users, it seems unnecessary. Although it does provide an extra measure of security, in case the cardholders' online access had been breeched by the person attempting to use the card, that extra security comes at too high of a usability cost, in my opinion. 
3. The URL does redirect to, which helps.


Cardlytics Partners with ClairMail to Take Merchant-Funded Rewards Mobile

By Jim Bruene on December 7, 2010 5:02 PM | Comments

image One of the best innovations to come out of this recession is in-statement, merchant-funded rewards. First-mover Cardlytics launched at last year's BAI Retail Delivery (see post).

A year later, it was already reaching 30 million consumers  imagethrough relationships with more than 100 card-issuing banks and 100 merchants (see notes 1, 2). That's unheard of growth in financial services. If just one-third of the 30 million customers look at their statements each month, Cardlytics would have more unique visitors than Groupon (note 3), which has been called the "fastest growing company ever." 

We're not saying Cardlytics has anywhere near the $60-70 million in monthly revenues attributed to Groupon, nor the $6 billion valuation. But enough similarities can be seen in their business models that I'd be very, very happy if I were an early Cardlytics investor (note 3). For example:

  • Both earn revenue directly from merchants who pay only when sales are made
  • Both leverage online channels to deliver significant discounts to targeted users
  • Both are first movers with aggressive growth tactics

And Cardlytics is different too:

  • Cardlytics focus (for now) is national merchants, whereas Groupon is closely associated with local merchants (but is adding national merchants)image
  • Cardlytics can target much more precisely and keep offers out of the hands of the merchant's existing customers, a huge and unique benefit
  • Cardlytics does not need to market its own site to consumers; it rides on the coattails, and leverages the trust, of its banking partners

Mobile opportunity
Cardlytics operates at the intersection of payments and advertising. And while the online card statement is the place to be in 2010 (see screenshot below), clearly the future for any shopping-related service is mobile.

Although no specific products or partners were revealed, the startup signaled its intention to go mobile with its ClairMail partnership announced today (press release).

Cardlytics example: in-statement McDonald's offer made to Burger King customers

cardlytics in-statement merchant-funded offer for McDonalds


1. Cardlytics will be demoing the latest innovations in its service at our Finovate Europe conference on Feb. 1, 2011.
2. BillShrink won a Best of Show award at Finovate Fall for its take on the concept (video).
3. On the strength of its early growth, Cardlytics landed a huge $18 million C-round in August.
4. According to Compete, Groupon had more than 8 million unique U.S. visitors in October.


Wells Fargo is Not Accepting Credit Card Applications Online from Non-Customers

By Jim Bruene on December 2, 2010 8:11 PM | Comments (2)

image You know there are still improvements to be made in the channel when the fourth largest bank in the country doesn't accept online credit card applications from non-customers. (Update, 3 Dec.: Apparently, this is a long-standing Wells Fargo policy, not a reaction to the recent credit market; see second comment.)

Consumers applying for a credit card at the Wells Fargo website are first asked if they are current Wells or Wachovia customers (see first screenshot). If the answer is "no," then they are out of luck. The bank won't allow an application online (note 1). They won't even take a secured card application.

And the bank expends little effort trying to convert these would-be applicants into deposit customers. There is no link to the online checking account app, just a small text link to the bank's location page where customers are encouraged to look for a branch to try their luck at the new-accounts desk. 

Analysis: I understand that it's costly to process applications when only a small portion are approved. And customer ill-will generated by credit declines is also bad for the brand (something that I've recently had first-hand experience with).

But surely there are better alternatives than simply slamming the door on non-customers. For example, Capital One and Discover allow applicants to find out if they are on a "preapproved" list before applying (previous post). That, plus educational messages, could help slow the flood of unqualified applicants.  

Wells Fargo's credit card application screens applicants by asking if they are current customers (link; 2 Dec. 2010 from Seattle ISP, Firefox 3.6.12)

Wells Fargo's credit card application asks one question in step 1 (

Non-customers are uninvited to apply 
Note: Highlights are ours

Wells Fargo Response to non-customers  


1. A friend in Texas told me about this earlier this week and sent me a screenshot to prove it. I thought it might be a regional thing, but I got the same message when I tried to apply from my Washington IP address. And I am a Wells Fargo customer, so they must not be consulting cookies when delivering this message.

Comments (2)

Who Wins with NFC-Based Mobile Payments?

By Jim Bruene on November 18, 2010 7:37 PM | Comments (1)

image Now we can stop speculating and begin to plan strategies for the new NFC-in-the-phone world. Google CEO Eric Schmidt announced that an NFC phone running Android Gingerbread would be available "within a few weeks." He even demoed the NFC capability on stage on what is thought to be a new phone called Nexus S. He showed a location check-in, not a payment (see video below, first 6 minutes cover the NFC announcement).

You can be sure Apple will not let itself be out-innovated on NFC, so expect NFC on the iPhone 5 next summer. So what, if anything, does this mean for banks and credit unions?

There's much to be determined still, depending on how much control Apple and the carriers try to exert. The Isis venture from AT&T, T-Mobile, and Verizon is an indicator that the U.S. telecom giants are actively looking to gain an foothold in mobile payments. And it's not like the huge card issuers and MasterCard/Visa are going to sit on the sidelines. No one knows how it will play out. 

But it's interesting to try to figure out who stands to gain, and lose, from the inevitable move from plastic to mobile device. One aspect I hadn't though about was brought to my attention in a conversation with M-Com's Serge Van Dam yesterday. He pointed out one likely consequence of virtual cards running in phones: the resurgence of retail store-branded "charge cards" (non-Visa/MC).   

By making store cards virtual, almost any size merchant will be able to jump on the loyalty bandwagon issuing their own virtual loyalty/charge "card" hooked directly to customer bank accounts (or PayPal), avoiding Visa/MasterCard interchange. It's a decoupled debit play, but without the expense/infrastructure of issuing plastic cards.

Here's my list of possible winners in the NFC world. What do you think?

Potential winners:

  • As outlined above, the small merchant that uses virtual loyalty cards (i.e., in mobile apps) to compete with the bigger players
  • Larger merchants that may be able to cut their interchange costs by routing virtual store card transactions away from MasterCard/Visa/Amex
  • Mobile payment/commerce startups and clever financial institutions (including PayPal) that figure out ways to add value in the new NFC-enabled world (note 1)
  • Mobile telecom players (carriers, networks, and Apple) that derive income from the increase in mobile commerce and advertising
  • Card issuers, if NFC capabilities drive fraud losses down
  • Consumers, who gain convenience by no longer needing to carry a wallet full of debit, credit and loyalty cards around

Potential losers:

  • Incumbent payments brands, especially MasterCard/Visa/Amex, who could lose interchange revenue to upstarts

Google's Eric Schmidt shows first NFC phone running Android
Note: NFC demo is in first six minutes

1. My favorite quote from Google CEO Eric Schmidt's remarks in the video above," (NFC) will result in 500 new mobile payments startups."
2. Picture credit:

Comments (1)

Capital One's Online Prequalification System Rocks

By Jim Bruene on November 17, 2010 1:47 PM | Comments

image If you've read Netbanker a bit, you know I can get pretty excited at just about any new and shiny bit of fintech. So if you went only by my blog posts, it might be hard to differentiate between a cool new feature and a major strategic disruption. 

Well, take note, this is one of the big ones if Capital One can deliver on the promise. And that is a very important caveat. The card giant better be able to fulfill cards to the vast majority of those it prequalifies online or it will have legions of disgruntled applicants.

What the company has done is place a pre-qualification form between its online ads (see banner running on TechCrunch below) and the full application. The form asks for name, mail address, and last four digits of the Social Security Number, plus two multiple-choice questions about desired features and credit self-evaluation. 

The whole process can be completed in as little as 35 seconds (in my test it took 24 seconds to fill in the blanks; 8 seconds for the results to be displayed).

Importance: Credit-savvy consumers, about the only ones who'll be approved these days, know that every credit application negatively impacts their credit score, at least temporarily. Therefore, many are hesitant to complete an online app if they think there's a chance they won't be approved. Being able to test your creditworthiness (note 1) without a credit bureau hit is a powerful incentive to move consumers into the sales process.

The other advantage of this system is that even if you don't complete the full application after the pre-qual, Capital One has captured your name, address, and a positive match with your SSN. So they can hit you with followups in the near future. However, I am surprised the company doesn't ask for your email address. It must have dampened response in testing. 

Capital One banner ad across TechCrunch (17 Nov. 2010)









Landing page emphasizing the lack of risk to your credit score (link)Capital One Landing page emphasizes lack of risk to your credit score

Pre-qualification form

Capital One prequalification form

Results page with a recommended card and two alternatives
Note: I indicated a preference for travel rewards in the pre-qualification form.

Capital One prequalification results page

Online application
Note: Users must start over as none of the pre-qualification form info is transferred over


1. At the end of the pre-qualification process, the company only says you are "pre-qualified." There is no guarantee you'll get the card or credit limit you want.
2. For more on online lending, consult our previous OBR reports:
- Online Lending v5.0 (part 1) (Nov. 2005)
- Online Lending v5 (part 2) (Jan. 2006) 


Google Testing U.S. Credit Card Comparison Ads

By Jim Bruene on November 10, 2010 6:01 PM | Comments

image Today, when searching Google for "credit cards," a small Comparison ad appeared on the top of the results page, above the individual paid spots (see first screenshot below; note 1). The title was "Credit Card Offers" and clicking on it delivered me to the following URL: (see second screenshot).

Google had previously disclosed United Kingdom tests for credit card and mortgage comparison ads, but this is the first I'd heard of them in the United States (note 2). The comparison page had 101 credit card offers that could be searched based on certain card attributes such as "no annual fee" and/or by the user's self-evaluation of their credit quality.

Clicking on one of the offers delivered a page that summarized the salient points, but according to the fine print at the bottom of the page, Google isn't currently being paid for these credit card ads. However, there was a source code in the URL that delivered me to the U.S. Bank application, so Google may be banking referral fees for completed applications.

If this practice becomes widespread, card issuers will need to adjust their Google search buy and figure out how to gain better exposure on the comparison-results page. Right now, APR (interest rate) is the default sort mechanism.

1. Google search for "credit cards" brings up comparison ad (10 Nov. 10)

Google search for "credit cards" brings up comparison ad

2. Credit card comparison page includes sort and search options

credit card comparison Landing page includes sorting and search refinement options

3. The offer page provides detailed price info
Note: Clicking on the "application form" button takes users to the issuer's site to complete the application

Google credit card comparison Offer page

3a. Fine print at bottom of the page



1. Searching from a Seattle IP address on 10 Nov. 2010 at about 5:00 PM Pacific Time via Firefox 3.6 on WinXP.
2. Apparently a few others have seen them; for example, Search Engine Journal reported on the practice in an October post (here).


With the Launch of Foursquare-powered Social Currency, American Express Now Has 7 iPhone Apps

By Jim Bruene on September 23, 2010 6:31 PM | Comments (1)

In the spring, we predicted that 10 to 15 years from now there would be tens of thousands of iPhone apps from financial institutions alone (note 1). Our reasoning: Many (most?) larger FIs would have more than one app, perhaps dozens. At that time, nine financial institutions (note 2) were tied for most-prolific app deployers, each with two iPhone apps.

imageToday, I found out that American Express has blown that record away. With the release this week of a youth-oriented Foursqure-powered app, Social Currency (app link), the card issuer now has seven apps available for the iPhone alone (but still none for the iPad).

AmEx iPhone lineup
Two are from American Express Publishing (making the comparison to other financial institutions a little unfair):

  • Best New Chefs
  • Eat and Drink

Two are published by other companies:

And finally, three more from core card-issuers:

  • American Express used to access most AmEx cards
  • OPEN Forum for small business clients
  • mobileXtend that can only be used by employees of corporate clients who have licensed this service option 

American Express has seven apps available for the iPhone
Note: Shown here in search via iPad (22 Sep 2010)

American Express has seven apps available for the iPhone

1. See Online Banking Report: The Case for Mobile Banking (published March 2010)
2. See Online Banking Report: Mobile Banking and Finance Apps (published April 2010)

Comments (1)

Innovations Don’t Always Work: PayPal to Discontinue Browser Plug-in

By Jim Bruene on August 12, 2010 3:48 PM | Comments

image For years I’ve longed for a financial institution-delivered browser plugin that would help manage receipts, verify available funds, complete online forms, and provide secure payment options at legitimate ecommerce sites. The PayPal browser plugin, launched less than three years ago, offered most of that, in theory. 

I used it successfully a few times, but too often it popped up offering assistance when I didn’t need it. So I disabled it. Evidently, I wasn’t the only one who found it not worth the hassle (for more insight into the problems, read the comment thread and updates to the original announcement post). The company is pulling the plug on the service next month.

Now that PayPal’s plugin is off my computer, it's time to give Billeo’s another try. I used previous versions in the past, but hadn’t given it a thorough test since I moved to a Mac for most Internet browsing.

PayPal login splash screen (link, 9 August 2010)



Note: We wrote about plugins, toolbars, and tools in Online Banking Report: Grabbing Desktop Mindshare (published Aug. 2002).


Launching: The First Location-Based Fraud Monitoring Service, Finsphere’s PinPoint

By Jim Bruene on August 9, 2010 5:31 PM | Comments (2)

imageI've been looking forward to the day when financial companies would begin to leverage mobile phone location to fight payments fraud. That day has arrived with the launch of Finsphere's PinPoint which began its private beta a few hours ago. We have 100 invite codes if you want to test the service free of charge (enter "Finovate" in the Promotional Code box on the signup page).

PinPoint is a subscription-based alert service that runs on top of online banking. Using Yodlee's aggregation technology, PinPoint monitors all of the user's card-based transactions, and sends email and text alerts on potentially fraudulent transactions based on a number of factors, one of which is the consumer's physical location as indicated by the location of their mobile phone. Pricing has not been finalized.

The service competes with aggregated alerts from OFM's such as or Strands. But PinPoint's main competition is the card issuers themselves. The service holds several potential advantages compared to financial institution services (note 1):

  • The addition of the consumer's location is a huge help in identifying potential fraud and reducing false positives.
  • Receiving fraud alerts from a single, trusted source with a consistent design and methodology makes it more likely that the consumer will actually pay attention and take action. 
  • The service provides contact info and help for reporting fraudulent transactions.
  • PinPoint's entire mission is to identify fraud and help the end-user avoid paying for it; while financial institutions have similar high-level goals, they also have competing priorities that sometimes get in the way.  

The startup also plans to connect the service to credit bureau data where it will compete with the credit monitoring players such as Experian, TransUnion, Equifax, Intersections and others (note 2). The demo videos show a mobile app, but that's not part of the initial release.

