I've moved!

I've now moved my blog from Blogger over to a self hosted site at Sevendotzero. Blogger was a good place to start out writing online but I've been feeling increasingly constrained by Blogger's inflexibility. 

Plus I always have this nagging doubt that Google will send Blogger to that graveyard in the cloud where it will join its compatriots; Reader, Talk, Buzz, Wave, Notebook, Labs, Jaiku and many others.

I've moved all my historical content and the URL is still the same at sevendotzero.com. Thank you for all your support and I'm looking forward to continuing to share my thoughts with you over the coming years.

Mobile payments - where are we?

Originally published on Billing Views.

With Mobile World Congress in Barcelona upon us it seems opportune to review the state of play in mobile payments.

Mobile payments is one of those subjects that people have been talking about for ages, however the experience for most consumers is limited to shopping via apps or mobile websites, which is little different to using your laptop, apart from the smaller screen! Where mobile payments starts to get interesting is when your mobile device becomes an enabler to a simpler, frictionless payment experience. That could be sending money to a friend with Barclays Pingit or paying the dishwasher repairman with an iZettle MPOS device. Both experiences remove the need for cheques or for cash. Or that simpler, frictionless payment experience could be something we haven’t yet seen … 

Mobile handset based NFC has been the ‘next thing’ in mobile payments for a while now but has yet to gain traction despite the efforts of the mobile operators with numerous trials and proofs of concept. Handset NFC payments look doomed in my view for two main reasons - using a card for contactless payments is simpler; and without Apple’s support a major chunk of the handset market is out of reach. Apple’s position is still unclear but it now has so many payment components in place that a move into mobile payments can only be a matter of time - iTunes Store credit and debit cards, iCloud Keychain, TouchID, Passbook, iBeacon technology. Whether Apple will make a play in the payments space on its own or in partnership remains to be seen but when they do, it will be disruptive and it will change the market.

Another player who is aiming to disrupt the UK payments market with mobile handset payments is Zapp. Based on the existing banking payments infrastructure and using the bank’s own mobile apps, Zapp is aiming to offer a payment service for both online and customer present payments that operates outside the card scheme payment rails and delivers a secure (because no private consumer payment details are shared with the merchant) and cheaper (for the merchant) payment service. So far, five UK banks have signed up and I expect to see more following. With the backing of major banks and merchant acquirers Zapp stands a good chance of grabbing a piece of the UK payments market.

Digital wallets have been much talked about over the past couple of years and the concept has been stretched to cover a myriad of payment models, however for me a digital wallet provides a stored value account. In their mobile device based incarnations apps like PayPal and Starbucks have enhanced the payment experience but new players like O2 have failed because they didn’t offer the consumer something better.

MPOS schemes that enable card payments via Chip and PIN (like iZettle) or magnetic stripe swipe (like Square) are extending the ability to take card payments to anyone who takes payment face-to-face. With their much lower cost of merchant acquisition these providers have the scope to extend card payment acceptance into markets that historically could never justify the costs.

For me, the most exciting new trend in this space is around managing your entire banking relationship via your mobile phone. No more bank branches, no more phone calls - everything is available via your bank’s app. Moven in New York is pioneering this approach and it will have profound implications for the banks that have built their business on expensive branches.

Consumers don’t use payment products because they 'like paying' but because they provide access to goods or services. The key factor in determining the success of a new mobile payment product is whether it offers a better consumer payments experience than the method it intends to replace.  

Personalising your cards

Originally published on Billing Views.

Payments guru Dave Birch recently commented on his frustrations at receiving new credit cards that still have magnetic stripes, embossed numbers and names on them - all throwbacks to old technology. These features are still present to keep compatibility with non Chip and PIN use (e.g. USA) and manual ‘zip zap’ transactions. As Dave correctly points out, it was thanks to these features his last card was compromised and its thanks to these his next will be compromised!

Whilst the banks seem to be concerned about handing out cards to customers that aren’t compatible with every point of sale on Earth, they don’t seem to be taking the same care to make it harder for cards to be compromised. If the banks are not willing to remove these features from all cards (features that are redundant for the majority of customers) then they could at least allow customers to make the choice themselves. 

I should be able to log on to my bank’s website, select my card and choose the features it supports:

• So if I don’t want to use it outside the UK, I can have a card without a mag stripe and accept that if Chip and PIN fails for some reason I won’t be able to use the card but the card is much safer. 
• If I have a card I don’t want to use online I can request that all 'card not present' transactions are declined (and it doesn’t have a CV2 number).
• I only want my debit card card to work in ATMs and be declined if it’s used in a shop.

