Video: The History of Payments

Mobile payments continue to gain momentum as consumers look for easy ways to pay for goods and services via their smartphone devices. Gartner recently predicted that the number of consumers paying for items on mobile devices will surpass 141 million this year, a 38.2 percent increase over 2010.

To make light of a flourishing technology, Barclaycard in the UK created a humorous video depicting the history of payments.

You can read more about the “re-imaged” history of payments on Celent’s Banking Blog.

What are your thoughts on the future of payments? Leave us a comment below or Tweet @bankingdotcom.

Social Media Statistics: By-the-Numbers, August 2011

Below are interesting statistics on social media usage. Feel free to share your favorite social media statistics in the comments section.

  • 89% of US companies use social media for recruiting (Source: Jobvite)
  • 71% of online Americans use video sharing sites, a 5 percent increase over 2010 (Source: Pew Internet)
  • 69% of travel companies have seen traffic growth from Facebook; 46 percent have seen the same from Twitter (Source: Tripl)
  • 34% of US cell phone owners have shot video with their phone, while 26 percent have watched video on their phone (Source: Pew Internet)
  • 27% of time spent on Facebook is spent on either the Homepage or Newsfeed, with just 10 percent spent on apps (Source: comScore)
  • 20,000,000 visitors world wide for Google’s fledgling social product, Google + (Source: comScore)
  • 500,000 merchants have signed up for location-based social network Foursquare (Source: Foursquare)
  • 80% of advertisers renew their campaigns with Twitter (Source: eMarketer)

Working on building your Twitter following? Here are 10 tips from All Twitter.

What We’re Reading

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.

  • Visa’s Push a Sign that U.S. is Finally Ready for Chip Cards

American Banker

Visa Inc. has introduced a series of incentives to spur the U.S. to adopt chip cards – a change once considered as likely as the country switching to the metric system. The U.S. has lagged in its adoption of the EMV Integrated Circuit Card Specifications, commonly called chip-and-PIN, which many countries use to improve security at the point of sale. Skeptics have said the U.S. banking system is too fractured to support a widespread shift to the standard, and that the cost for merchants is too high to justify installing new terminals. Now Visa says U.S. banks and merchants are ready to make the switch, and on Tuesday it set its first deadline just over a year away.

Read more

  • Overdraft fees still high at nation’s largest banks

Associated Press

The country’s largest banks are still charging steep overdraft fees. A survey released Wednesday by the Consumer Federation of America found that the median overdraft fee is $35, the same as it was last year. The highest fees also remain $33 to $37 per overdraft. The fees can be triggered if customers overdraw their checking accounts by as little as $5.

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  • Leveraging Social Media For Banking

Business Insider

Banks are looking to get in on the worldwide social media party, and find ways to promote their online and mobile banking products at the same time. As happens in the early phase of any new medium, there are a bunch of experiments going on right now. The recent partnership between American Express and Foursquare is a prime example. Foursquare is a social networking service where members “check in” at their locations using a mobile phone to earn points and find friends. The deal rewards American Express cardholders with discounts when they check in via Foursquare at participating merchants.

Read more

  • Pay More Attention to Your Website Users

BusinessWeek Blog

When it comes to customer engagement, many big-name brands do just enough to stay one step ahead of their competition, and because of their past momentum they are able to maintain a lead for some time. However, smaller and more nimble organizations focused on creative uses of technology are starting to overtake them. Think Etsy vs. eBay, or Yodlee vs. Mint. There are plenty of articles out there focused on how small businesses should approach building a Web presence, but they tend to focus on topics such as search engine optimization and how to leverage social media.

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  • Who Needs Bank Branches?

Forbes

Here’s the deal. You have your paycheck deposited electronically at the discount broker, just as you would at a bank. You get checking, a debit card and online bill paying, all free. When you need cash, you get it from any bank ATM you want, and Schwab and Fidelity will reimburse you for the ATM fee. A similar rebate is offered by USAA, a mutually owned firm that started out selling insurance to veterans and is now running a de facto national retail bank out of a single branch in San Antonio

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  • Speaking Of…

Gonzo Banker

Michael Coral of Gonzo Banker had an interesting call with Equifax the other day. Here are a few snippets of his conversation. Equifax, “Good afternoon, Mr. Croal Dude. We see you have maxed out your credit cards and your home equity line of credit. We are putting you on notice that if you don’t call Chase and get those limits increased, we will have no choice but to drop your credit score.”  CroalDude, “Yeah, yeah, I know. I am in the process of cancelling my yardman, my bug guy, the alarm monitoring that I never set, and cuttin’ off my no-good brother-in-law. Therefore I will be reducing my expenses so paying those bills won’t be a problem.”