Finsphere is a Seattle-based startup that's been operating in stealth mode since 2007. The company has raised nearly $20 million in two rounds from Bezos Expeditions, Mohr Davidow Ventures, Shasta Ventures, and Frazier Technology Ventures. The CEO and co-founder is Mike Buhrmann, a serial entrepreneur in the wireless/mobile space who originally worked at McCaw/AT&T. President Robert Boxberger is a former Wamu/Providian card exec (note 3).

Until today, press reports have been limited to reports of its first two rounds of venture funding (see previous Netbanker post). The company had developed a broad range of patented technologies dealing with location-based fraud tools. In addition to the consumer service launched today, the company has its eye on enterprise fraud-management tools.

PinPoint homepage (9 August 2010)


Activation screen
Users must confirm email address and mobile phone, then add one or more cards


Alert preferences
Users establish dollar thresholds for alerts, whether they want text and/or email delivery, and how often they want to receive then (daily or weekly)


1. For more information on alerts, see the most recent Online Banking Report: Transaction Alerts & Streaming.
2. For more information, see Online Banking Report: Credit & Fraud Monitoring Services (August 2007).  
3. Check out the company's About page, where five top execs introduce themselves and provide a 60-90 second overview of the features and benefits of the service. A very good use of video.

Comments (2)

Future File: Digitizing Paper POS Receipts

By Jim Bruene on July 23, 2010 5:48 PM | Comments (1)

image Some of the best innovations come from inventors that develop a solution to a personal pet peeve, then commercialize it. In financial service, Aaron Patzer has told the story many times about how he developed Mint to solve his own needs for a better financial management tool.

If I had Aaron Patzer's drive, or funds, I'd be working on a solution to digitize point-of-sale receipts. In our household, none of us can keep track of a receipt past the first 24 hours. Someone or some thing must come into our house during the night and make off with all paper receipts.

So when it comes to returning something to a store, we usually end up replaying this sad process:

  1. Try to remember where the receipt is
  2. Look for it
  3. Ask spouse if they've seen it
  4. Look again
  5. Curse bad memory (of spouse) and give up for the day
  6. Repeat above steps the next day
  7. Curse bad memory (of self and spouse) and give up for good
  8. Rehearse story to tell store on why you don't have receipt
  9. Return item to store without receipt
  10. Receive gift card instead of cash refund (because there's no receipt)
  11. Forget/lose gift card
  12. Curse paper receipts and vow to better organized


That's why I was excited to hear Square founder Jack Dorsey tell the audience at NACHA Payments in April that one of startup's key strategies was "focusing on the receipt" (see my Tweet right).

Shortly thereafter I met David Crossett at FinovateSpring 2010 who shared his vision of how his startup, ReadyReceipts (note 1) is gearing up to solve this very problem. The product, still in development, uses a unique approach that doesn't rely on the end-user carrying another loyalty card (thank goodness).

If you've ever bought something in an Apple Store (in the USA at least), you can see what he has in mind. Mobile POS systems that email you the receipt and skip the easy-to-lose paper altogether.

In addition to Ready Receipts and Square, a number of other companies are working on solutions including:

Relevance for Netbankers: Receipt management is a very real pain-point that costs consumers millions of dollars and millions of hours of frustration every year. Financial institutions, retailers, and/or direct online financial management (OFM) providers that solve this problem stand to gain market share and/or profitable fee income (see our recent Online Banking Report on OFM features for more info).

Intuit's QuickReceipts is tackling the lost receipt problem (22 July 2010)

Intuit's QuickReceipts

Intuit is spurring grass roots support by enabling visitors to send a Tweet requesting their favorite store adopt QuickReceipts (link)

Intuit's tweet campaign for its QuickReceipts from Third Solutions promotes Whole Foods participation (22 July 2010)


1. is currently under construction as they build out the company and product.

Comments (1)

Online Account Opening: Mango Financial Sweetens the Final Step

By Jim Bruene on June 21, 2010 4:11 PM | Comments (1)

imageI've always been a bit perplexed by how the online application process ends with such a whimper at many financial institutions. Often new applicants receive little more than two or three lines of small text such as:

Thanks for applying! Please watch your mail. Within 7 to 10 days you should have your xyz account. 
If you have any questions, call 800-YOURBNK. Have a nice day.

Think about how anti-climactic this is. Customers have just gone through an intensive research process, decided to go with xyz bank, evaluated the various options at the bank, figured out how to apply, located the necessary documentation, read through the disclosures, entered their most private financial details and passed through an online identify verification. 

Then after all that work customers receive in exchange no more than a short thank-you message and perhaps a confirmation code. Generally, customers can't even log in to their new account.

Here's where a new customer stands after submitting an online app: 

  • They cannot explore their new account to see how it works
  • They cannot verify the opening balance or pending deposit to see if it was processed properly
  • They cannot add additional funds to their new account
  • They cannot access their money to make a purchase, even via online shopping
  • They cannot set up bill payments, change passwords, set up alerts, adjust account preferences, add mobile banking or any of the dozens of activities that have to wait until account materials arrive in the mail
  • Users cannot purchase other products, consolidate balances, transfer info from an old account, order checks, contact customer service, refer friends, or do anything account related

New users are basically abandoned on-screen with absolutely nothing to do. The dead end is not only a bad first impression, but also affects account activation and engagement, resulting in lost profits.

This standoffish behavior may be partially rationalized: Since many applications will ultimately be denied, why waste time with someone who may not even qualify? But we know it makes no financial sense to treat every applicant as a potential loser. Why not assume everyone is a winner, and go from there if they are not?

So it was refreshing to find a financial company that understands the importance of a good start. Mango Financial <>, is another startup out of MPower Labs, the financial incubator from the the founders of NetSpend, brothers Bertrand and Roy Sosa. Two other MPower ventures debuted at FinovateSpring 2010, GoalMine from Gratio Capital and MPower Mobile (videos here).

The prepaid cards are issued by Austin, TX-based Horizon Bank, SSB.

How it works: The sales process for a Mango prepaid card is short and sweet, as it must be. It takes less than a minute to sign up. Users are automatically issued a reloadable plastic card which is shipped immediately, even before you load money on it. The company also issues a virtual card, which can be used immediately after money is loaded onto the card.

The card can be loaded via electronic bank transfer (ACH), direct paycheck deposit, or through retailers such as Walmart and CVS via Green Dot. Electronic loads are currently free of charge, while retailer-based loading costs $4.95 per transfer.

After the simple application process, users are presented with an action-oriented page (see first screenshot below). Users are congratulated for becoming Mango members (second screenshot) and given clear choices on what to do next (third screenshot) including a $20 incentive for directing their paycheck into their Mango account, making the prepaid account a clear checking-account substitute (note 1).

1. Final screen of successful application process at Mango Financial (18 June 2010)


2. Closeup view of the confirmation section above


3. Closeup of the "what to do next" options


4. Mango Financial homepage (17 June 2010)


1. Mango offers an additional incentive to add direct deposit. Only direct deposit customers are eligible to open a 5.1% APR savings account (first $5,000 only).
2. Mango has a two-page prepaid card application (click to enlarge).

image          image

3. For more on online account opening, see our Online Banking Report: Online Account Opening (June 2009).

Comments (1)

U.S. Travelers Need Chip & Pin Prepaid Travel Cards

By Jim Bruene on June 16, 2010 4:19 PM | Comments (2)

imageLast summer, I had the opportunity to spend a week in an apartment in Paris's 6th. The wonderful 1920s building overlooked a transportation solution even older: bicycles.

But Paris's popular Velib bike-sharing program has a modern twist, an automated rental system run entirely by unmanned kiosks that accept only debit and credit cards.

Subscribers (29 Euros annually, 5 Euros weekly) can ride the bikes free for the first half hour, then the price rises steeply to 3 Euros per hour and higher. But with stations every 300 meters, you can tool around the city very cost effectively. That is, if you are not American. 

imageWhy? Our old-school mag-stripe cards are no longer in step with the international gold standard of security, the imbedded computer chip unlocked by PIN entry, i.e., chip & pin or EMV. 

At most European merchants, it's not a problem. They are plenty willing to take the old-school mag stripe card in order to make the sale. Last year, we never had any trouble using plastic from our friends at Wells Fargo and Bank of America. But in certain situations, such as unattended ticket machines, U.S. cardholders can be out of luck.  

The Paris bikes are one very visible place where mag strip cards are not honored (see note 1). That explains the perplexed tourists I watched last summer struggling at the Velib kiosks trying repeatedly to get the machine to release a bike.

Financial institution opportunity: Here's a great way to pick up market share among well-heeled international travelers. Offer a chip & pin prepaid card. It's a modern-day travelers check, something every traveler will tuck in their wallets and purses, then forget about when they get home (note 2). And it's perfect for Internet distribution, especially if you issue cards nationwide.

Besides card fees, interchange, and travelers-check-like float, first movers could gain real market share with a great demographic.

According to Payments News, Gemalto is offering a chip-and-pin solution for U.S. card issuers. A few weeks ago, United Nations Federal Credit Union became the first U.S. financial institution to announce deployment of the Gemalto card (press release). The CU says it will be available in the second half of 2010. But, you'll have to be on staff at the UN to get it.

1. Apparently, there is an exception. American Express cards, with or without a chip, can be used at Velib machines. I wish I'd known that when I was in Paris.  
2. Closer to home, Canada is also in the process of converting to the new standard.
3. Photo credit: Clive Andrews. This was the typical tourist look at the Velib kiosk queue, utter confusion.

Comments (2)

Now That's Payments Innovation: Parkzing Puts Your Parking Tickets on Autopilot

By Jim Bruene on April 18, 2010 9:52 AM | Comments (1)

image When talking about payments innovation in the 21st century, PayPal is usually the first thing that comes to mind. The company took existing payment methods (debit, credit, and electronic/ACH transfer) and used the Internet for delivery and messaging. Ten years later it is one of a handful of financial companies that can claim nine-figure customer bases. 

And there are dozens (hundreds?) of companies working on creating their own PayPal in relatively new frontiers: mobile, social networks, health care, micropayments, and so on. We'll have several of them demoing at our upcoming FinovateSpring event May 11 (lineup here).

image But you don't need millions of users to create something of value. Case in point: Parkzing is a new service (with a great name) created in his spare time by Aren Sanderson, CTO of Third Ave Labs, the creator of mobile app discovery service Apptizer (great name #2).

Parkzing is a mostly free service that removes the hassle, and worry, from remembering to pay your parking fines. How it works:

  • Users register their license plate number with the service
  • Parkzing scans city parking fine databases daily
  • If it finds a match, it contacts the user with a reminder to pay; reminders continue until the fine is removed from the database
  • Optionally, users can give Parkzing their credit card number and the ticket  will automatically be paid for a very economical $5 per ticket fee (see note 1)

This is one of those ideas that is so simple, yet so valuable, that you cannot believe it wasn't invented the day that city databases went public. As you might suspect, not all cities post this info online, so it currently only helps those in San Francisco, Washington D.C. and NYC (request your city here).

Relevance to Netbankers: This would be a valuable service to offer online/mobile banking customers. It would differentiate you from the competition, help fill your city's coffers, and add value to your payments card(s). The main downside? Liability for technical glitches that cause fines to go unpaid. A nominal fee for the service could fund a payments guarantee and provide a small bit of revenue.   

Also, think about the bigger picture here. Why limit this to parking tickets? How about if my bill-pay provider scanned all my accounts every day and told me what I owed? Utilities, credit cards, school lunch account, the dentist, and so on. To some extent Mint, Yodlee and the other PFM/bill-pay players already do this. But as Parkzing demonstrated, there's still room for innovations in bill pay. 

1. Five bucks is incredibly low considering the convenience and the savings in late fees; in Seattle we owe an extra $25 after only 15 days. I'd be willing to pay $25 per year + $5/ticket for the service.
2. HT to VentureBeat for writing about it. 

Comments (1)

Credit Karma Provides Free Credit Scores to Sears Cardholders with Private-Label Version

By Jim Bruene on March 16, 2010 8:17 PM | Comments

image Finovate alum Credit Karma recently started providing a private-label version of its credit reporting service to Sears cardholders (see note 1). The service includes free credit scores and other data to help put those scores in an understandable context (see FinovateStartup 2009 video here).

image The new service, launched Sep. 2009, is delivered through a dedicated site, Since Sears cardholders must make a purchase each year to use the site, it provides an ongoing usage incentive.

The Credit Karma-powered service is clearly branded as a Sears and Kmart offering (note 2, screenshot #1). Interestingly, Sears also takes the opportunity to offer targeted advertising space to financial companies (screenshot #3). It also markets the credit-analysis service on its own credit card site (screenshot #2).

While Credit Karma traditionally derived revenue from advertising on its site, this move into the private-label channel provides additional growth opportunities. The Sears private-label site had nearly 140,000 unique visitors in February, about one-third the total at Credit Karma (see table below). It's a good deal for Sears, too: Offering credit-score analysis differentiates it from other retail card providers and conveys concern about its customers' financial well-being.

Website traffic at vs.  image 
Source:, March 2010 (link)

1. The Sears credit score site, powered by Credit Karma


2. Sears promotes the credit score service on its website


3. Sample page from
Note ads for Citi and ING Direct


1. Sears cards are issued by Citibank, one of the advertisers in the private-label site.
2. Kmart acquired Sears in 2004.


Through the Eyes of a Teen: Activating a Credit Card and Signing Up for Online Banking the First Time

By Jim Bruene on February 22, 2010 7:00 PM | Comments

image Recently, my college-aged son signed up for his first credit card. He chose Capital One not because of their long history as a card issuer or their flashy TV ads, or even their state-of-the-art website. No, he went with Cap One for the same reason as that of tens of millions before him: a simple, preapproved direct-mail offer at just the right time.

It's enlightening to see the process through the eyes of a credit newcomer. Even though he understands credit cards intellectually and has used debit/prepaid cards for years, a number of things were still less than obvious to him as he went about activating the card over the phone, using it for the first time, signing up for online banking, and paying his first monthly bill. For example:

  • The initial card-activation process was a mystery to him. He did not expect to have to call the bank when the card arrived. And the conversation he had with the CSR was confusing. I heard only his side of the call, but evidently Capital One pitched both credit insurance and ID protection services. He successfully said no to ID protection, but to his surprise, the first bill had a 1% fee tacked on for credit insurance, which he absolutely does not want (it's only a $300 credit line).
  • He's very concerned he'll miss the payment due date, which seems so far into the future, given the lag in posting, combined with the grace period. The payment on his first charge was more than six weeks later. To him, it almost seemed to too good to be true, and also made it harder to remember.
  • He doesn't have experience writing checks nor does he even have stamps around the dorm room; so even the simple act of paying the bill each month is not as easy as it seems. I helped him set up his checking account for ACH payments (see #7 and #7a below), but I'm not sure that would have been obvious to him had I not been looking over his shoulder.
  • I also helped him set up mobile and email alerts to remind him to pay, but again, without his father pitching in, I'm not sure he would have known to do that. He hasn't set up alerts on his checking account because he didn't know they existed.