Maybe the ability to have certain types of transactions declined could be switched on and off at the customer’s convenience?

As well as being anti fraud this is all about product personalisation - being able to build the product that suits me. It’s time that the banks embraced this concept across a whole range of products. 

Consumer choice in banking

Originally published on Billing Views.

Last week the news was full of comments from a certain politician about UK banks being forced to reduce their market share by selling branches. However this idea sadly misses the point about how best to increase competition in the banking market.

If the banks are forced to dispose of branches they will likely want to lose their least profitable branches, thereby creating a pool of poor quality branches that no one will want to buy and that would not be sustainable on their own. If government intervention chooses the branches they will dispose of then that means the banks have lost all control over their business. To quote Dave Birch, politicians tend to think along the lines of ‘we must do something, this is something, therefore we must do it’.

Branch disposals force customers to become customers of a different bank whether they want to or not. In my case, despite the well publicised systems problems at NatWest (which to be fair have never affected me) I quite like the bank and the products I use (as far as they go). I would not be impressed if government diktat told me I was now a customer of a new bank. 

Forcing customers into new banks misses the point of creating competition and giving customers choice. What we need are new banks with new banking models. Take Moven in the US; Brett King has created a new, mobile centric banking model that is predicated on banking products that put the customer in control through empowering them with information that allows them to make informed decisions. That is creating competition; not hiving off a bundle of branches that offer me-too products to customers who don’t want them.

Banks should of course be allowed to close branches without government interference - it’s great news for them as it reduces their cost base.

What we need in the UK is a white label banking model that allows innovators and brands to create banking products without the problems of getting banking licences and the ongoing regulatory overheads. Licensing and regulation are the responsibility of the bank providing the innovators and brands with their products. One lonely example here in the UK is M&S Bank which combines the Marks & Spencer brand with HSBC provided banking; although that example is unfortunately still predicated on an in-store branch centric model. However, are banks ready to move to a white label model? The mobile operators did it with MVNOs so maybe the banks will.

Recent research from YouGov suggests that consumers want new engagement channels like online and mobile, not branches. The last attempt at creating online only banks in the UK failed, with providers like Cahoot, IF, Egg and Lloyds (scrapped before launch) failing to make much impact; however that was before fixed and mobile broadband became ubiquitous and consumers started to transact from mobile devices. This time around adoption would look very different. Mobile devices are everywhere and if consumers feel empowered by their apps they will use them. Technology will determine the future of the banks - it’s up to the banks to embrace it and the politicians to let them.

Will consumers Zapp?

Originally published on Billing Views.

This week Zapp announced the confirmed support from five UK banks and building societies  - HSBC, First Direct, Metro Bank, Santander, Nationwide. I've been following Zapp for a while now and this support from leading UK banks takes it beyond the concept stage and starts to make it a reality.

Zapp will allow consumers to pay in store or online, using their mobile phone and without the need for cash or cards. What makes it unique is that it operates outside the card schemes’ payment rails and it has the backing of major financial institutions who already have customers using their mobile apps. Because Zapp is part of VocaLink, the organisation that manages inter bank payments in the UK, it always looked likely to be   a mobile POS scheme that would get some market traction.

However the big question is will significant numbers of consumers start using Zapp? Will they make the jump from using cards to using phones? Whether you pay with Zapp or with a debit card, the funds come out of the same account. Debit card transactions are typically free to the consumer and Zapp transactions will presumably also be free. The banks will likely try to incentivise stores and online merchants to promote Zapp by making it a cheaper form of payment to accept (no card scheme interchange fee to be paid), however no one should ever underestimate consumer inertia.

The key factor to making it a success will be the consumer experience - any friction and a card will feel like a simpler option. One advantage phone based payments have over cards is the ability to provide a consumer with information at the point of purchase; that can be transaction based information, e.g. this month you’ve spent £50 so far in Caffe Nero, or promotional, e.g. there’s a half price croissant in-store today if you buy a coffee. However because Zapp will be integrated into the banks’ own mobile apps, rather than being a separate app, it will be up to individual banks to consolidate and provide that sort of information and do they have the systems to do it? Being part of a banking app will help adoption from customers (like me!) who make extensive use of banking apps but alone it won’t be enough. Zapp claims the payment process is more secure than existing methods because customer credentials are tokenised and not shared with the retailer in the way a card number is. Whether this will resonate with consumers remains to be seen - I suspect ease of use is what will make or break Zapp as far as consumers are concerned.