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Gen Y: The Digital Generation

The Intuit 2020 Report, The Future of Financial Services, predicts that in the next 10 years Gen Y will transition from young carefree spenders to an important part of the financial services customer segment. By 2020, a majority of this group will be in their early to mid-thirties and learning to manage money as adults, with families and mortgages.

Gen Y, also known as the digital generation, is a tech-savvy group of individuals who were brought up using mobile technologies, Facebook and email. Javelin Strategy & Research recently released a report, Gen Y: How to Engage and Service the New Mobile Generation, which outlines how to reach the mobile generation as financial members and customers.

Some of the key findings include:

  • 4 out of 5 Gen Y consumers already have a personal and/or joint checking account, and 38 percent of them are very satisfied with their current banking relationship.
  • A Gen Y consumer is nearly twice as likely as an everyday consumer to be a mobile banker, and 31 percent of Gen Y consumers review account balances more than eight times a month via mobile banking.
  • Gen Y has high expectations from PFM tools, and 23 percent want PFM to categorize their spending.
  • For mobile PFM users: 46 percent want to make comparisons when shopping, and 33 percent use it to track finances on a daily basis.

For more Gen Y statistics, Credit Union Times has a slideshow here.

Are your Gen Y customers and members using mobile solutions more frequently than Gen X and Baby Boomers? Do you see a high demand in PFM functionality from Gen Y’ers? Let us know in the comments section below.

Wall Street Woes

Despite Washington’s last minute decision to raise the debt ceiling, the stock market has tumbled in the last week, leaving all sectors of the market questioning its financial stability. On August 8, 2011, the Dow plummeted more than 600 points as the market re-rated the U.S. growth outlook.

Bank of America was among those hardest hit. Forbes reported, “Bank of America was among the session’s worst performers, with shares being dumped amid a surge in volume. The bank is facing a $10 billion lawsuit from American International Group over mortgage-backed securities tied to its Countrywide and Merrill Lynch units. BofA’s stock was down a stunning 20.1%.”

However, last week the Wall Street Journal reported that not all banks have a negative outlook on the market. Reporter Francesco Guerrera said, “On one hand, the unexpected bounty provides them [banks] with cheap funding that can be put to work in the form of loans. At the same time, the new deposits swelled their liabilities (deposits are counted as liabilities because they will one day return to their owners)—raising the unwelcome possibility that regulators will force them to add more capital to their balance sheets.”

How is the current market and capital requirements affecting your institution? What would you do differently? Do you think the U.S. is headed for a double-dip recession? Leave us a comment below.

Mobile is the New Web

As mobile banking technologies advance, banks should re-evaluate how they package mobile offerings to their customers. Mobile banking, an umbrella term consisting of mobile applications, mobile web browsing and text message banking, actually improves on the online experience and offers the additional benefit of traveling with your customer. As Net Banker’s Jim Bruene notes, “Equating mobile banking to online is selling it short. Really, it’s much better than online.”  With the added capabilities of near field communication, remote deposit capture and mobile wallets, the mobile banking experience can surpass online by providing resources to customers 24/7, at any location.

Because of these far-reaching and all encompassing attributes, online banking could soon be viewed merely as an extension of mobile. Companies are even beginning to develop mobile technologies first as the amount of time people spend on mobile apps has almost doubled in the past year.

However, Jim indicates that despite the buzz about mobile, it will be banks’ business models that determine success. He says,  “Ultimately, banks will win or lose based on how well they execute on gathering deposits, making loans, facilitating transactions/payments, servicing customers effectively, and pricing it all correctly.”

Are you developing mobile first? Do you see your customers moving towards more mobile than online usage? Tweet @Bankingdotcom or let us know in the comments below.

What We’re Reading

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.