My take: For the most part, things have gone smoothly, and Capital One has done a good job bringing him on board (see below). But it made a mistake with him, one that could ultimately cost the card issuer my son's long-term loyalty, the apparent "misunderstanding" about his agreeing to add credit insurance to the account. 

And it only netted the bank $0.93.

I was surprised how upset my son was at the credit insurance fee tacked onto his bill. Even though it was less than a buck, he was determined to reach someone at the bank right away to get it removed and stopped. He felt that the bank used his naivete against him. He felt betrayed and preyed upon. That's not a good way to start a relationship.

Capital One Online Banking/Card Sign-up Process
I took the opportunity to document Capital One's online banking sign-up process. It was clean and intuitive and took just a few minutes.

Step 1: Terms and conditions (13 Feb. 2010)
Note: The first page, shown below, was reached through a link in an onboarding email message encouraging signup for online banking.


Step 2: Authentication


Step #3: Select username and password
Note: Email address was prefilled from the info from original online app


Step #4: Choose security questions


Step #5: Encouragement to sign up for estatements
Note: Default set to Yes; also, there was no incentive to go paperless,
even $1 might have swayed him


Note: You must call customer service to switch from paperless to paper statement, again a disincentive to choosing paperless


#6 Confirmation (with a dash of humor)


#7 Set up payment account


#7a Confirmation



Finovate Alumni News from BancVue, Billeo, and Credit Karma

By Andrew Dolbeck on February 19, 2010 2:36 PM | Comments

Stories from our Finovate blog cover some of the most innovative financial companies in the world. More alumni news is available on our Finovate Twitter feed.

image BancVue Acquires Financial Literacy Company Skill-Life

In its first corporate acquisition, BancVue purchased fellow Finovate alum Skill-Life, a company that produces interactive games that promote financial literacy. The purchase price was not disclosed. BancVue expects to make more acquisitions and strategic partnerships in the future.

Skill-Life produces customizable game platforms where children can earn real-world rewards as incentives in games that teach financial skills. Skill-Life licenses its platforms to financial institutions, enabling them to add their own branding to the game environment (full post here).

Billeo Adds Bing to Offer Assistant

image Billeo has added Microsoft Bing to the list of search engines supporting its Offer Assistant product. Partnering with Bing gives Billeo the top-three players in the Internet search market (it already works with Yahoo! and Google), representing about 97% of U.S. searches.

Offer Assistant helps consumers take advantage of incentives and rewards from credit or debit cards while using search engines to shop online. Billeo's partnership with Microsoft adds Bing's cash-back rewards program to the service (full post here).

Credit Karma Launches New Dashboard Tool

image Consumer credit information provider Credit Karma has launched a new feature that provides targeted offers to visitors at its site. The feature, called the Ways to Save Dashboard, draws on information provided by visitors to anonymously shop for and present financial products offers.

With its new Dashboard feature, the Credit Karma site automates the complex process of researching new loans, credit cards, saving accounts, and other financial products (full post  here).


Finovate Alumni News from BrightScope, BillShrink, and

By Andrew Dolbeck on February 10, 2010 11:11 AM | Comments

We just launched a new blog focused on important developments at nearly 100 of the most innovative financial companies on the planet: those chosen to demo at our Finovate conference series. We'll have capsule summaries each week on Netbanker, but for the full post we encourage you to subscribe to the Finovate email list or RSS feed here.

We'll also be keeping you posted on even more Finovate alumni news via our Twitter feed here. Launches New 1099 Tax Filing Service

image Free online bookkeeping site has added its first fee-based service, shedding light on its business model for the first time. The company's new service helps small business owners manage 1099 tax forms for contractors, charging $5 per. Outright intends to introduce more fee-based services in the future while keeping the core service free.

Along with the launch of its 1099 service, Outright also launched a new tax information website, Right Taxes Now. The new site provides tax advice and offers opportunities to sign petitions regarding small-business tax relief legislation.

Read more about and its new offerings here.

BillShrink Expands into Small Business Market with Launch of Credit Card Advisor

image BillShrink, which provides money-savings advice on a variety of consumer products, has expanded its offerings to include help for business owners.

The company's new BillShrink for Business service helps businesses find better credit card deals. The company also has online tools in the works for comparing business wireless phone services and savings accounts.

Read more about BillShrink's new business services here.

BrightScope Launches 401(k) Data Tool

image On January 19, BrightScope launched a new online tool, the Personal 401(k) Fee Report. The new tool expands on BrightScope's previous 401(k) data offerings by comparing the costs and retirement results of selected plans against alternatives such as IRAs, making the data more useful to financial advisors.

The report also provides detailed information on each 401(k) plan, such as a breakdown of the fees and a list of the associated funds. Read more about BrightScope's new 401(k) product here.


Cardlytics Launches Innovative Debit Card Incentives Program

By Andrew Dolbeck on January 13, 2010 1:39 PM | Comments (2)


Would you like your bank statement to be more interactive? Cardlytics is betting you would. The company's patent-pending technology allows merchants to present their customers with rewards and incentives for shopping with existing bankcards, without needing extra coupons or promotional codes.

But the clever part is that the incentives are placed directly in the customer's online bank statement. The consumer can activate an offer by clicking on it and then using their card at the merchant. No coupons necessary.

Here's how it works:

(1) Bank clients log into online banking. The bank statement includes special offers based on the client's previous spending. As shown below, offers are presented next to the transaction record:


(2) To get more information, users click the expand link.

(3) Accepting the offer activates the promotional deal.


(4) Once the promotion has been activated, the cardholder simply uses the associated debit or credit card at the merchant. The reward dollars are then automatically credited to the account at the end of the next month. Nothing needs to be printed or carried to the store.

(5) Qualifying transactions are instantly confirmed in the consumers' online banking statement.

Analysis: The Cardlytics system is a useful tool for banks seeking to develop incentive programs. According to Cardlytics CEO Scott Grimes, consumers in the current economy are no longer buying into the "pay for it later" mentality fostered by credit cards, making this the perfect time for banks to provide debit card incentives. Merchants fund the rewards in exchange for the highly targeted advertising.

The appeal for the merchants is obvious. They are able to make highly targeted offers directly to customers of their competitors. In the example above, McDonald's places its famous Golden Arches in front of a Burger King customer. That's a definite score.

As a result, more than 50 national retailers have signed up for the platform.

One cautionary note: Will Burger King customers feel they've been sold off to McDonalds by their banks? It's a real concern. Customer education will be important so that consumers understand that no personally identifiable information is being released to advertisers.

The ultimate test for Cardlytics will come from the consumer. Will the Cardlytics program increase bankcard use? It might if the deals are attractive enough to change behavior. So far, the company reports positive results, with an average response rate of 15% and some going as high as 40%.

I'll be watching my bank statement.

Comments (2)

Discover Card's User-Generated Card Design Contest

By Jim Bruene on December 31, 2009 10:10 AM | Comments (1)

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

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

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

The promotion is powered by the Graffiti Facebook app.

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

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

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

Thanks to Payments News for the link.

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


2. Discover Card design creation page


3. Facebook optional personal info page


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



Comments (1)

Capital One Encourages Online Applications in Direct Mail for Student MasterCards

By Jim Bruene on December 1, 2009 6:57 PM | Comments (1)

imageMy son is almost half way through his second year of college, so we figured it was time he had a credit card. He's proved incredibly responsible with money, even avoiding dreaded debit card overdrafts so far. It's a good time for him to start building his credit history. And because he flies cross-country to school, I feel better knowing he has an emergency line of credit in his wallet.

Unfortunately, his student checking account provider, Chevy Chase Bank, hadn't offered him a preapproved MasterCard/Visa, so I've been watching his mail at home. It will come as no surprise that preapproved mailers to college underclassmen have been scarce. This summer he was courted by Discover Card and a higher-fee MasterCard (or Visa?).  But I was hoping for a preapproved fee-free MasterCard/Visa for maximum utility. 

This fall, Capital One (note 1) began to send my son MasterCard offers via snail mail. Right before Thanksgiving, the fourth or fifth piece in the series landed in our mailbox. He looked at it over the holidays and applied online for the card on Sunday. The fee-free card is no bargain for revolvers at 22.9%, but that's to be expected in this economic and regulatory environment.

The mailer offered the option of applying by telephone, mail or online. But the latter was clearly encouraged with a red badge, a 60-second response time, and a personalized URL with my son's name (e.g.,

Online application: The application process was a breeze. It was straightforward and fast and took less than five minutes, start to finish. The utilitarian online application design (screenshot 2) was easy to navigate and included ample embedded help, but no 800 number or online chat. The only unusual feature was the ability for users to select from about 16 different card designs. 

Because he was applying from a direct mail piece that included full Reg. Z disclosures, they were not repeated in the online app.

In total, it took about 4.5 minutes to complete the app process, and approval was granted in less than 10 seconds. My only complaint, a 22-digit offer and access code combination. Here's the exact timing:

  • 30 seconds -- Type personalized URL and load website
  • 30 seconds -- Type 16 digit reservation number and 6-digit access code
  • 3 mins and 30 secs -- Complete application form
  • 10 seconds -- Wait for credit decision

Onboarding: The initial onboarding process was almost nonexistent. Cap One didn't even send a congratulatory email on what is a major milestone of someone's banking life: their first credit card. All he received was the tiny "Congratulations! You're approved" screen at the end of the online approval process (see screenshot 3 below) along with instructions that his card would arrive in 7 to 10 business days. And there's no way to access the account until the card arrives.  

Grade: Capital One gets an A for account-acquisition marketing and online app mechanics, but earns a B- for first impression, and an incomplete for onboarding so far.

1. Capital One personalized application screen (29 Nov 2009, 8 PM Pacific)
Note: To begin the process, the applicant enters a 16-digit reservation number and 6-digit code found on the snail-mail piece.


2. Online application


3. Congratulations screen


1. I didn't realize until today that Chevy Chase is now owned by Capital One, which could be why my son has been receiving Capital One credit card offers. However, there has never been any mention of Chevy Chase or his checking account in the mailers. And one of the application questions was: "Do you have a checking account?"
2. For more info on how to create a winning online application, see our Online Banking Report: Online Account Opening published in June 2009.  

Comments (1)

American Express Jumps on the Alt-Payments Bandwagon in a Big Way; $300 Million Acquisition of Revolution Money

By Jim Bruene on November 19, 2009 4:51 PM | Comments (2)

image_thumb[9]Frankly, I haven't got my head completely around the latest acquisition in the alt-payments space (and I'm not the only one). I know that it makes my analyst life more interesting, but not sure what it means to the competitive landscape. Scott Loftesness over at Glenbrook Partners has the best analysis I've seen (also read the comments).

I'll break it down here. Revolution Money has two products:

1. RevolutionCard: Alt-payment card for use at the point of sale, both online and in-store.(see inset below from where RevolutionCard logo is right below Visa; full screenshot below). Unique PIN-based card with no account number or name (see below).

2. Revolution MoneyExchange: A person-to-person payment service.

image_thumb[2]Neither product appears to be very large. In the Q&A of the announcement webcast (press release), Revolution Money chairman Ted Leonsis said the company had signed 8,000 customers per day during a 90-day marketing test about a year ago. In total, it registered about 400,000 consumers (note 1). They also said they'd built merchant acceptance to about 1 million locations.  

The company declined to disclose the number of cardholders, but mentioned that each of its dozen marketing partnerships had brought in two or three thousand good cardholders. Leonsis said that given the current credit environment, they elected not to expand the cardholder portfolio, instead "doubling down" on platform features, such as ATM acceptance (note 2). 

But according to traffic figures from Compete, few Revolution Money customers were actively using its services. The P2P service, MoneyExchange, was the most-visited of the company's three sites with about 20,000 unique visitors last month, but that was down from 70,000 a year ago (during the marketing test). On the other hand, the Revolution Card volume was similar, just under 20,000, but up more than 50% year-over-year (see chart from Compete below).

 Compete: 18 Nov 2009, link

American Express opportunities
On the call (replay here through next week), American Express CEO Kenneth Chenault outlined seven opportunities it would pursue when the transaction closes early next year. Notably absent, person-to-person payments:

1. Reloadable prepaid products for new segments

2. Compete with other alternative payment companies (aka PayPal)

3. Payment products in social media services

4. Mobile payment offerings

5. International markets

6. Offer through banks that issue American Express cards

7. Pin-based debit offerings

During Q&A, Chenault emphasized how the acquisition was all about getting the Revolution Money platform/engine to allow AmEx to do things faster and for a lower cost. There was little talk of RM's brand, customers, or merchant base. The biggest discussion, during Q&A, was about reloadable prepaid cards.

My take: American Express purchased a platform they hope will allow it to get various new features/products to market faster and at lower costs to help head off total online-POS domination by PayPal. In addition, it acquired a proven team and management duo, and kept the whole works out of the hands of potential competitors such as Discover Card, Barclays, and others. While no one on the outside can understand the assumptions in the make vs. buy analysis, given its track record, American Express should be able profit from this $300 million IT investment. 

Online cards are sprouting new payment options
SeattleLuxe offers ten choices plus a link to pay by check (18 Nov 2009)


1. This is a registered user count, not necessarily a user of the service. Many of the new customers came for the $25 signup bonus or just to kick the tires. There was no cost or obligation to register.
2. On the call, Revolution Money said that 80% of ATMs accept their card.

Comments (2)

Watch the First Mobile Payment Made via Starbucks Card iPhone App at Downtown Seattle Location

By Jim Bruene on September 24, 2009 4:39 PM | Comments (5)

imageJohn Cook, a Seattle tech blogger at TechFlash, was apparently the first customer to use the new Starbucks Mobile Card iPhone app to purchase coffee at the Seattle Columbia Center Starbucks. The video was posted at 3 PM yesterday. For more info on the app, see yesterday's post.

He had a little trouble getting the point-of-sale scanner to read his iPhone-app-generated barcode, but after an extra few seconds (25 seconds actually) of wiggling the phone, the transaction worked (the transaction begins at about the 1:19 mark). Hopefully, with a little practice, users will know where to place their phones in front of the scanner for easy reading. He also demonstrates a card reload after the purchase (at 3:05 mark).