And of course, what about RBS NatWest, Barclays, Lloyds and TSB? Will they jump on board? 

Can we rely on just one provider?

Originally posted on Billing Views.

Yesterday as I was thinking about the RBS NatWest systems disaster and what it meant for their customers who were financially embarrassed when their cards were declined, I saw that my colleague Alex Leslie had posted an article on the catastrophe. Alex is dead right when he talks about ‘If technology is the infrastructure of the day – we are in trouble’.

I then read RBS CEO Ross McEwan’s comments, who said:

“Last night’s systems failure was unacceptable. Yesterday was a busy shopping day and far too many of our customers were let down, unable to make purchases and withdraw cash.

“For decades, RBS failed to invest properly in its systems. We need to put our customers’ needs at the centre of all we do. It will take time, but we are investing heavily in building IT systems our customers can rely on.”

So if RBS has failed to invest properly for decades we clearly haven’t seen the last of these problems and customers should assume they will experience more such issues.

Both these pieces got me thinking about the risks of relying on just one provider for essential day-to-day services, be they financial or telecommunications. I’ve never been happy with the idea of relying on one provider because it puts you at the mercy of the vagaries of their service – whether technical failures or perhaps they change their strategy and decide to withdraw service from you.

Despite everything (and to be fair it didn’t affect me) I actually like NatWest. I’ve got a decent banking package from them and their mobile app and online banking is as good as it gets (I’d like more from a bank, as I discussed in my last post but that’s another story!). However would I rely solely on their products – no! I have other providers that spread my risk and, importantly, give me options. Having options when it comes to card payments is vital, especially to avoid being caught out in a NatWest style debacle. Credit cards are a great option for some, especially as they provide greater legal protection in the UK, and for others prepaid cards are excellent (I must declare an interest here as Ukash issues prepaid cards).

Another example is in mobile communications. Twenty or so years after the launch of GSM we still suffer from poor coverage and limited capacity.   At peak times in London Bridge mainline station it’s impossible to get a data connection on O2 and in the surrounding area my handset spends more time on GPRS than 3G. And where I live? No O2 3G despite being close to the M25. Relying on one mobile device is a risk although with iPads and the like many people do have a second device, even if it’s not a phone. Just make sure they’re on different networks!

So despite the advances in technology (and perhaps because these advances raise our expectations) we still can’t rely with any certainty on the organisations that provide these services. So make sure you’re protected – now!

Taking the friction out of payments with mobile

A comment from me over on the Plusnet blog about mobile payments ...

Cyber Monday and the top 5 apps that will save you money

 “Mobile, whether it’s contactless, card or ecommerce makes it easier because it’s spontaneous, convenient and simple. My favourite example is Apple EasyPay. Just pick something off the shelf in store, scan the barcode, walk out of the shop. That’s frictionless payment.

“Improving payments is all about taking friction out of the process and doing it better than what went before. “

Steve Jobs on design

Another of my favourite quotes from Steve Jobs ...

"Design is not just what it looks like and feels like. Design is how it works."

What do I want from my bank?

Originally published on Billing Views.

Normally I write about something new that’s happening in payments but today I’m writing about something that isn’t happening!

The other day I was thinking about what I want from a bank. The banks we have in the UK today are little changed from the model that has existed for decades; fundamentally it is branch based. Everything else feels like an add-on, rather than part of the core. The banks are still branch centric and for those of us that don’t want or use branches we are still engaging with a bank that is driven by the branch based cost model. There are one or two exceptions however they suffer from limited product sets and apps with reviews that reflect the fact they don't understand digital engagement!

I want a bank that is built from the app up. I want to be able to do everything in the app from setting up new payments to depositing the occasional cheque that I still receive thanks to the banks inability to lay them to rest. I don’t want to subsidise unprofitable branches that are used by other customers. I’m happy to pay with a card but I want to see my expenditure appear in the app in near real time, by merchant, by category, so I know where I am with my money. I want to build my own service package on my handset in real time. Is this all too much to ask? In the current world of banking it seems to be. There are glimmers of hope out there with people like Moven doing some very smart stuff in the US. But here in the UK it’s a depressing outlook. Even the new players are wedded to branches - look at what Metro Bank is doing; some beautiful branches but no apps and limited online banking. TSB? Same outfit, new (old) brand. Williams & Glyn’s? Still on the drawing board.

