Community

This is unwanted scare-mongering and will severly curtail online and mobile usage scenarios. As for curbing fraud, I'm not sure if it will help: Leading US ecommerce merchants like Amazon have still not implemented VbV or other forms of 2FA despite FFIEC releasing guidelines to this effect in 2005 and reiterating them in 2011, and I haven't come across any figures showing that they suffer greater fraud as a percentage of revenues as compared to their counterparts in EU and other countries where 2FA is common. 

IMHO, 2FA poses enough friction already. Any more factors and I predict that cash will enter online transactions - as it's already happening in India, where "Cash on Delivery" is the #1 payment mode for ecommerce purchases.

@MathewD:

Nice post. Something tells me virtual cards will enjoy greater success than other forms of ePayments in B2B. To understand their operating model, can you please include a "How It Works" kind of diagram, maybe in the body of your Part II or through a hyperlink. 

S&P offers lower price to EU members. Switzerland is not an EU member. So, Switzerland doesn't get the lower price. QED.

While I'm neither a judge nor lawyer, plain commonsense suggests that S&P has done nothing illegal. Looks like the EU Fund Managers camp is on a 'fishing expedition', but things will quickly get interesting if, as a result of this lawsuit, one or more of the following things happen: (a) S&P countersues Switzerland for not joining EU (b) Other non-EU nations also demand the lower price (c) Switzerland changes its mind about staying out of EU. 

If EPC calls upon consumers to similarly demand a "discount for cash", they'll convince everyone that they only have the consumers interest at heart.

@KeithR:

I agree that "making eBilling the default choice while offering paper bills as an alternative isn't forcing anything on anyone." However, the only rub is, most billers don't seem to be undergoing Masterclasses before taking these decisions!

No, my views are not based on portal-based eBills and eStatements. For reasons given in my Finextra post, they apply to PDF bills sent by email, especially those that involve a password / shared secret. Since it's even more unnatural to have a consumer enter a password / shared secret to see an ad on a emailed PDF bill / statement, it's not surprising that advertisers are willing to pay a premium for TransPromos placed on printed bills and statements. 

Through paper turnoff, billers might save a few pennies in paper and printing costs but they stand to lose a lot of $$$ in advertising revenues. So, to me, the real question is, should billers even want to smash paper turnoff industry averages?

@AndresF:

Props to you for writing one of the most sensible articles on this subject in a long time. I remember reading something to the extent "there's no pain in payments, there's a lot of pain in shopping". As of now, using a mobile payment based on standard credit cards is more painful than using the plastic itself. I've experienced the problem of cab drivers in India going out of the way to avoid accepting credit cards. If merchants, including cab drivers, complain about 1.5-2% credit card swipe fees, I wonder how they'll react to mobile payments, on which they're liable to pay the higher CNP interchange fee even for proximity payments, and that too, after investing in NFC POS terminals! 

In addition to Usability and Cost, I'd add "Business Case for the Service Provider" to the list of critical success factors, especially when the service provider is a multibillion dollar behemoth (like Barclays) and not an exit-happy startup (like scores of them). 

PS: One small correction to another unblemished article: When you say "I refer to both the payee and the beneficiary", I think you really mean "payor" and "beneficiary" since payee and beneficiary refer to the same entity, namely, the recipient of the payment.

@KeithR: 

Thank you for your clarifications.

I re-read your blog post and I didn't find any mention of 'easy 1-click "revert to paper" function'. What I did find were recommendations to billers to 'to default them (customers) to eStatements' and 'Make ‘email address’ a mandatory field on all application forms'. In fact, my biller probably was following the suggestion to "Ask your customers for their email addresses at every touch-point", which is how it was able to enroll me into eBilling without my consent. If this isn't forcing eBilling upon consumers, I'm sorry I don't know what is.      

When there are real-life examples of brands and ad agencies who are willing to pay billers a premium for print and portal based TransPromos, it should hardly matter to billers what DMA or some other research analyst says about email conversion rates. Besides, just because it's easy to measure effectiveness of a certain medium doesn't automatically make that medium effective. 

The traditional difficulty of measuring the effectiveness of print ads is being rapidly overcome by QR codes and other technologies that advertisers are using increasingly often these days. 

Maybe the time has come for billers to chant the mantra of "less paper" - enough to permit a couple of TransPromos (just joking!) - than "paperless". This way, I see greater opportunity for them to save trees, cut costs and increase revenues.

While much of my comments might be applicable anywhere in the world, I'm restricting them to Asia - the context of this blog post - where gut feeling still plays a significant role in business culture.

Convenience and security are certainly critical success factors but, in predicting the future of any retail payment service, its business case for the service provider plays a vital role, especially when the service provider is a multibillion dollar behemoth and not an exit-happy startup. After seeing what happened with Nokia Money, I'd be lot more confident of Barclays PingIt's long term prospects on this count if (a) Its users were willing to pay for it, and (b) It supported person-to-merchant POS payments, which not only fetches interchange revenues for the bank but also has two orders of magnitudes greater volumes than person-to-person payments. Since it's available to Barclays and non-Barclays bank account holders alike, PingIt doesn't seem to be capable of delivering the standard upsell / cross-sell benefit.  

This Finextra article suggests that nonbank payment solutions providers have come of age. Not only does Beamit, the nonbank mobile remittance startup featured in the article, recognize statutory hurdles but it has also budgeted a part of its VC funding to "knocking down regulatory barriers".

Many brands and ad agencies I came across recently - in Asia - are prepared to pay manifold premiums for TransPromos placed on print and portal bills and statements. This is because, according to their own experience and SLAs given by billers, these two media deliver far greater open- and conversion-rates than email. According to an MNO biller, "print is the only type of bill that I can guarantee that every one of my customers will open and read". With the drastic drop in color laser printing costs in recent times, billers no longer find it impractical to do TransPromos on printed bills and statements.

Therefore, while billers will undoubtedly be able to grow eBilling adoption by following the suggestions given in this post, they might no longer want to do so - not only does "eBilling by default" risk putting off customers as I'd pointed out in a recent Finextra comment - but it could also result in substantially reduced ad revenues.