1. The myStarbucks app has moved up to number 6 in the iTunes app store, while the mobile card is at number 29 (as of 4:30 PM Pacific).
2. The mobile payments capability is live at all 16 test locations as of yesterday.

Comments (5)

Starbucks Launches First Dedicated iPhone App for Stored-Value Cards

By Jim Bruene on September 23, 2009 6:35 PM | Comments (3)

image This is a huge day, and one that I hadn't expected for at least another couple years. The convergence of mobile payments and caffeine. What more could a mobile banking geek and coffee connoisseur want? 

Starbucks pioneered stored-value cards and launched its first card in 2001. Today, it became the first company (note 1) to create an iPhone app exclusively for a payments card. Apparently, Finovate alum mFoundry helped build the app (cnet story, thanks Brandon).

Users were offered $5 extra credit on their first Starbucks card reload of $25 or more made from the new app. Registered cardholders received an email notification earlier today urging them to "turn your iPhone into a Starbucks card." (see screenshot below).

Note, the Starbucks Card Mobile app (app store link) is in addition to the regular myStarbucks app which has a store locator, coffee/drink info and a favorites-sharing function (app store link). That app also launched today (notes 2, 3). 

The app is gorgeous and shows how important design can be in creating a trustworthy and easy-to-use payment product (note 4). For example:

Home screen (left screenshot):

  • The card balance is immediately and prominently displayed

Reload screen (middle screenshot)

  • Uses big, easy-to-read buttons--remember, this is a small screen, with a giant green, full-width Continue button  
  • Current balance repeats at the top

Mobile payment screen (right screenshot)

  • The bar code for mobile point-of-sale payments (test only, see below) is rendered over a background image of the card, complete with card number, a nice touch to reassure users and Starbucks baristas that this is the real thing.

Of course, the mobile commerce and banking community will be abuzz about the mobile payments test. At 16 Starbucks locations (8 in Seattle and 8 in Silicon Valley), iPhone users will be able to pay at the counter using a barcode generated on screen (right screenshot). Luckily, several Starbucks are within a couple miles of my home so I'll be able to report back with results as soon as the test locations are live.

But I think the stored value card management functions are more interesting for the present. Just think if you had an application that looked like this for your debit or credit card. Think of the brand-value uptick, PR notice, and word-of-mouth buzz. 

Starbucks Card Mobile screenshots (23 Sep 2009)

image    image   image     

Email announcing the new mobile card app (sent to a registered Starbucks cardholder in the mobile payments test market, 23 Sep 2009, 12:43 PM Pacific)



1. Starbucks is the first company in the U.S. to have a dedicated app for a payments card. Although unaware of any elsewhere in the world, I would expect that card apps exist, at least in Asian markets.
2. The main Starbucks app is currently the 33rd most popular free app in the store and number 1 in Lifestyle; Starbucks Card Mobile is number 46 overall and 3 in Lifestyle (6 PM Pacific).
Update (9 PM Pacific): myStarbucks has moved to number 19 and Starbucks Card Mobile to 38.
3. The Starbucks apps are huge, 6.3 MB for the regular and 3.7 MB for the card, so makes sure you have good reception or are connected via WiFi.
4. However, I have been unable to log in to my actual Starbucks account as of 7 PM Pacific, owing perhaps to overloaded servers.
5. For more info on financial institution opportunities, see our Online Banking Report: Mobile Banking via iPhone.

Comments (3)

American Express "Take Charge" Campaign Launches with Powerful Full-Page Ads but Weak Online Support

By Jim Bruene on September 3, 2009 12:01 PM | Comments (2)

imageEvidently, there is still a disconnect between the print and online advertising groups at major advertisers.

Case in point: American Express kicked off a new campaign (press release) with an impressive full-page ad (p. A9) in Tuesday's WSJ (see inset) and other print media (note 1). It was a timely ad, playing on money fears and overall security concerns. It concluded with the company's new tagline:

Don't Take Chances. Take Charge.

The call-to-action uses a new URL <> that leads to a new microsite (see second screenshot below). Wanting to look at it, I did what I always do, typed "take charge" into Google. Nothing (see first screenshot). I even Binged it. Again, nothing. Searches at Twitter and Facebook also came up empty. Even at American Express's own website, site-search results do not include the microsite (note 2).

It's hard to understand why AmEx would spend millions on a new campaign and microsite without Google AdWords support to help people find it, at least until the microsite starts appearing on the first page of search results (note 3).

But after looking at the Take Charge microsite, I can see why the company might not be ready to direct search traffic there. The site is a good example of what NOT to do. The Flash-based site is slow-loading (note 4) and sparsely filled with ten testimonial videos (notes 5, 6), a list of seven benefits for using a charge card, and a couple links out to the main AmEx site.

So far, the microsite looks like a pure branding play. There's little there that would motivate someone to apply for a card on the spot. But with millions being spent on other media using that URL, it seems like a wasted opportunity, so far. It will be interesting to watch it evolve.

Google search results for "take charge" (9:30 AM Pacific, 1 Sep 2009 from Seattle IP address)


AmEx Take Charge microsite (1 Sep 2009)


1. Here's the initial media buy according to the company's press release:

The marketing campaign launches (Sep. 1) with print advertisements in national newspapers, including The Wall Street Journal, The New York Times, and USA Today. On September 2, print advertisements will run in major regional newspapers, including Boston Globe, New York Post, Los Angeles Times, San Francisco Chronicle and the Chicago Tribune. Television advertising will begin to air on major broadcast and cable stations such as CBS, FOX, NBC, TNT, A&E and the Discovery Channel breaking during the U.S. Open on September 5.

2. The search results do provide relevant links, just not to the microsite.
3. I haven't tested it on other computers, but AmEx's site just about brings my 3-year-old Thinkpad to a grinding halt. It's not a good first impression. The company either needs more server bandwidth or a less demanding page, or preferably both. There should also be a link to a lower-bandwidth version.
4. Currently, the AmEx site does not come up within the first 10 pages. There's also a remote possibility that Google won't let AmEx use "take charge" in search ads due to the similar-sounding TakeCharge Financial. But I have to think AmEx lawyers have worked through that issue already. 
5. There are small "apply now" links displayed at the end of each video.
6. Once it loads, the site is visually interesting (see screenshot above).

Comments (2)

PayPal Launches Drop-Dead Simple Teen Prepaid Card & PayPal Account

By Jim Bruene on August 12, 2009 5:33 PM | Comments

image Sometimes, banks forget the importance of simplicity, especially when it comes to less-than-crucial, ancillary services such as a prepaid teen account. Sure, I'd love to have a reloadable card that my son could stow in his backpack for emergencies. But I'm not going to spend a half-hour looking for one, applying for a new account, and then trying remember where and how to access it (see note 1).

But if the process was painless and integrated with my online banking, I'd buy a half-dozen prepaid cards, one for each child, one to toss in the glove box of each car, and another for my briefcase (note 2). 

It looks like PayPal is the first to step up to this challenge with its new student account (company blog post) which has been in beta testing since last November (beta site; note 3). The account is free of charge (note 4), and signup takes just 51 seconds.

Signup & funding
Current PayPal customers can sign up their kids for an account in under a minute. That includes clicking on the <> URL, completing the six-field app (see first screenshot), all the way to the approval screen confirmation (screenshot #2). And, half that time was simply logging in to my PayPal account. If I'd already been logged in, the total time to complete the application, process it, and receive approval would be just 23 seconds! That's the fastest financial services application I've ever completed by a factor of 10 (note 5).

The account, which shows up as a link at the top of the parent's PayPal account (screenshot #3) includes parental controls for all transaction types and comes with both an online account and a PayPal prepaid MasterCard debit card. Both will come in handy for today's teens, who cannot easily shop online without credit or debit cards of their own.

Transferring funds to the account takes mere seconds, and parents can choose from one-time loads or periodic transfers so the card can be used to accumulate an allowance (screenshot #4). Transfers show up in real time, with green color-coding, after hitting enter (screenshot #5).

Overall grade: I give it an A+ for ease of use and an A+ for value, a winning combination. Nice work. 

1. PayPal teen card application for current PayPal customers (12 Aug 2009)


2. Congratulations screen


3. Student account, and prepaid balance, shows up on the parent's main account overview page 


4. Funds transfer screen 


5. The funds transfer is immediately displayed within the student account area


1. The final item is why the Visa Buxx card never worked for me. I bought one but could never remember how to access it or add more money.
2. Verient is doing some very cool things to help in this regard; we'll profile them here soon.
3. Hat tip to Payments News for the link.
4. ING Direct's system for creating a new savings sub-account is similar speedwise, but it's not technically a new account. 
5. The only major fees, besides PayPal merchant fees, are the $1 ATM withdrawal fee and a 2.5% foreign currency fee.
6. For more info on online account opening, refer to the latest issue of Online Banking Report: Improving Online Account Opening ROI.


Things I Would Gladly Pay (my bank) For: Payment Services for Travelers

By Jim Bruene on July 15, 2009 5:17 PM | Comments (4)

imageHaving just gone through the exercise of calling four banks to tell them I may be using their card outside the country
(see note 1), I'm convinced it's high time for banks and card issuers to upgrade their online services for travelers. It would not only be convenient for customers, but also develop into a sizable profit center for banks. 

Newspapers have supported automated vacation stops/holds for many years primarily to reduce customer service costs. But credit and debit-card issuers have a much stronger business case. For example:

  • Fewer fraud losses
  • Lower customer service expenses
  • More interchange, exchange fees, and interest income from authorizing more transactions
  • Cross-sales of travel-related services
  • Advertising/sponsor revenues
  • Potential subscription or per-trip fees

Here's the features I'd like today:

  1. Web-based form to input travel itinerary
  2. Ability to update the itinerary when changes occur
  3. Ability to establish withdrawal limits while traveling
  4. Ability to order foreign currency
  5. Ability to switch my email alerts to text-message alerts while traveling (see Alaska Airlines screenshot below)
  6. Ability to purchase trip insurance
  7. Ability to order prepaid travel card(s)
  8. Ability to see exchange rates and have them automatically forwarded to me on a periodic basis while abroad
  9. Info on using my debit/credit card abroad, including fees, what to do if it's lost or stolen, calling customer service, cash advances from international banks, and so on
  10. ATM/bank maps at my destination
  11. A few disposable card numbers I could use if purchasing online while out of town
  12. And finally, something I wouldn't have thought of until this past trip, a guarantee that the bank won't cancel and reissue my card while I'm traveling (see Wells Fargo, note 1).

And a few more items for the future file:

  1. Automatically track my whereabouts via GPS
  2. Ability to forward travel confirmations (e.g., so I wouldn't be bothered to input my itinerary
  3. ATM/bank location on my mobile
  4. Automatic coverage of any bills that come due during the travel period

Depending on the package, a one-time travel fee of $5 to $20 would make sense. Or, using the telecom model where every value-added service is sold on a subscription basis, a $4.95/month "frequent traveler" upcharge would be palatable.

Alaska Airlines message service (14 July 2009)
Allows user to choose different messaging options depending on whether they are home or on the road 





























1. And despite my advance call, Wells Fargo canceled my credit card mid-trip, without telling me (there was a letter waiting when I got home), despite the fact the fraud the bank was concerned about happened more than two months prior (see previous post). 
2. Image courtesy of

Comments (4)

Chase Bank Pitches Credit Card Balance Transfers at Login

By Jim Bruene on June 23, 2009 12:16 AM | Comments

image Chase has great graphic design panache (see previous post here and here). As I was logging in to my account last week to see what the bank had done with a pesky $2 balance remaining from my payoff a month ago (see note 1), I was presented with an eye-catching offer to transfer a balance (see first screenshot below). 

The balance-transfer options weren't quite as enticing as they've been in the past:

  • 0.99% for six months plus 3% balance-transfer fee
  • 5.99% for a year plus 3% balance-transfer fee

This time last year, the 5.99% offer would have likely been for the life of the balance. However, under new regulations approved by Congress, where monthly payments must be allocated to the highest rates first, it no longer makes financial sense to offer a low rate for the life of the balance.

Note: Chase provided real-time chat support as I considered their balance-transfer offer (see second screenshot below).

Chase Bank's login interstitial (16 June 2009)


Chase offered online chat via a popup window


1. Kudos to the bank for automatically eliminating the $2 in extra interest accrued between the day I paid my balance in full online (at the Chase site) and when the payment posted. When I logged in I was afraid I might see a $39 late fee on the $2 remnant balance. 

2. For more info on post-login marketing, see our recent Online Banking Report on Selling Behind the Login.


PayPal markets its credit card to users at logout

By Jim Bruene on May 21, 2009 5:27 PM | Comments

image For many years PayPal has deposited users on its shopping portal when they log out of their PayPal account. This afternoon I saw something different at logout for the first time in recent memory, a pitch for the PayPal Plus MasterCard (screenshot below).

Although the company has marketed this card to me dozens of times immediately after logging in, it's the first time I remember seeing it after logging out. The hook is the card's new personalized photo option.

But a funny thing happened when I clicked on the Get Started button: I was dropped on to PayPal's homepage where an error message explained:

You must log in before you can access this page.

A very odd requirement for an offer made after logging out. I followed the instructions and logged in, but there was no mention of the credit card. I just ended up at the regular account management page.

I guess it was PayPal's turn for a programming glitch (see yesterday's post on Rudder). Luckily, this problem doesn't impact anything but PayPal's online marketing results (see note 1). When I logged out this time, I was shown the usual PayPal shopping portal (see third screenshot). 

PayPal pitched its PayPal Plus MasterCard at logout
(21 May 2009, 3:30 PM Pacific)


 Error message after clicking "Get Started" on offer page
(21 May 2009)image

 PayPal logout offer a few minutes later (21 May 2009)


1. For more info, see our most recent Online Banking Report: Selling Behind the Password


New Online Banking Report Published: Selling Behind the Password

By Jim Bruene on April 24, 2009 6:14 PM | Comments


We just posted our latest Online Banking Report.
It will be mailed to subscribers tomorrow. It's also available online here. There's no charge for current subscribers; others may access it immediately
for US$395.


Selling Behind the Password
Unlocking the marketing potential within
online banking

48 pages (published 21 April, 2009)

In this report (abstract), we go behind the login screen and report on the marketing and cross-selling practices of 15 financial institutions and card issuers.

Even among large banks, there's a huge disparity in the amount of cross-selling efforts within online banking. Wells Fargo is the most prolific, with nine marketing messages and product placements alone on its main account-management page. The bank also uses login and logoff activities to display promotions (see screenshot below). On the other hand, US Bank has just a single link to an "offers page" buried below the fold. Most FIs fall somewhere in between.