Yes it’s difficult to break into banking but the white label model of Moven and Simple proves it is possible. If they can find the right partners to launch in the UK I’ll be at the head of the queue to open an account!

Product innovation and Steve Jobs

Wise words from Steve Jobs ...

"You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new."

What do you do with your passwords?

Originally posted on Billing Views.

Something that affects all of us in both our business and personal lives is password security. As we do more and more online, especially in the payments space, we have to remember an increasing number of passwords. It seems like every week there's another website security breach (and I always wonder about the ones we don't hear about!) which makes it vital to keep everything unique. You really don't want that password from a hacked shopping site letting a malefactor get access to your corporate servers, your bank account or even your Facebook profile - it's not going to end well. 

Managing all these IDs and passwords is a huge challenge and the only way to do it in a secure manner is via an encrypted database app. What surprises me is that more businesses don't mandate the storage of passwords securely.  Employees are told to keep them secret but how? Relying on human memory is a risky strategy and the result is employees using the same password across multiple applications and quite possibly putting them on Post-it notes!

I've been using 1Password across my iPhone, iPad and Mac for a while now and last week Agilebits released their new version for the Mac - 1Password4. This is a significant upgrade involving a complete rewrite of the code and adding both a new look and new functionality. The app has many great features including prompts to save new passwords when you enter them on websites, a mini mode that sits in the Mac Menubar, browser extensions and my favourite; the Security Audit.

The Security Audit shows you which of your passwords are weak, which are duplicates and which are old enough to merit changing. This analysis is vital in understanding where the weaknesses are in your password inventory. 

This quote from the 1Password website sums it up:

Why 1Password? Because your mother's maiden name and your dog's birthday haven’t cut it as a password for a long, long time. 

Because reusing passwords has never been a good idea. 

Because "secure" and "convenient" never worked together in a sentence until we built 1Password.

1Password supports iOS, OSX, Windows and Android although you'll have to wait a little longer for new versions for Windows and Android.

If you do one thing to improve your password security it should be to download an encrypted password storage app and I would suggest it should be 1Password.

Does your payment system solve a problem?

Originally published on Billing Views.

It's an exciting time to be working in payments. The market is experiencing a plethora of new providers; some will succeed, some will be acquired, some will sink without trace. But what determines who will be successful?

New payment systems that succeed are ones that do it better than what went before or solve a real consumer problem. A problem imagined by the payments industry doesn't count!

Let's examine some examples from the last few years and see why they have been successful:

• mPOS card payment schemes, like iZettle, solve the problem of card acceptance for small businesses and traders because they deliver a convenient and cost effective solution for both parties, using a process that consumers already trust. mPOS allows customers to pay with a card in scenarios where historically they had to have cash available or write a cheque (remember those?).

• Contactless card payments, from the usual suspects, use a familiar payment device (the card) and speed up the transaction for both the consumer and the merchant. Contactless takes an existing transaction process and makes it simpler.

• Mobile handset apps, like Barclays Pingit and NatWest, that support person to person payments deliver instant funds transfer to family and friends. No need to hand over that last tenner in your pocket or post a cheque.

• Apple EasyPay lets consumers use their Apple handset to buy Apple products in an Apple Store. A nice converged, branded experience for Apple and its customers!

• Prepaid vouchers, like Ukash, let consumers spend cash online, solving a problem for consumers who don't have or don't want to use cards online (I must declare an interest here). Prepaid vouchers are easy to buy from a huge number of outlets and bridge the gap between cash and ecommerce.

All these payment systems make life easier for the consumer and minimise payments as a barrier to purchase; something that the industry sometimes seems to overlook.

Digital proposition? Please don't rely on analogue fallback

Originally published on Billing Views.

My top digital anathema is when the digital world falls back on the analogue world because the digital process is broken. I recently experienced an example of this with Barclays Pingit on my iPhone.

I've always had a bit of a soft spot for Barclays, maybe because I worked for them briefly many years ago, when banks were, well, banks. When Pingit launched I was both intrigued and impressed they'd come up with a person-to-person payment app in advance of the much trailered Vocalink product. Although not a Barclays customer I'm always up for something new in payments so I downloaded and setup Pingit. 

