Community

@DirkK:

Bulk order, nah, although I won't mind one Royal Wedding ashtray!

Nice post. Social media customer service is one more trend I've noticed. While it's offered by corporations, it's arguably of greater benefit to their customers. I hope it adds some value to corporations since I'd hate to see them pulling the plug on this initiative. Recently, I'd an issue with a certain bank and needed to contact its customer service. By the time it'd have normally taken me to log to its Internet Banking portal and contort my mind far enough to be able to select one of the options given in its drop down box, I was able to send an @ tweet to this bank, get its reply, and have my issue resolved. Great experience. Let me not even think of comparing it with the alternative of telephoning the bank's Customer Care.  

I've been planning to write this and a few other social media service examples up as a blog post (Title sneak preview: "Customers of the World Unite, You've Nothing to Lose But the Call Center Hold Music"). But, apart from one bank, all other examples come from non-BFSI industries. If Finextra permits a post that crosses BFSI and gets into other industries, I'll be happy to publish it on Finxtra.

SQUARE disrupted the card acceptance space by obviating the need for businesses to have a merchant account. Although there could be a difference between a typical SQUARE merchant and the "vendor" mentioned in your context, it seems that getting a merchant account is not easy. This could prove to be the biggest hurdle in the way of vendor enrolment to virtual card programs. (Assuming, of course, that a merchant account is required to accept virtual card payments). Furtheremore, this challenge lies outside the purview of the payer and the vendor. Any light you can throw on how it can be surmounted it will help.

As a channel, eBill might be new but the basic concept of reminders is old and Billers could've practised it for all these years via telephone, SMS, and other channels. However, despite all their lip service towards customer satisfaction, consumer advocacy and so forth, I don't recall the last time I received a reminder from any biller to pay before the due date. Looking at their business model, I'm not surprised: After all, Banks, Utilities and many other types of Billers make a lot of money for delayed payment e.g. credit card late payment fees and interest charges, electricity connection reinstatement charges, etc. Therefore, eBill reminder might have legs but only for the opposite business model: Billers will use it and consumers will pay for it.

On the other hand, DSO reduction has a strong value proposition. Billers might be willing to pay for a suitable functionality - rather than eBill reminder - that delivers this benefit more directly.

Once upon a time, it was said, "New York City Subway crime increased 12% in 2005. But, if you take away iPod related crimes, the crime rate actually dropped 8%." Seven years later, looks like we could substitute iPod with iPhone and the rest of the statement would remain valid.

With NFC, even a proximate card transaction risks attracting the higher CNP interchange. This is one more reason why merchants may not be too enthusiastic about investing in NFC terminals.

PERSONAL (www.personal.com) is just the service you want. I especially like its auto-form fill feature. (Other than being a user of this service, I have no interest in it).

Until there are viable alternatives to banking and card network rails - none have been found in the past 50 years, not sure if one will be found in the next 5-10 years - mWallets merely replace the plastic form factor of cards or cheque / Internet Banking form factor of bank accounts. The underlying funding sources for mWallets remain card or bank account. With their tepid response to NFC terminals, merchants have gotten this long ago. By launching PayTag, Barclays seems to have astutely recognized that a cheap, low-tech, sticker is enough to serve the basic purpose of mobile payments, namely, to pay. Since each phone can likely support only one sticker, the bank can guarantee lock-in with PayTag. On the other hand, since one mWallet can hold credit cards of Barclays and its competitors, it might make sense to leave mWallets to VC-funded startups. For a bank, PayTag is perhaps the end state.

Needless to say, banks have to prioritize funding for innovation initiatives with expected returns, either through fees from customers or incremental interchange revenues, or whatever.

With mobile payments, banks probably know that the reality is quite different from a whole lot of theoretical usage scenarios.   

Let's take the taxi driver example. What do we see on the ground? Despite having mobile POS in their taxis, many taxi drivers quibble about accepting cards. This has not only been my personal experience in some cities of India but also the view expressed in a recent Finextra post about cabbies in Spain / Italy. Fact is, for small businesses like taxi drivers and plumbers, a 2-2.75% MDF is a lot of money and a T+2 delay in receiving their funds is a lot of time. No wonder they insist on cash whenever they can get away with it and don't seem to be sold on the potential of mobile payments to improve their business model.   

Now let's take Uber, the limo service available in San Francisco and a few other American cities (maybe even London by now). It charges almost 2X fares of regular cabs. It justifies its premium by offering, among other features, guaranteed credit card acceptance. Imagine the consumer and regulatory furore that would ensue if banks were to raise their interchange by even 25 bps for accepting mobile payments via self-owned mWallets?

I think banks are doing a smart thing by letting all innovation in many of these spaces happen elsewhere without putting themselves on the frontline. They pocket the same fees anyway.

Most people within the portrayed customer segment - no Internet / email access - tend to use prepaid mobile connections. Those amongst them who have a banking relationship are only likely to have debit cards. In India, for example, prepaid and debit outnumber postpaid and credit by over 10:1. Since there are no 'bills' for the former category, the medium of delivery of bills seems somewhat moot.

SMS-based EBPP could actually be useful for the opposite customer segment i.e. the one that does have Internet / email access and postpaid / credit card accounts. Compared to email / portal based payments, it's much easier to hit reply with a 'YES' to an incoming SMS seeking payment. Since this segment does have a credit card or some other funding source that can be linked to their mobile phones, the payment loop can be easily closed. 

@Antti L:

I think your wish list is quite exhaustive. Apart from #4, I think any mWallet available in the market today (e.g. Google Wallet) supports almost all your other 'asks' when coupled with lockscreen password, which is anyway available on all smartphones.