We looked at the opportunities within six different areas:

  • Interstitial pages (splash screen) inserted after performing any online activity, especially after the initial login.
  • Banner and keyword promotions within the secure online banking area
  • Product placement within online banking and bill pay
  • Transactional upgrades
  • Page displayed after an online banking session has concluded (either through logout or inactivity)
  • Product/shopping/discount portals and third-party ads

The following financial companies were analyzed by logging in to actual accounts and documenting their sales and marketing efforts:

  • American Express business gold
  • Bank of America online banking
  • Chase credit card
  • Citibank business card
  • Citibank online banking
  • Discover Card
  • Everbank
  • First Tech Credit Union
  • ING Direct
  • Jwaala (demo only)
  • Mint
  • Netflix (non-financial)
  • PayPal
  • Revolution Money
  • US Bank
  • WaMu
  • Wells Fargo

Wells Fargo promotion displayed after logging out from online banking
(27 March 2009)



Are Paper Statements on their Way Out? American Express to Force Up to 7 Million Cardholders into Electronic Statements

By Jim Bruene on April 24, 2009 9:58 AM | Comments

image Today's American Banker tells of AmEx's plans to force electronic statements on an undisclosed portion of its corporate cardholder base, said to number more than 7 million accounts worldwide (note 1). This is probably a bit of an exaggeration, as it's more likely that paper statements are being eliminated as a standard account benefit and must be negotiated separately for an additional fee. The company admitted there would be exceptions for those without Internet access or those that still required paper for customer billings.

But it's still a watershed moment. Today, paper statements are a standard feature of most banking and credit card relationships. In a study last year (note 2), Javelin Research found that only 15% of customers had given up paper statements entirely on their primary credit card.

Currently, the burden falls on the financial institutions to beg, trick, incent, or "green" their customers into giving up paper (see inset above from Texans Credit Union). For example, Citibank frequently uses an interstitial (splash screen) after login that encourages estatements (screenshot below). See our previous posts on those efforts.

The tables are about to turn. With severe profit pressure on most big banks and card issuers, most (all?) will soon adopt the American Express approach and offer electronic statements free of charge, with paper available for an extra charge. This is how checking-account pricing has evolved over the past two decades as banks migrated customers to check truncation as the standard, with paper checks returned for an extra fee (note 3).

Interstitial displayed after logging in to Citibank's online banking
(9 April 2009, note 4)


1. This decision will impact less than 10% of American Express cardholders, which number 92 million worldwide as of 31 March 2009, up 4% from 88 million cards a year ago.
2. Javelin survey of 2,500 consumer head of households in 2008.
3. For no valid reason any more, checks are still returned on my U.S. Bank "free" small business checking account for a $10 monthly fee.
4. Example from our latest Online Banking Report: Selling Behind the Password.


Straight out of Twitter: BillMyParents Launches

By Jim Bruene on March 27, 2009 3:31 PM | Comments

image I've mostly just observed the Twitter phenomenon, following a few people and seeing how banks and credit unions are using it (see my previous post for financial institutions on Twitter). However, I'd not fully embraced Twitter either as a publishing device or research source. The 300 or so RSS feeds, emails and news items that cross my desk each day seemed like plenty of intelligence to sift through.

But now, I'm reconsidering my priorities after learning about an interesting new alt-payment company BillMyParents from Twitter activity (see notes 1, 2).

How it works: BillMyParents is a new service from IdeaEdge's Socialwise (press release). The service is primarily designed for kids to shop online. They select what they want, then at checkout, redirect the bill to their parents via an email alert to PC or mobile phone. Parents login and complete the payment process at their convenience using MasterCard, Visa, Discover Card (no American Express; see third screenshot below). Card info can be stored for one-click future approvals.

The company charges a $0.50 transaction fee for each purchase. But like PayPal, the real money will be made when the company pushes purchase transactions through the ACH system.  

Currently, BillMyParents is selling prepaid gift cards from its site as a proof-of-concept. I tested it yesterday and everything seemed to work as described (see second screenshot below).

The opportunity: The service reminds me of the unmet need that PayPal filled nine years ago. Purchasing at eBay was a major hassle due to the lack of online payment capabilities. Kids have similar problems when trying to buy things online.

The service could also be adapted to other situations where one party does the shopping but wants someone else to authorize payment such as small businesses, nannies, or even spouses. It could also be used for extra security when the shopping is done in a non-secure environment such as public terminal and payment is redirected to a more secure device, such as your mobile phone.

Like any alternative payment, BillMyParents requires the merchant to add the option to its ecommerce platform and consumers to set up accounts. Both of those are time-consuming and face the chicken-and-egg dilemma, i.e., it's hard to attract merchants without a substantial user base while its difficult to add users without merchants.

Bottom line: This is a winning idea. The massive discretionary purchasing power of teens and pre-teens is a tempting target in this difficult retail environment. And financial institutions, or their payment partners (e.g. Visa, MasterCard), looking to differentiate themselves with the youth market, could jumpstart the program. Or more likely, PayPal and/or Amazon will dive in, either acquiring BillMyParents outright, or building their own version(s).  

BillMyParents homepage after setting up an account (26 March 2009)
Note: Split login screen for kids (left) and parents (right)


Proof-of-concept: Gift card purchase (26 March 2009)


Parent's approval screen (26 March 2009)


1.  Thanks to Frederic Baud (@fredericbaud) who was the first in my network to Tweet about BillMyParents; and to Glenbrook's Scott Loftesness (@sjl) who's retweet is actually what caught my eye.

2. BillMyParents appears to have grabbed its Twitter page name (@billmyparents), but it's not yet active.


How Can Online Banking Develop its Own Black Card?

By Jim Bruene on February 18, 2009 10:00 AM | Comments (2)

image Yesterday, I looked at a list of free services likely to come under pressure as banks work on the Herculean task of returning to normal profitability. One area that's likely to remain free for the foreseeable future is online and mobile banking, at least the core account-access portion of it.

But we continue to believe that financial institutions are missing a revenue opportunity to provide premium fee-based services to certain segments.

imageIf American Express can command $2500 per year for its black Centurion Card and Barclays $495 per year (see note 1) for its slightly more pedestrian Black Card launched in December (see note 2), why can't banks get $10/mo for a similar premium version of online and mobile banking? The short answer: They haven't tried.

Just for the sake of discussion, here's a "gold online banking" service for which I'd pay $15 per month without a moment's hesitation:

  • High-end website and iPhone app
  • Long-term (7+ years) online storage of images, transactions, statements
  • On-demand credit score like Credit Karma 
  • Credit bureau alerts when negative items hit
  • Account aggregation with weekly summaries like Mint
  • Email customer service with 30-minute or less turnaround time
  • VIP phone and tech support with no phone tree
  • No overdraft/NSF charges (within limits of course)
  • Travel rewards/sweepstakes on electronic transactions
  • Pre-filled one-click credit application
  • Extra security options
  • SMS balance inquiry
  • Iron-clad, no-fine-print security guarantee with 100% immediate reimbursement and emergency credit line

For more elaboration on these benefits, see our Online Banking Report on Pricing Online Services.

Visa Black Card homepage (15 Feb. 2009)
Includes one-page online application


1. The benefits of the Visa Black Card are similar to those from many gold/platinum cards. One of the biggest differentiators is free limited membership to Priority Pass which gets cardholders into 500 airport lounges in 250 cities. However, according to the FAQs, Black Card holders are limited to two complimentary visits per year, so this would cost $154 annually if purchased directly from Priority Pass. In fact, for $349 annually, you could get unlimited access to airport lounges. 
2. The Visa Black Card has been advertised with full-page ads in the New York Times, the latest on 10 Feb. 2009 on p. A5 (national edition).

Comments (2)

Compete Reports an 8% Monthly Increase in Online Credit Card Applications, But 23% Decline from 2008

By Jim Bruene on January 29, 2009 4:14 PM | Comments (1)

imageFor card issuers, the latest online application activity is is either good news, bad news, or neither since Compete tracks only applications submitted, not approvals. This following chart was presented in its webinar today. You can request the entire deck at the bottom of its blog post.

According to Compete, there were more than 12 million credit card shoppers in the U.S. in December, up 6% from November and down 11% since a year ago. Of the shoppers, about 20%, or 2.4 million submitted an application. That was an 8% increase from Nov., but a 23% decline from a year ago. 

But Compete has no way to measure whether the card applications it tracks are approved. Recent data from Lending Club shows that less than 10% of its online consumer loan applications were approved in Q4. The big credit card issuers probably do a bit better by driving creditworthy borrowers to their sites via direct mail and online advertising.

Assuming approval rates of 20%, the 2.4 million credit apps in December resulted in about a half-million new accounts.  


Source: Compete, 29 Jan. 2009

Comments (1)

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

By Jim Bruene on October 27, 2008 6:14 PM | Comments (1)

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

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

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

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

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

Here are coming-soon financial institutions:

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

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

Comments (1)

Centrro Launches

By Jim Bruene on October 7, 2008 8:24 PM | Comments

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

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

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

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

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

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

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

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

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

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

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

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

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

Know Before You Apply homepage (7 Oct 2008)

KnowBeforeYouApply all-offers page (7 Oct 2008)

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

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

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

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

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


Visa Announces Android and P2P Mobile Initiatives

By Jim Bruene on September 25, 2008 11:05 AM | Comments (1)

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

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

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

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

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

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

Again, PaymentsNews has the entire press release here.

1. Visa says that the alerts will arrive "typically before (the consumer) leaves the store."

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

Comments (1)

My Best Interest Announces Rate Surfer from TechCrunch50 DemoPit

By Jim Bruene on September 9, 2008 11:53 PM | Comments

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

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

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

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


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

2. It's a 67MB download.


Will eWallets Make a Comeback on the iPhone?

By Jim Bruene on September 2, 2008 12:29 PM | Comments (4)

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

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

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

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

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

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

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

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

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

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

Comments (4)

Could Mobile Payments Get a Boost from Lowly Stickers?

By Jim Bruene on August 20, 2008 4:42 PM | Comments (6)

image Even though I have credit cards from Citibank, Wells Fargo, U.S. Bank, American Express and Chase, I have never been offered the opportunity to add contactless payment capability to my card, so I still have no firsthand experience of that particular wave of the future. 

And it hasn't been too high on my list of things to try, since it still requires carrying a piece of plastic or an additional device such as keychain fob (inset). I don't see much benefit to tapping a piece of plastic compared to swiping it.

However, I do look forward to NFC-enabled mobile phones. But given the hurdles for adoption among carriers, payment processors, and issuing banks, I wasn't expecting that much before the next summer Olympics.

But now an interim workaround is being tested around the world: the contactless payment sticker. It's a quarter-sized sticker you plop on the back of your mobile phone making it instantly payment-enabled.

That allows consumers to leave their wallets at home, a nice benefit for outdoor enthusiasts, club goers, or anyone who doesn't want to worry about losing their wallet while on the go. Of course, we'll need a few million more contactless-enabled merchants before the wallet-free world is realistic for most, but widespread use of stickers could move that along (see note 1).

Who has it?
There are several rollouts under way around the world. For example:

USA Technologies Pay Dot contactless payment sticker

1. There are about 110,000 PayPass merchants worldwide, less than 1% of the 25 million locations that accept regular MasterCard cards. 

Comments (6)

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

By Jim Bruene on June 20, 2008 11:06 AM | Comments (1)

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

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

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

Comments (1)

eBay Pitches Co-branded MasterCard to Bidders

By Jim Bruene on November 20, 2007 11:07 AM | Comments (2)

Given how many times I've had to tell clerks, "no, I really don't care to save $18 on my purchase today" (by adding yet another revolving credit product to my life), the come-on at checkout must work pretty well. Amazon has used this approach at online checkout for years, offering up to $30 in savings if approved for its co-branded credit card.

eBay recently began pitching its eBay MasterCard to bidders in its online auctions. As you can see below, a small "up to $25 back" is presented to users as they consider what bid amount to enter. The card is issued by GE Money and requires a PayPal account. Customers can opt to display their eBay userid on the no-annual-fee card.


I also received an email offer last night (7:34 PM Pacific) for the card (see screenshot below). It's an attractive holiday-themed message with the slightly misleading email subject line, "Get 10% off eBay purchases through Dec. 15." I clicked on it wondering why eBay would offer me, a frequent buyer, such a substantial savings. It turns out to only apply to the first $250 spent, for a $25 savings, not so rich compared to other credit card offers I typically receive in the mail. But with the tight integration and 30-second loan application, it should provide a reasonable flow of new applications.  

The online application is simple and fast with pre-populated personal info and a 30-second approval promise. All I had to do on the first page (note 1) was decide whether to put my eBay ID on the plastic and enter my birthdate (see screenshot below). However, the process is marred by the upsell of credit insurance disguised under the seemingly innocuous heading (see closeup below):

Yes, enroll me in the Account Security program.

Granted, the cost is clearly disclosed, however, many applicants will check the box thinking they are protecting themselves from fraud, and only later find out they are paying an extra 1.5% per month (that's $900 per year on a $5,000 balance) for an insurance product they probably don't need. With all the problems its had with phishing and fraud, eBay should NOT trick customers into signing on for credit insurance under the guise of "security." 

Email solicitation from eBay (19 November 2007)

Landing page for email solicitation of eBay MasterCard
(19 November 2007


1. I did not proceed past the first page because I could not tell if hitting "continue" at that point would trigger a credit application. They may ask income and employment questions on the next page.  

Comments (2)

American Express Plum Card Update

By Jim Bruene on November 7, 2007 11:28 AM | Comments

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

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

Email Invitation (1 Nov 2007)

American Express email invite for Plum Card 

Plum Card homepage (5 Nov. 2007)

American Express Plum Card homepage


American Express Plum Card Uses "Scarcity Marketing"

By Jim Bruene on November 1, 2007 10:50 AM | Comments (3)

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

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

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

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

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

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

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


  1. If my wife would have been willing to move to NYC, I'd have tried very hard to get a job there after completing my obligatory MBA. 
  2. The 2% discount applies on spending of $5,000 or more; otherwise, the net-10 discount is 1%.
Comments (3)

Advanta Creates Social Network Around Small Business Innovation: Ideablob

By Jim Bruene on October 25, 2007 2:01 PM | Comments (1)

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

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

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

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

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

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

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

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

Advanta's ideablob main page (25 Oct 2007)

An idea page

Comments (1)

Anatomy of a Webpage: Citibank Business Credit Card

By Jim Bruene on September 24, 2007 4:59 PM | Comments

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

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

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

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

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


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


Password Reset Alert from American Express

By Jim Bruene on August 25, 2007 9:17 AM | Comments

I received an email from American Express late last night after resetting my password earlier in the day (see screenshot below). I can never remember my AmEx password, because I can't use my usual one due to the company's surprisingly short field of just 8 characters that also doesn't support special characters. I have it written down somewhere, but I can never find that either.