All worked well and over time I've made a few payments with no problems. Recently I had my iPhone replaced by Apple which meant going through a brief app setup again to get Pingit working on the new handset. I've done this before so didn't expect any problems. However, this time it turned into a shambolic customer experience. The setup SMS never arrived and the app didn't display any error message so I called the helpdesk. Despite a lengthy conversation the helpdesk was clueless; frustratingly they couldn't tell me anything about the problem. Apparently I had to go into a Barclays branch with a call reference number. Why? No idea. 

Today I went into a Barclays branch clutching the reference number I'd been given. I spoke to Christa who was genuinely keen to help. She put in a call to the Pingit helpdesk but they were as baffled as the rest of us. Delete the app was the eventual suggestion. Christa patiently sat there while I downloaded (painfully slowly over 3G as I couldn't connect to Barclays WiFi) the app and went through the setup again. Eventually I got to the micro deposit screen (after a couple of timeouts), thanked Christa for her patience and left the branch. The verdict seemed to be that I had probably tried to install Pingit on too many handsets but no one seemed very sure about anything!

What did that episode cost Barclays? Helpdesk time, branch time, more helpdesk time; hardly a digital experience. Anyway, I assumed that now I was setup and ready to pay. I duly entered the value of the micro deposits into the app and to my dismay received a message that I would have to wait for a letter with a code before I could make a payment. This would be the same letter I received a while back when I originally signed up for Pingit. Aaaaagh! Couldn't Barclays see I had previously done all this? If I wasn't a tenacious payments professional would I really have bothered with such a tortuous process?

The obvious lesson here is make sure your digital process works whatever the scenario and when it doesn't, make sure everyone is joined up so you can get the customer up and running again with minimum effort.

mPOS and the changing face of card payments

Originally published on Billing Views.

Mobile point of sale (mPOS) card payments has the potential to create massive disruption both in the high street and in other places where cash has been the only method of payment. It makes card payments available to retailers and small traders who previously couldn't justify the expense of a Chip and PIN machine from one of the big acquirers. All they now need is a Chip and Signature or Chip and PIN device from someone like iZettle or Payleven plus their iPhone, iPad or Android device and they're up and running. Cash isn't going away any time soon and will continue to be the predominant method of payment for lower value transactions for years to come, however mPOS gives customers the option of card or cash. 

mPOS has the potential to disrupt the existing card acquirers' business, especially at the lower volume end of the market. As a one or two person business why pay for expensive hardware and fixed monthly charges, especially if you expect to continue to take lots of cash payments? A pay as you go card payment model with low hardware costs makes much more sense.

There is a risk that with an increasing plethora of mPOS providers in the market, potential users will be baffled by the best option, especially as pricing is fairly consistent. However with these devices available in the high street from retailers like EE (iZettle) and Apple (Payleven) takeup should rapidly accelerate as potential users come across them in familiar surroundings.

So what's mPOS like in the real world? A few weeks ago I helped out at a market and spent the morning taking card payments using iZettle. Not only did it make my life easier but customers loved it. It gave them choice and convenience using a flavour of a technology they're already familiar with.

Consumers expect to be able to pay with cards whoever they buy from and mPOS gives smaller retailers and traders the opportunity to compete with bigger organisations and not lose out because they can't take card payments. That will be the real disruption.

I've seen the future of contactless payments, it's not NFC and it works

Originally published on Billing Views.

When people talk about contactless payments they usually mean contactless EMV (Europay, MasterCard, Visa) card payments or NFC (near field communication) payments using a mobile device. Contactless card payments have been in the news recently amid reports of double charging or the wrong card being charged. I have enough trouble getting the correct card to read so am not surprised that these problems have been comprehensively debunked by industry experts like Dave Birch.

However contactless payment using a mobile device is not just about NFC. The best contactless payment applications I've experienced have not used NFC but have been designed to improve the transaction experience within a specific retailer. Starbucks has combined loyalty with payment in an application that makes mobile payment simple. Combine it with Apple's iPhone Passbook app and you don't even have to unlock your phone to pay.