I went online late Friday afternoon to pay my overdue bill at I was pretty sure it was one of three possibilities, but after two unsuccessful attempts, and with the website warning me the third attempt would cause a lockout (note 1), I decided to go through the online reset process instead. 

That was easy. I just needed the card number, the code on the front of the card, and the answer to a security question. At that point, AmEx displayed my username and let me reset the password. It's one of the easier reset processes I've tested. That's a benefit to customers and helps cut customer service costs for AmEx. 

But the thing I liked most was the email message sent later that night informing me of the password reset (screenshot below). But I don't understand why it was sent more than six hours later. Why not send it right away? That would be way more impressive to customers, and would help reduce any potential fraud or privacy violations. Better yet, send a text message right to the customer's mobile, so they have real-time knowledge of the account changes.

Email Critique
Personalization: The company uses two pieces of personalization, cardmember name and the last five digits of the account number, to differentiate this message from the average phish. Excellent.  

Subject line: Your American Express Forgotten User ID is good and right to the point

From: "American Express" using an American Express email address. Good.  

Headline: Verify Your Account Transaction is a little confusing. All I did was reset my password. I'm not sure that average person views that as a "transaction."

Copy: The copy is short and to the point, but it could use a little editing for clarity. The third sentence, "If you did contact us...." seems unnecessary. And "If you did not complete the retrieval...." is not very user friendly language.

Design & Layout: Excellent.

Overall Grade: A- for the message, B- for timeliness


1. We recommend allowing more than three attempts before lockout. It's pretty easy to forget a digit or make a typing mistake. See our Online Banking Report on Security (#119) for more information.  


Long-term Archive Update: Chase Credit Cards Provides Six Years

By Jim Bruene on May 10, 2007 5:05 PM | Comments (2)

The folks at Chase Bank were on the ball today. Less than an hour after I wrote about Whitney Bank joining the long-term statement archive club (here), I received an email from a subscriber* at Chase letting me know they offer six years of online statements for credit cards. 

Below is the bank's announcement to cardholders. It's nicely designed with a green touch. And it reminds cardholders they will receive an email both when the statement is ready and when payment is due. And note the call to action: "TRY" paperless. That lets customers know they can always go back. Now that's the way to get fired up about saving trees, and the bank's cash. The only thing missing: a simple guarantee.

Grade: We score it an "A" 

Chase has been working hard to move customers out of paper. So far this year, the bank has run a $35,000 sweeps to go paperless (see post here) and they currently have a popup on the credit card homepage pitching estatements (see screenshot below).

January 2007 email to Chase credit card customers

Email to credit card customers pitching electronic statements

Popup at credit card site

Popup pitching paperless statements at Chase's credit card page

*He earns a Starbucks card for his responsiveness. Anyone else have five or more years of statements online? Add your comments or email me.

Comments (2)

Kroger Stocks Aisle 1 with Mortgages, Puts Pet Insurance on a Hang-Tag by the Dog Food

By Jim Bruene on April 4, 2007 5:50 PM | Comments (1)

Kroger Personal Finance logo I never understood the fight against Wal-Mart's limited-purpose banking charter. I say let it "enjoy" all the benefits of being a bank: CRA statements, regulatory audits, compliance committees, and endless questions about trigger terms and the alphabet soup of regulations. Maybe a banking charter would have distracted it from going ahead and providing pretty much the same thing, but as a non-regulated retail partner instead of a bank.   

Take Kroger for example. They are entering the financial services arena through their retail grocery stores with a menu of financial products outsourced from other companies (link here; also see note 1 and screenshot below).

According to a story Monday in the Lexington (KY) Herald-Leader (here), the grocer began quietly rolling out the services to its 2400 stores in February. Most of the  services are sourced through various Royal Bank of Scotland units.

Other than deposits, it's a full-service offering including:

  • Credit card issued by RBS National Bank (a unit of Royal Bank)
  • Mortgages through a joint venture with CCO Mortgage (a unit of Royal Bank)
  • Home equity loans through Charter Bank (a unit of Royal Bank)
  • Gift cards issued by Charter Bank
  • Pet insurance through PetFirst Healthcare
  • Identity theft services through Trilegiant's PrivacyGuard

Kroger Personal Finance product line

Kroger's product offering seems reasonable and no doubt will have good visibility in the company's stores. But few of these items are impulse buys and much of the success will hinge on whether the Royal Bank phone sales agents can close the deals. The item that has the best chance of earning its keep: pet insurance, a surprisingly popular search term (see Online Banking Report, #95) and one that can be cross-sold effectively with other pet items

Will Kroger Personal Finance be be a success? With low fixed costs, it might turn a nice profit, but probably not nearly as much as the rent that bank clients pay for in-store branches (a core Wal-Mart strategy). But will it impact the industry? Highly unlikely.

I'm sure Wal-Mart will be following this rollout closely. If they find it's working at Kroger, you can bet they'll be doing the same thing within a few years, and probably at much lower prices. So, if you think you've dodged the Wal-Mart Bank bullet, think again. 


1. The homepage of Kroger's personal finance site <>, is dominated by a pitch for its MasterCard rewards card. The only link so far to the broader offering is the "new products" link hidden on the right leading to the following page <>.

Comments (1)

Wells Fargo Adds Value to Mobile Bill Payments, But Not in the Way You Are Thinking

By Jim Bruene on March 22, 2007 5:38 PM | Comments (1)

If you've been reading this blog for long, you know I'm going through a "mobile" phase. There's two reasons for that:

1. It's an interesting and important extension to online banking, our core area of expertise.

2. I am in the process of writing two extensive reports on the subject, the first was published a few weeks ago on mobile banking (link here) and the second is due out by the end of the month on mobile payments.

FRONT: Wells Fargo credit card insert touting cellphone protection So I had to laugh when I opened by Wells Fargo credit card bill today, not at the size of the bill which was not at all funny, but at the insert that fell out pitching, "cellular phone protection at no cost" (see front of insert right, back of insert below).  

This is a different type of "mobile payment" than what I've been thinking about lately. But, this Wells Fargo program is brilliant, and has a much better business case, at least in the short term.

Here's what Wells Fargo is proposing:

1. Put your mobile phone bill on automatic payment via your Wells credit card.

2. In the event your phone is damaged or stolen, you will be reimbursed for up to $100 in damages, after a $50 deductible (see note 1).

The business case for this program looks fabulous. Assuming an average mobile phone bill of $60/mo x 12 months x 1.5% ROA = about $10 per year in revenue. While the cost should be just a few pennies per year in insurance payouts, given the difficulty in filing a claim. 

Even though the bank will pay out benefits to cardholders who had their cellphone charged to Wells even without the incentive, the bank should earn 10x to 20x the cost of the program each year. BACK: Wells Fargo credit card insert on cellphone protection Maybe Wells can put some of that windfall into a new mobile access to online banking and credit card info. 


1. To keep costs down, the maximum number of claims is two per 12-month period, $200 in total. And the claim procedure is  cumbersome, especially for a maximum payout of $100. You'll need copy of receipts, statements, other insurance coverage, police reports, and so on. The full details of the fine print are online here.   

Comments (1)

Beating Debit Card Fraud with Mobile Banking

By Jim Bruene on March 15, 2007 5:03 PM | Comments

ClairMail schematic of actionable text message alert 

There is no doubt consumers love debit cards. Despite cloudier fraud protections, no free float, and the confusion of "signature vs. PIN," growth continues at a 20% annual clip, with total U.S. transactions surpassing credit 15 to 18 months ago (see numbers here).

But continued negative press coverage could slow the growth. For instance, today's lead article in the Wall Street Journal's Personal Journal section, How to Protect Your Plastic, focused on recent debit card skimming incidents. 

What can a financial institution do to counteract the negative press?

1. Educate customers on their limited liability

2. Provide clear and understandable zero-liability fraud protection guarantees

3. Provide tools for monitoring checking accounts, such as transaction and security alerts

But once you have those "best practices" in place, you can still boost usage, and differentiate your debit card and checking accounts by integrating actionable text-message alerts (see ClairMail example above). 

While the industry-standard email alerts are helpful, the phishing epidemic, spam filling up the in-box, and  the time lag for reading and responding to bank emails, make them less and less effective for time-sensitive communications such as fraud alerts.

Enter the mobile phone. Most banking customers now keep a mobile device with "three rings" of their person much of the day, and almost always when out of the house. Therefore, a real-time text message each and every time a debit cards is used, will go a long way towards making users comfortable that their card has not been comprised. And in the event their is a fraudulent transaction, a quick text message back to the issuer can lock the debit card down, avoiding any additional unauthorized transactions.

This is about as win-win as you can get in banking. The user is happier with his debit card leading to increased loyalty and more debit transactions, boosting both short- and long-term revenues for the bank, credit union, or card issuer.

For more information see our latest Online Banking Report, Mobile Banking & Payments 2.0 (OBR 138/139).


In 2006, 86% of credit card direct mail included online options

By Jim Bruene on March 5, 2007 11:13 AM | Comments (4)

Advertising-monitoring firm, Mintel Comperemedia reported last week that nearly 9 out of 10 credit card solicitations in 2006 directed recipients to the Web, up sharply from 56% in 2003 (see note 1, 2). Several big mailers, namely American Express, still seem reluctant to use website response as an option, at least in the mailers we see at our house.

American Express tests must show a drop in response by offering too many choices. But if you don't have the budget of American Express, which can afford to drop a mail piece in every credit-worthy household every two or three weeks, you should add website options to your direct mail creative. That way, you can at least capture a lead at your website, even if they don't ultimately accept your credit offer. 

Total mailing volume for 2006 was 9.2 billion pieces (see note 1), or about 3 per week per credit-worthy household. Two of those were from the five largest mailers listed below which accounted for more than 60% of the volume, according to Comperemedia. JPMorgan Chase accounted for 18% on its own. 

In another data slice from Comperemedia, cited by Capital One in a Feb. 2006 investor presentation (PDF here), response rates have fallen from 1.4% in 1995 to 0.3% in 2004 (see note 3).

Here's a breakdown of the billion-piece club, and their percent change compared to 2005:  

1. Chase >>> 1.7 billion (down 4%)

2. Capital One >>> 1.2 billion (up 13%)

3. American Express >>> 1 billion

4. Citibank >>> 980 million (down 2%)

5. Bank of America/MBNA >>> 920 million (down 17%)

Other top-10 mailers: HSBC (up 25%); Discover (up 29%); Barclays Bank (190 million, up 70%)


1. Comperemedia tracks mailing volume for more than 150 large financial institutions. So the figures here do not include mailings from thousands of smaller banks and credit unions. In total, those probably account for less than 5% of the total from the top-150. 

2. Comperemedia press release is here. Interview of Comperemedia director Jenny Roock by MediaPost is here.

3. Credit card response rate slide from Capital One's investor presentation (PDF) at the Debt & Equity Conference, Feb. 2006; data from Comperemedia.

Credit card industry response rates

Comments (4)

Citibank Mobile Banking Delayed Until April

By Jim Bruene on March 2, 2007 11:03 AM | Comments (1)

Citibank mobile credit card access in Japan In a multi-page look at mobile banking (here), reporter Laura Bruce quotes Citibank's Rob Julavits as saying the bank will be:

...testing (mobile banking) in March and allowing customers to enroll in April, with a broad launch expected before midyear

That's a few months later than originally expected. The bank sent Citi Mobile disclosures to checking account customers in January indicating the service would be live in February (see article here). Citibank already provides mobile access to its credit cards in Japan (link here).

Comments (1)

Email: Bank of America's "Ring in the New Year" Credit Card Balance

By Jim Bruene on December 27, 2006 7:59 AM | Comments

Here's a timely email from Bank of America, inviting its credit card customers to start the year off with a 3.99% balance-transfer offer. But the savings won't last long, since the rate resets after August 2007.

Here are the specs:

  • Subject: Use your Bank of America® credit card today.
  • From: Bank of America []
  • To:
  • Product type: Credit card balance transfer
  • Offer: 3.99% through August 2007 (cash advance fee NOT waived)
  • Customer type: Mailed to current credit card customers
  • Personalization: Full name and last 4 digits of account number


Email body

Bank of America email with 3.99% credit card balance transfer CLICK TO ENLARGE

Landing page

Bank of America landing page from credit card email CLICK TO ENLARGE


Holiday Gift Ideas From My Bank?

By Jim Bruene on December 4, 2006 10:49 PM | Comments

Link to ING Direct store Who'd have guessed banks would become a popular source of holiday gifts, other than good old-fashioned greenbacks of course?

Now that niche audiences can be targeted with online promotions during the holidays, many financial institutions are marketing financial products packaged as gifts. Prepaid Visa/MasterCards are the hottest item, but there's also potential in other areas. 

Gift cards
The second most popular gift item this year, after apparel, is expected to be prepaid cash cards. While the majority of the $20+ billion purchased will be direct from retailers, hundreds of banks and credit unions, such as Boeing Employees Credit Union (BECU) have joined the fray (see email below). If marketed right, financial institutions could gain a significant share of total sales. See our previous post here about integrating gift cards into online banking for more information.

Boeing Employees Credit Union gift card email BECU CLICK TO ENLARGE

Credit reports
is taking advantage of the giving season to market credit reports and/or FICO score gift certificates. The cost is $20 for a three-bureau credit report, $15 for the FICO score and explanation, or $30 for both (see email below). An even better gift would be a year of credit monitoring.

Equifax email for credit report gifts CLICK TO ENLARGE

Investment accounts
For years, ShareBuilder has marketed "the gift of stock" during the holidays. This year, many of its partners, such as National City Bank, are offering a $50 gift card as a bonus for new accounts (see screenshot below). That way grandma and grandpa can give junior something that's good for him, an investment account for the future AND something he'll actually like, $50 to spend at the mall.

National City Sharebuilder landing page CLICK TO ENLARGE

Piggy bank 2.0
The Savings Machine from ING Direct For the younger set, ING Direct has for a year been selling The Savings Machine, a toy bank/calculator/ATM machine. And judging from the note on its website,* it's proving to be a popular Deal of the Month with a lower $17.95 price tag which includes free shipping (see inset). Several years ago, ING Direct reported nearly a million dollars in sales from its online merchandise store <>, an inexpensive way to get its name on the street.

*Note by the "Savings Machine" product page today: All orders placed from 4 Dec to 11 Dec will be shipped out the week of 11 Dec due to the large amount of backorders.


Boeing Employees Credit Union Email: "BECU Gift Cards Make the Perfect Holiday Gift"

By Jim Bruene on November 28, 2006 8:51 AM | Comments

Boeing Employees Credit Union <> starts the holiday shopping season off with an email pitch for its prepaid MasterCard gift card. At $2.50 each, they are a bit less expensive than one hanging in Safeway for $4.95. However, the CU neglected to disclose dormant account fees, a significant issue with consumer advocates.

It's too bad you can't order the cards online. Ideally, members should be able to order with a single click (or two) right from within the online banking function. Maybe next year.

Screenshot (click to enlarge)

Boeing Employees Credit Union (BECU) email CLICK TO ENLARGE


Type: Marketing email for prepaid debit
Product: Prepaid debit cash card (MasterCard)
Offer: None (cost is $2.50 plus the cash value)
Customer Type: Sent to nonmembers
Personalization: None
Links: None
Call to action: Toll-free phone, branch


Date received: Tues 11/28/2006 6:08 AM
From: BECU []
To: Jim Bruene
Subject: BECU Gift Cards Make the Perfect Holiday Gift


  • Even if gift cards cannot be ordered online, the credit union should include a link or URL for more information. Since many email recipients will automatically go to BECU's website to purchase, it would be helpful to specifically mention the cards cannot be ordered online, and why.
  • The opt-out and CAN-SPAM disclosures could be better designed.
  • Add disclosures for any monthly fees that kick in if the value is not used by a certain date.

Chase Fails to Design Email for Outlook's Preview Pane

By Jim Bruene on November 9, 2006 9:56 AM | Comments

More than 70% of business-email users view most or all of their email messages in the preview pane.* Depending on screen size, resolution, and window sizing, the real estate available in the preview pane can be relatively small.

When designing messages, be sure to put the most important information in the upper-left corner to maximize visibility in the preview pane.

Here is a poorly designed email Chase sent to confirm posting of a credit card payment. It requires users to scroll right to view Chase's logo and log-in button. Here's how it looks on my 12-inch laptop screen running at 1024 x 768:

What not to do from Chase:

Chase email alert

Better design from Bank of America graphics flush left:

Bank of America email alert CLICK TO ENLARGE

(Note: BofA shows the last four digits of your account number; we changed them to xxxx in the screenshot above.)

Action Items
Even though it's just a routing email message, the poor layout makes it look like a phishing message. Chase could clean this up with just a few minutes of programming work. While they are at it, they should add a personal greeting and additional text disclosures to make it look less phishy. 

*For more information, read our Online Banking Report #129/139, Email Marketing for Financial Services.


Bank of America Uses Radio to Drive Website Credit Card Applications

By Jim Bruene on November 7, 2006 9:23 AM | Comments

At 8:30 AM today, we heard an unusual advertisement on classic rock radio for the Bank of America Alaska Airlines affinity card.

It wasn't the ad itself that was so spectacular, although it's not every day that you hear credit cards being pitched on radio. And it wasn't the offer that made the ad stand out, although 20,000 bonus miles is a pretty good perk.

What made it memorable was the call to action, "visit" They didn't even bother to throw an 800 number into the spot.

It's hard to say whether a radio spot will prove cost effective, but using a memorable URL should help. It's far easier to remember than a telephone number, and prospective applicants can be immediately greeted with an effective sales pitch reinforcing the product benefits and bonus offer.

Google results for "my alaska card" However, once again BofA stumbles with its search engine support (see previous article). Searching on Google for "my Alaska card" brings up a single ad for a Web-based portal site, (click on inset for closeup).

In fact, we tested every variation of "my" + "alaska" + "airlines" + "credit" + "card" and BofA was nowhere to be seen UNLESS we dropped "my" from the search query. Interestingly, Chase was an aggressive advertiser on several of the search terms offering a competing airline card with 15,000 bonus miles. BofA showed up as an advertiser only when we dropped the "my" from the search query.

The lack of advertising against "my alaska card" is especially damaging because the first few organic search results do not link to BofA or Alaska Airlines. Also, if you type a similar URL, such as or you either end up at a generic link site or an error page. At this point, potential prospects will either apply at the wrong place or give up on the search. 

If you correctly input the exact URL, you end up at the following landing page. It's OK, but should reinforce the impressive benefits of applying now, a free ticket right away and a $50 companion ticket every year on renewal (see screenshot below).

Action Items
Here's what you should do to ensure better search-engine support for your offline advertising:

  1. Advertise at search engines on likely search terms that would be used by consumers responding to your advertising
  2. Create a memorable URL that is not easily mistyped
  3. Register or purchase domains similar to the advertised URL (including common misspellings), or pay the owner to refer traffic to your landing page
  4. Design a landing page that boldly supports the benefits in your advertising and includes a prominent "Apply" button

BofA landing page for


PayPal's 30-Second Credit Card Application

By Jim Bruene on September 15, 2006 3:07 PM | Comments

Paypal_card_ad_1 PayPal is advertising its PayPal Plus card with this box located in the upper-right of the main account start-page within the secure area (click screenshot below for a closeup).

With the falloff in response to traditional direct mail raising acquisition costs to $200 or more, a pitch delivered within an online banking session can be far less expensive. And with online banking users typically wanting to get in and out quickly, the 30-second response shows that the company is sensitive to the time constraints of its customers (notice they did NOT say that it was a 30-second process).

Paypal_pluscardThe PayPal card is issued by GE Money Bank, the same company behind PayPal Buyers Credit used by sellers to offer longer-term financing of major eBay purchases. The Plus card includes a free rewards program offering 1 point per dollar purchased. The current rewards structure includes three levels:

  • 1,000 points – Free shipping up to $7 on a PayPal purchase
  • 2,500 points – $25 voucher (for merchandise at most PayPal merchants)
  • 9,500 points – $100 voucher (for merchandise at most PayPal merchants)

The card carries a variable rate from 14.24% to 24.24% and has no annual fee.

Here's the main account page displayed after login:


Here's the landing page displayed after clicking on the apply button:



MBNA's Big & Ugly Card Application

By Jim Bruene on September 11, 2006 1:51 PM | Comments

In direct mail, sometimes "big & ugly" beats "short & sweet." But when it comes to preapproved credit card applications, we're pretty sure the 8-screen form posted by Bank of America's FIA Card Services (formerly MBNA) isn't going to help improve response rates (see the full form by clicking the continue link below).

My wife received a preapproved, direct-mail offer from Fidelity Investments where she has an investment account. The solicitation included the usual one-third sheet mail-back "acceptance form." Recipients could also either call a toll-free number, or go online to

Fidelity_mbna_cardapp_firstThose that went online were greeted with this almost-blank screen operating under a different URL and had no reassuring message or graphics to assure users they had not arrived at a phishing site.

Fidelity_mbna_cardapp_subsetAfter entering the 6-digit code from the mailing, prospective cardholders are transported to this boring form, which surprisingly includes MORE fields than its paper-based counterpart (click on inset for closeup; click on continuation below to see the full 800 x 5200 screenshot). For example, it contains a section to be completed by students, who are unlikely to be receiving this particular Fidelity Investments WorldPoints Visa card with no preset spending limits.

Not only are the layout and design dull, but also two major design flaws are readily apparent:

  1. No reinforcement of product benefits above the fold, especially the "0% through Nov. 2007" offer
  2. No division into smaller segments, the first of which should gather the email address

See Online Banking Report #104 for more on application design.

--- JB

Endnote: Full online application (820 x 5200)



Citibank Leaves Card Applicants Vulnerable to Identity Theft

By Jim Bruene on August 7, 2006 2:39 PM | Comments

We were impressed with Citibank’s full-page ad in Sunday’s New York Times travel section offering 25,000 miles to take a new American Airlines co-branded credit card. As usual, we looked for a link to the Web-based application and were pleased to find a large, reverse-type URL along the bottom of the ad. Unfortunately, Citi did not follow the usual convention for printed landing-page URLs, creating potential problems for applicants.

Typically, offline advertisements use a special filename after the normal domain name, such as <>. This allows users to go directly to the landing page explaining the special offer (see landing page below).


Instead, Citibank used the unique server name "miles5" as in: <>. There are several problems with this approach. First, it’s long and not easily recalled. But the biggest problem is its non-standard format. Internet users do not expect to see an extra period in the middle of a bank's URL. So many users, myself included, may read this as a unique domain name, <>.

Normally, that would be okay. But in this case Citibank neglected to register that domain name. An identity thief could easily have registered that domain, and then taken “applications” for days or weeks before anyone caught on, possibly leaving hundreds of applicants vulnerable to identity theft after entering their personal info, including social security number, in the application.

By mid-day on Monday, almost two days after the ad first appeared in print, the domain was still unregistered. We went ahead and registered it to prove the point, and keep it safe.

The moral of this story: If you live in a glass house, make sure any transparencies are covered. Register your domain name. Citibank, which has spent millions on its anti-identity theft campaign, left itself and its customers vulnerable for the price of an $8.95 domain name. Make sure you register the domain name of any cute URLs you put out there for marketing campaigns. While you are at it, spend $60 and lock it up for 10 years. 

Memo to Citibank’s legal team: We have no commerical interest in the domain and will happily transfer it to your ownership. All we ask is reimbursement of our 9 bucks.



Getting Even with the Citibank Call Center

By Jim Bruene on July 11, 2006 2:18 PM | Comments

     Tom Brown -- 1
     Citibank -- 0

How many times have you been frustrated by your experience at a call center? Well, if you were a multi-millionaire hedge fund manager with his own blog, you could get back at the company, and then some.

Read today's extremely thorough account (transcribed verbatim from a tape recording) of Second Curve's Tom Brown as he attempts to add a PayPass contactless debit card to his Citibank account <>.

A couple lessons here:

1. Flag Tom Brown, and other influential VIPs, in your customer database so they get topnotch phone service
2. Be careful with geographic-based product rollouts to avoid irritating customers
3. Simplify call center scripts



Disposable Debit Cards

By Jim Bruene on July 10, 2006 1:59 PM | Comments

Discover_disposablenums_cardAlthough they've been around for years, with relatively little success, the time may be right for disposable card numbers. However, this time, the emphasis should be on debit, the payment of choice for many younger consumers.

A compelling case can be made for disposable debit which:

  • is the favored payment vehicle for the under-30 crowd, and often the ONLY payment option for high school and college students
  • differentiates your checking account from 16,000 other U.S. providers
  • encourages more debit card usage
  • cements account relationships
  • adds value to online banking archives
  • provides excellent PR (customer advocacy) and branding benefits

But while great strides have been made in educating consumers about credit card fraud protection, the issue is murkier on the debit side.

Consumer appeal
We were reminded of the appeal of disposable card numbers when reviewing Cambrian House <>, a Web-based venture attempting to "open-source" the business-startup process. While we don't see that taking off, the company does maintain an interesting database of user-submitted business ideas. Of the 433 ideas listed, the most popular according to site visitors is:

Self-destructing credit cards submitted by Rohan Pinto

Discover_disposablenumsEssentially what Mr. Pinto is proposing is the one-time-use credit card number offered since the late 1990s by Citibank, American Express, and, more recently, Discover Card (see inset). The main difference is the name, which actually is pretty good, if it hasn't been trademarked yet (we couldn't find any business using the term in a quick Google).







Update on EmmigrantDirect

By Jim Bruene on March 28, 2006 10:33 AM | Comments

Emigrantdirect_card_websiteHow does a small bank rate a WSJ-bylined story when it ups its credit card reward percentage by 15 basis points? Sure, it helps to be headquartered in NYC, home to much of the country's financial media. But you also need a compelling story line.

What could be better than a small player eating the big guys' lunch? Layer in the online-only factor, a strategy that had been declared dead by many analysts after botched attempts by Bank One (Wingspan Bank), Citibank (eciti), and Benchmark Capital (Juniper Bank). Finally, top it all off with a 150-year old company all of a sudden making like a Bay-area startup, and you have a story with real legs.

EmigrantDirect, the direct-banking unit of Emigrant Savings Bank, once again landed in the media (WSJ Mar. 28), with a relatively small change to its credit card launched earlier this year. It's the second time this month, and sixth this year, that the bank has been mentioned in personal finance articles in The Wall Street Journal.

This time the story highlighted EmigrantDirect's credit card, touted on its website as America's Highest Cash Back Card, that now pays a cash rebate of 1.4% on all retail purchases, up from 1.25% earlier (see note 1). The fine print on the claim says that other cards may pay a higher percentage, but they require minimum purchase levels before the higher rebate kicks in (see note 2).

Since the launch of EmigrantDirect a little over a year ago, the bank has raked in $6 billion in deposits and 225,000 accounts for an average balance of about $27,000. The direct-banking unit's success essentially doubled the deposit base of the bank in a single year, halting a gradual decline in total deposits over the previous decade.

It will be interesting to see how Emigrant reacts as more banks enter the market such as Washington Mutual (NetBanker Nov. 18, 2005) and Puerto Rico-based Popular that is planning to go after U.S. deposits under its own name and that of its well-established E-Loan brand. For more information, refer to last fall's report, Lessons from the High-Rate Marketers (OBR 120/121).


1. Interestingly, the higher rebate is retroactive to Jan. 2006, an unusual bit of financial services generosity.
2. Another bit of crucial fine print: The EmigrantDirect card requires a $10,000 average deposit balance FOR THE PAST SIX MONTHS in order to earn the rebate.


Online Card Receipts from American Express

By Jim Bruene on March 27, 2006 9:47 AM | Comments

Amex_print_options_boxDo you ever wonder why American Express, with fewer merchant outlets and higher prices, continues to command a 17% share of all U.S. debit and credit card volume (see note 1)?

Sure, the company's powerful brand supported by vast and memorable advertising is a factor, but it's also the product it delivers, optimized for business users and other big spenders. And the company never rests on its laurels. Even though I'm a light user, in 11 years of card ownership, I've received on average one card, letter, or email message every week, for a total of more than 500. The company does not let you forget about them.

Amex_printable_recieptAmerican Express also continually improves their product. For example, the latest innovation, announced in an email today (click on inset left), is a minor new twist in online delivery. Cardmembers can go online and easily print receipts, one page per transaction, to be used to match up with other paper records, invoices, expense-reimbursement requests, and the like.

Simple instructions in the email message explain how to use the new option, one of three choices in the Print Options box (see inset upper left) located in the upper-right corner of the main Summary of Accounts page, the default shown after login (click on screenshot below for a closeup of the Summary page).

Amex_print_options Will handy, printable receipts win American Express any awards? Hardly. It barely rates a bullet point in a brochure. But these little things all add up when cardmembers make the decision as to which piece of plastic to pull out of their wallet or purse. 