However for me, the killer contactless app is the Apple Store EasyPay app. I can take items off the shelf, scan them and walk out without ever speaking to a store representative. The power of those 575 million cards that Apple has stored against Apple/iTunes accounts becomes very apparent. Minimal payments friction and no queuing. Any downside? Perhaps it makes it too easy to spend! Installing the iOS 7 beta on my iPod Touch (having an Apple developer in my immediate family has its benefits!) and seeing the appearance of iCloud Keychain with its ability to store card details, points to the next stage of Apple creating a payments capability in its handsets. Combine EasyPay with iCloud Keychain and you have a digital wallet in your handset. All you need then is more places to use it! As the payment process is as simple as scanning a barcode, the impact on in-store point of sale hardware is zero and Apple can supply the transaction data to the retailer in the background. It would certainly explain Apple's apparent lack of interest in NFC. The next year will be interesting ...

Is there a future for bank branches?

Originally published on Billing Views

A few weeks ago my local branch of HSBC received a major refurbishment. What intrigued me about this is that in our increasingly technology centric world HSBC still thinks it's worthwhile spending money on its branches. As a customer who will do everything I can to avoid stepping inside a bank, the idea that banks are spending money on branches rather than enhancing their mobile and web engagement is horrifying! Every time I visit a bank it's because the task I need to carry out isn't, but could be, available online. 

The banks have yet to understand that branches are only one part of a distribution strategy. They have mobile apps and online banking but these still operate as adjuncts to the core branch; some banks have poor online implementations and some have completely ignored the mobile market. Metro Bank is building its business around the branch, with no mobile apps (the iOS Metro Bank app is for a US bank!) and a limited online banking platform. Marks and Spencer (via HSBC) has focussed on branch banking in its stores. Both Santander and Co-op were excited about buying branches from RBS and Lloyds respectively, until they ran into problems. 

In my home town we have five banks in spacious, under-utilised premises. In the same way as mobile operators share infrastructure so the banks should share branches. Rather than continue to close branches, site sharing would enable cost reduction without depriving communities of physical access to banking. 

If banks want to continue to be relevant to consumers they need to move the heart of their engagement from their legacy infrastructure to the consumer and let the consumer engage via the device they always have with them - the mobile phone. Many of tomorrow's customers will see bank branches as irrelevant as phones tethered to the wall. 

Will mobile and payments play nicely together?

Originally published on Total Payments.

Every day there’s at least one announcement about something new and exciting happening in the mobile payments space. But what really interests me is what happens out there in the real world where consumers are going to use these exciting new products.

Recently I was in the Bluewater shopping mall. First stop was Starbucks for a coffee paid for with the Passbook based Starbucks Card. Nothing new here except that spending £10 via American Express, combined with a Foursquare check-in, gave me £5 cashback on my American Express account. A nice example of combining social and payments. Even better, £50 spent in House of Fraser results in £25 cashback. Does this prove the future of high street shopping is social? Possibly and it’s certainly excellent value for little effort!

I frequently use my handset to check prices in store to compare with online. However 3G coverage in the area was taking a battering on the first Saturday after payday. No problem; I can use the extensive WiFi in the mall, mostly provided by BT Wi-fi. Unfortunately, whether trying to use BT Wi-fi via their store partnerships with John Lewis and Starbucks or via Boingo, it was seriously broken. I did manage one brief connection but the rest of the time just connection errors. Shocking that one of the UK’s prime shopping malls still suffers from poor wireless coverage, both cellular and WiFi.

When I started out my battery was around 90% full. After five hours I was down to 10% which necessitated a quick visit to the Apple Store to give the battery a boost via one of the chargers for the display handsets. Normally I carry a Mophie battery charger with me but on this occasion I’d left it at home – mea culpa! Constant WiFi connection attempts plus poor 3G had taken its toll on the battery.

What struck me about the whole experience is that if we are to put the handset at the heart of the payments experience there are some real challenges to overcome. You might not need wireless coverage for NFC payments but you do need it for checking prices! And to pay with your mobile you certainly need a handset with enough power to turn on!

Contactless is all about the consumer experience

Originally published on Total Payments.

It's always interesting to see how payment providers approach the consumer experience when they launch new products. My recent experience with a contactless payment product trial has reminded me that however smart the underlying technology, if the user experience is rubbish, it kills the product.

A major UK bank is running an iPhone based contactless payment trial using the iCarte NFC enabled case for the iPhone 4 and 4S and an app downloaded from the iOS App Store. Unfortunately the consumer experience is terrible - it requires a previous generation handset, design aesthetics of the handset are ruined by the clunky case, the handset cannot be charged using the Apple charger without removing the case, the handset has to be unlocked to launch the app and the app is very basic (even requiring merchant details to be added by hand). In reality the consumer experience is worse than using a simple contactless card. 