1. Market share of all purchase volume on MasterCard, Visa, Discover and American Express credit and debit cards during first half of 2005 (Source: The Nilson Report, Aug. 2005, #840)


Bank of America's Preapproved Card Offer at Logoff

By Jim Bruene on February 23, 2006 9:39 PM | Comments

Bofa_instantcredit_atolblogoutBank of America is making it super easy for online banking customers to accept a new business platinum credit card. The preapproved offer is displayed after logging out from an online banking session. In this example, we had just finished paying our Bank of America credit card bill and were greeted with well-crafted page shown here (click on inset left for a closer view).

Using the log-off screen is a great way to get your preapproved offers in front of users at just the time they are thinking about their finances. We also recommend offering a link to the offer within the online banking area. That way, if a user is running a bit low on cash, for example, while paying bills, he or she could click on the offer to obtain additional cash.



Billeo Powers Bill Pay at

By Jim Bruene on February 14, 2006 11:57 AM | Comments

Visa_billeo_searchboxLast week, Visa USA redesigned its direct bill-pay area using Billeo's technology to power biller search and facilitate direct payments via credit card. It is a major coup for the fledgling direct bill-pay solutions provider Billeo, which earned an Online Banking Report Best of the Web last year for its innovative bill-pay toolbar (OBR 116/117).

The implementation at Visa bears careful review. It wisely uses biller search to engage users (see inset), then prompts them to save their personal biller list using Billeo. After registering, users download and install the toolbar directly into their browser, Billeo_visa_mainthen input credit card information to facilitate payments. After the initial setup, users can pay select bills directly from the toolbar using the saved credit card and biller info.

Next week, we'll look at Visa's implementation in more detail and share insights from our conversation with Billeo founder, Murali Subbarao. In the meantime, you might want to give it a spin yourself at Visa's bill-pay site, <> (click on screenshot right for a closer look).

Previous articles:



Bank of America's "Keep the Change" Banner on MSN

By Jim Bruene on February 13, 2006 9:50 AM | Comments

Bofa_msn_homepageAlthough we have concerns about the underlying program (see NetBanker Oct. 5, 2005), you have to tip your hat to the marketing execution of Bank of America's Keep the Change campaign. Today a small but distinctive postage-stamp ad on MSN's homepage, tied in with MSN Money headlines (see inset), invites readers to "Open a Checking Account and Keep the Change."

Bofa_msn_landingpageIt's an intriguing headline and likely does well prompting clickthroughs. The landing page (click on inset right for a closeup) is also well done. A graphical explanation of the keep-the-change rebate is shown on the right, which helps alleviate the need for prospects to wade through the 479 words of fine print on the bottom of the landing page.

Another landing-page graphical element that you should immediately consider adopting: pictures of the three key banking products being pitched with simple checkboxes for selection (see below). However, in this case it's used in a backwards fashion. Users are supposed to tell the bank which accounts they already have, rather than the ones they want to buy. This is counter-intuitive and should be redesigned.


Bofa_msn_ddasav_appAfter selecting the BofA accounts already owned, users arrive on a secure Checking & Savings Account Application page that does a good job reinforcing benefits and referencing the original "Keep the Change" hook (click on inset left). A pop-up box offers live chat with a Deposit Specialist if desired.

The bank scores high for great online copywriting, superb graphics, and good ad positioning at MSN. We also like how Bank of America reinforces the benefits of automated savings. However, the offer is complicated and smacks of a gimmick that will do little to engender long-term loyalty or create a real savings ethic. Finally, the low 0.50 percent rate paid on the underlying savings account damages the program's credibility and makes it less likely the account will be used to amass meaningful deposit balances.

A+ for online advertising and sales (banner, landing page, application)
B+ for encouraging savings
C- for the debit card rewards program


Payment Cards Watershed - MasterCard IPO

By Jim Bruene on January 13, 2006 4:01 PM | Comments

This should be a watershed year for payments cards. The approaching MasterCard IPO, and Visa's likely response, will likely reform the sector's fundamental business structure. Meanwhile, First Data Corp. is undergoing profound changes, and it's unlikely that either Discover or American Express will be twiddling their thumbs while the future of the card associations is decided.

The MasterCard IPO will likely have the greatest impact on the space, thinks David Evans, founder of Market Platform Dynamics. "It will force them to become a much more entrepreneurial and different organization than it's been in the past, partly because of changes in the marketplace, but also because of organizational changes that will change the dynamic of that entity," because of the need to satisfy its new investors, he says.

Continue reading "Payment Cards Watershed - MasterCard IPO" »


Low Value Payments & Stored Value Cards

By Jim Bruene on January 13, 2006 3:21 PM | Comments

In the coming year, low-value payments and prepaid cards will be increasingly mentioned in the same breath, especially in conjunction with off-line, contactless methods, says Gwenn Bezard, partner in Aite Group.

Pilots, and even some deployments of contactless payment cards, will be making a significant appearance, if only because banks are pushing them. The main sticking point from the merchant perspective, Bezard says, will be the cost of interchange, but he expects some banks to offer breaks on fees, if only to give the venue a running start. He is optimistic that big merchants will follow Starbucks’ model and offer rechargeable, merchant-specific stored-value cards as a means of gaining market share and promoting customer loyalty.

Continue reading "Low Value Payments & Stored Value Cards" »


Platinum Upgrade from American Express

By Jim Bruene on December 13, 2005 7:48 AM | Comments

Despite intense competition from MasterCard and Visa issuers, American Express has been able to maintain a substantial share of the high-end market for credit/charge cards. For the twenty years we've followed the company, its marketing has consistently conveyed an upscale image.

Amex_email_premium_serviceCase in point: The email we received today asking us to upgrade from our existing Gold Card to an American Express Platinum (click on inset for a closeup look).

The subject line said it all:

     Upgrade to a card with premium service

The benefits cited included:
* Complimentary airline ticket on any of the 18 participating airline partners
* Airport club access (Continental, Delta, Northwest Airlines)
* Hotels & resort special privileges
* Free Membership Rewards program
* By Invitation Only (privileged access and tickets to events that, in many cases, can't be purchased through any other source)

The American Express solicitation is heavily oriented towards travel and entertainment benefits which plays to the company's strengths. A bank could do the same by concentrating more on the "premium service" aspect. For example:

  • Front-of-the-line service: Your service request, whether by email or phone, always goes to the front of the queue
  • Branch manager access: If you ever need to go direct to the top for any reason, just call (212) 555-1212 or email
  • Preferred access to product specialists: If you ever have an unusual problem, whether it be accessing your online banking account from your laptop, or how to fund your Roth IRA, we will connect you with a specialist with state-of-the-art knowledge in that area
  • Ft. Knox security: You need not worry about the safety and security of your bank accounts with our upgraded security and authentication algorithms

For more ideas, see "E-Service 2.0" (OBR 105/106).


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).


By Jim Bruene on November 15, 2005 1:23 PM | Comments

Ebank_ambankerOn the front page of today's American Banker and on the cover of its Retail Delivery pullout section (see inset), there is an eye-catching EBANK logo presented in eBay's distinctive font. It's an intriguing lead-in to an otherwise predictable story on eBay's PayPal unit and the extent to which it competes with banks. (Note: For American Banker, the cover graphic gave it more "street appeal" so that the paper was more likely to be picked up by the thousands of attendees at BAI's big technology conference in Orlando.)

This is an old story. PayPal has offered a suite of consumer banking services for more Payment_choices_1than four years (click on table below) including debit cards, bill payment, credit card (issuer), consumer finance loans, credit card processing, ACH processing, money market mutual funds, international payments, interbank transfers, fraud protection, and insurance for funds on deposit. The only new service this year is the credit card payments gateway business it purchased from VeriSign earlier this year; though that is more of a line extension than a new business.

Paypal_timelineYes, PayPal competes with bank, primarily in merchant processing, an area most banks got out of more than a decade ago. And we'll see more ecommerce players, such as domain registration services company GoDaddy, offering integrated PayPal payment options (see inset). However, none of PayPal's other financial service offerings have a measurable market share, and are unlikely to be causing any lost sleep by execs at Bank of America, Citi, or any other financial institution.

The American Banker article speculated on eBay's interest in moving further into banking by buying a charter and opening a full-service Internet bank. But no evidence was presented for either side of that argument, nor did the author find any industry analysts to comment.

It reminds me of the "controversy" in the mid-90s about Microsoft competing against banks. Although it was mostly fodder for the trade press, we debunked the notion In the very first issue of Online Banking Report (April 1995). There was no way that a successful software company, accustomed to 50%+ margins, would invite the regulatory scrutiny and compliance hassles of the relatively low-margin banking business.

Although eBay has done some strange things, such as jumping into the telecom business via its recent Skype acquisition, we seriously doubt that the auction giant has any plans to open or even lend its name to a full-service Internet bank. It doesn't need those regulatory and compliance headaches.

However, the company will continue to exploit areas of ecommerce, like auction payments and auction purchase financing, that are not well-served by existing players. But if you've put together a franchise that can hold its own against BofA/MBNA, ING Direct, and Schwab, you have little to fear from eBay or Microsoft. In fact, there are opportunities to leverage these trusted brand names to INCREASE your revenues. For example, PayPal provides developer tools that would allow a bank to integrate with the online payments provider to facilitate financing for bank customers.

Previous articles:



E*Trade "Debit Card" on Google

By Jim Bruene on November 2, 2005 4:24 PM | Comments

As we searched Google today for debit card info, we noticed E*Trade on top of the paid search results with an AdWords listing entitled Platinum Visa Debit Card (it was the first "banner" on the top of the search results).

Etrade_landingpage_debit_on_google_1Interestingly, clicking on the link takes you not to a single-product pitch for a debit card, but to the broker's E*Trade Complete product which combines brokerage, banking, and lending into a single offering (click on inset for landing page screenshot).

Note: The graphic image appearing in the middle of E*Trade's landing page features a check, debit card, and security token overlaid on a screenshot of its online banking area.

Showcasing its Complete product on debit card searches shows good mastery of search engine marketing by E*Trade. The online giant figures the type of person searching on debit cards will be intrigued by the total control promised by the package account. The out-of-scale security token also adds a reassuring touch to the image (see inset). 

-- JB


Debit Card Volume Passes Credit Card (or did it?)

By Jim Bruene on November 1, 2005 2:31 PM | Comments

DebitcardFor years it’s been a matter of when, not if, the number of debit card transactions would surpass credit cards for purchases in the United States. Depending on who's doing the counting and how you define the market, debit surpassed credit:

a) in 2000
b) in late 2004
c) not yet, but by early 2006

a) Dove Consulting as announced in its Oct. 25 news release with The American Bankers Association; includes volume of purchases made in-store only; projections built on research with 3000 consumers
b) The Nilson Report, Sept. 2005 (#842); includes any purchase transaction, in-store, phone, or online; projections built on industry data, much of it provided by the major card brands; credit totals include card purchases made with proprietary cards, such as oil or department stores; debit totals include signature- and PIN-based traditional debit card and prepaid cards
c) SourceMedia's Cards & Payments, Oct. 2005 citing data from its sister publication, ATM & Debit News; projections built on industry data and like Nilson includes proprietary store cards in the credit totals and signature- and PIN-based transactions in debit

The Numbers
The Nilson Report had debit ending the year with 19.7 billion transactions, 600 million more than the 19.1 billion credit card transactions (see note 1). Market share was 51% for debit, 49% for credit. Whereas ATM & Debit News showed credit transactions still running ahead of debit, with 22.1 billion for credit and 17.5 billion for debit (see note 2). For 2005, they project 23.5 billion for credit and 21 billion for debit. Extrapolating from the growth rates, debit should surpass credit in late 2006.

The total dollar volume of charges will continue to be dominated by credit. With more than double the average transaction size, $84 vs. $37 for debit, the share of total dollars spent was nearly 69% for credit vs. 31% for debit, according to Nilson.

It’s helpful to look at these huge numbers on a per household basis. Across all 108 million U.S. households, the average annual number of debit and credit card transactions is 360 per year, or 30 per month.

Looking at debit only, the average across all households is 180 transactions per month. But considering that only about 60% of the country is an active debit user, the average per active household is closer to 300 per year, or almost 1 per day. Unlike credit transactions which are divied up among the 12 cards carried by the average customer, many of the debit transactions occur with plastic from the customer's primary financial institution. This creates a rich data stream for online banking statements and analytics.

As good as this debit data stream is, it's only half the picture without the credit card transactions, especially since the larger purchases still tend to go on a credit card. This is one of the places where account aggregation could play a key role by offering a simple way to aggregate all card transactions into one online storage facility. The full picture, incorporating all plastic volume, will create an information stream that is highly valued and difficult for competitors to match. And by knowing you customers card habits, you can make successful pitches to steal the receivables from competitors.

  • Debit rewards: Although debit card spending is not as lucrative as credit cards, especially with the downward trend in debit interchange, major players are still looking to reward spending. Yesterday we looked at Citibank’s ThankYou Points program that offers 1 point for every $2 of spending on signature debit and 1 point for every $3 spent on PIN-based debit. Assuming that two-thirds of debit spending goes to signature, the average customer would earn about 3000 points per year, valued at $25 if redeemed for a gift certificate or $50 if saved and used towards a $400 coach ticket (25,000 points required).
  • Credit line cross-selling: How do you make debit cards as profitable as credit cards? Attaching a line of credit to the account. Overdraft credit lines are extremely popular and are even more desirable with heavy debit users who increased transaction levels increase the chances of overdrafting the account. The increased outstandings could help fund a rewards program, therefore improving retention and increasing interest income at the same time.
  • Alerts and other messages: If you are a typical debit user, racking up 25 transactions per month, and with no 25-day grace period like credit card users, you will have a great appreciation for a bank that keeps you informed of your debit transaction flow. Transaction confirmations are the simplest and most valuable message. But there is also demand for more advanced alerts that would inform users when a debit card transaction appears out of character (possible fraud) or if holds from hotels or gas companies may significantly impact checking account balances. These value-added alerts could be packaged with rewards and lifetime statement archives into a premium online banking program priced from $3.95 to $9.95/mo (or $39 to $99 per year).

For more information:
Online Banking Report #96/97, Account Aggregation v3.0
Online Banking Report #118: Lifetime Statement Archives
Online Banking Report #109: Pricing (premium products)

The Nilson Report, #842, September 2005
Cards & Payments, Debit Card Report, Oct. 2005, pp. 22-26

1. The Nilson Report credit card volume includes Visa, MasterCard, American Express, Discover, proprietary store cards, and gas station cards. It does not include proprietary T&E cards such as Diners Club, Universal Air Travel Plan, car rental cards, or phone cards
2. SourceMedia's debit cards include Visa, MasterCard, and cards issued by financial institution and used through EFT networks.

-- JB

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