Presumably the intent was to let customers use their existing handset on the trial. However 'bending' a non NFC handset to do NFC payments in this manner defeats the whole object of creating a simple, frictionless, customer experience. The user feedback I've read has been mostly negative and not an endorsement of mobile handset contactless payments. I used the iCarte a few times out of professional interest and then stuck it in a drawer. If I was a regular consumer I'm not sure it would have got that far!

Contrast this experience with using the Starbucks iOS app via Passbook. Once setup with auto topup enabled, the payment experience is simple and fast. No need to unlock the handset when you're at one of your favourite Starbucks - just swipe from the home screen. Although limited to a single retailer, the user experience is brilliant and a great example of how contactless payments can be simple and frictionless and not just about NFC.

Mobile NFC will happen as more handsets support it but other forms of contactless payment will develop in parallel. The winners will be the products that embrace the consumer and enhance the payment experience. 

Banking in the real world

Originally published on Total Payments.

Recently I undertook an experiment with a major UK bank. I decided to investigate, with my wife's assistance, how simple it would be to obtain a small buffer overdraft facility on her current account. As an existing customer with a perfect banking history and set up for online self-serve it should be easy - right? Wrong!

Eventually we found the information page on the website that outlined the process and yes allegedly it's easy to apply from within the online banking website, so the customer's identity is authenticated and there's no need to re-key lots of data. Unfortunately the page was clearly wrong because there was no option to apply for an overdraft online. Finding this hard to believe I phoned the helpline listed on the website. I explained the problem and received the response "you want to apply for an overdraft over the phone". If I wanted to apply over the phone I wouldn't be stating I wanted to apply online nor pointing out that the website was clearly flawed. I was then transfered to another help desk who could only offer an apology by way of assistance. So no online application process.

Lesson 1 - Allow your customers to engage with you using the channel of their choice.

As the bank had clearly failed phase one, we moved onto the next attempt to engage; a visit to the local branch. Something as simple as a low value overdraft could presumably be arranged very quickly with a real time credit check? Ringing the bell on the customer service desk failed to elicit any response. Asking a cashier resulted in being told they were too busy to discuss an overdraft. However they could make an appointment to call my wife at a specific time a few days later. 

Lesson 2 - If you are going to have local branches, ensure they have the appropriate resources to engage with your customers. 

So agreeing to discuss an overdraft on the phone was the next attempt at communicating with the bank. Unfortunately the agreed time came and went with no call. So my wife went back into the local branch to point out the failure to contact and was told that the person who was supposed to call her had to take her husband to hospital because he had stuck a screwdriver through his hand! As excuses go, that's an unusual one, although didn't explain why someone else couldn't have called. Unfortunately they were still too busy to discuss an overdraft (they'd clearly had a frenetic few days that prevented the staff helping customers!); my wife was asked to return later that day.

Lesson 3 - Do what you say you will (yes I know it's obvious but clearly not to some people). 

My wife mentioned her dissatisfaction on Twitter and it did get picked up by a bank representative. Unfortunately their response was a link to the online complaints page. No attempt at taking ownership.

Lesson 4 - If you're going to attempt to be a social business your representatives must be empowered to take ownership and resolve a customer's problems. 

The final visit to the branch resulted in the overdraft being arranged in about five minutes. So despite everything that had gone before it was actually a simple process. This experiment has shown the total disconnect between how a major bank operates and how a customer wants to engage. As Brett King said "Banking is no longer somewhere you go, but something you do" and banks that don't understand this are going to die. The opportunity is there for consumer centric banking and who is going to grasp it?

Adyen takes Chip and PIN to the consumer

Today Adyen announced the launch of their Shuttle Chip and PIN reader to complement their existing ecommerce and mcommerce payment solutions. The EMV compliant Chip and PIN card reader connects to an Apple or Android mobile device via Bluetooth and replaces the need for the usual POS card devices.

The standout for me is that Adyen enables retailers to take the payment processing piece to the consumer, rather than expecting the consumer to go to the payment processing; i.e. queue up at the back of the store for the privilege of paying. This is the Apple model where strolling retail staff can process a payment on the spot for the customer. This creates a much better customer experience and I bet it reduces breakage. How many times have you taken a look at the queue at the till and thought no way! John Lewis does a great job making staff available on the shop floor to assist customers - think how much more effective they'd be if they could also take payment.