  • Online Banking Quietly Booming

American Banker

Consumer research conducted recently by Novarica found that not only are 38 percent of the U.S. population avid users of online banking services (versus the 12 percent to 18 percent of mobile banking users, depending on whose estimate you go by), but the number of people who prefer to use the online channel for basic banking transactions has grown around 30%. Online banking is now the go-to destination for 70 percent of Novarica’s survey respondents when researching products and for 68 percent when checking account balances. Sixty percent of consumers prefer to transfer funds online, again more than any other channel. For those of us old enough to remember 1995, when Security First Network Bank opened the first internet-based bank and got the stalled online banking movement moving, these numbers are high.

Read more

  • The Two Different Worlds of Bank Tech — U.S. and the Other 194 Countries

Bank Systems & Technology

Remember, the U.S. is the only country that apparently believes in free enterprise whereby any group of fat-cat-businessmen who can put together $8 million in capital (maybe more now after the reform) can apply for a bank charter. That relatively easy process has meant lots of banks over the years. There are 15,215 banks and credit unions in the U.S. right now, diminishing at a rate of 3 percent per year. That’s not a mystery; It has been every Fed Chairman’s hidden agenda to have fewer banks.

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  • Firms enlist smartphones to provide cyber security

Boston Globe

There’s a new weapon of choice in the battle companies are waging against cyber crime: your smartphone. Companies are enlisting smartphones as another layer of protection, say security professionals, because they are cheaper and their widespread popularity makes it easier for firms to reach a broad swath of customers. “People can forget their keys and lunch at home, but no one forgets their phone,” said Ward Howell, director of security solutions consulting at Q2ebanking, an Austin, Texas, firm that provides banking services to regional banks and credit unions. Software can turn smartphones into security tokens that spit out new passwords frequently like RSA’s popular SecurID key fobs.

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  • 5 Tips for Becoming a Process-Driven Organization

Gonzo Banker

While various companies have made great strides in improving their efficiency and creating real, tangible results in terms of productivity gains, financial organizations seem to have done this despite the fact that they continue to do a notoriously poor job of evaluating and improving their processes. But with all of the regulatory changes thrust upon us the past few years and the lost revenue that will accompany them, there has never been a better time to focus intently on what banks can control: how work gets done in our own shops. Many bankers have made attempts at process improvement and reengineering, and many feel the results have been mediocre at best. At Cornerstone, we have found five key elements that consistently permeate process-driven organizations.

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  • The Top 17 Most ‘Social’ Companies

The Huffington Post

When you think about the most social media-savvy companies, what firms come to mind? Intuit or The Limited may not be at the top of your list, but they’ve just been crowned some of the United States’ “most social” companies, according to new research from NetProspex, a sales and marketing database company. As part of its annual “Social Business Report,” NetProspex developed a ranking for the most social media-savvy businesses in the United States based on a measurement called the “NetProspex Social Index (NPSI),” a number that takes into account what NetProspex calls “social presence,” meaning “the number of employees with social media profiles across Twitter, LinkedIn, or Facebook using a company email address,” and “social connectedness,” or “the number of connections across social networks”

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  • Would you tweet by telegraph?

Javelin Strategy & Research Blog

The velocity of money now moves at the speed of electrons. Moments after shoppers swipe a credit or debit card, financial institutions move money around the globe. And yet, despite the accelerated speed with which consumers can spend money, they still must rely on antiquated methods to track how much money they have left or where they spent it. Though we live in an era of smartphones, laptops and tablets, banks and credit unions still seem to think an old-fashioned checking account register is an adequate means to track spending. Frankly, it’s as if they are suggesting that their customers head to a telegraph office to send a tweet or post an update on their Facebook wall.

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Tablets Are Cool, But They Can’t Do Everything

American Banker recently reported that while tablets are a promising technology for financial institutions, very few banks offer tablet banking to their customers. With the significant growth in the tablet market, banks and credit unions will likely see a demand for more tablet solutions in the next few years. Despite tablet’s short time on the market, the iPad was the first to debut in 2010, Forrester said that over 10 million tablets were sold in 2010, and they expect that number to double to more than 24 million in 2011.

Steve Cocheo, executive editor of the ABA Banking Journal, agrees that tablets will be an important part of the financial services sector over the next few years and notes, “Go to any community banker meeting nowadays and you will see for yourself: The iPad has become the executive tool of choice.” Turning to a lighter tone, Steve noted that while tablets, such as the iPad, are seen as the hip, new technology, they can’t do everything a magazine of newspaper can. Here are a few things you can’t do with your iPad:

  • Try rolling one up and swatting a fly. Expensive and ineffective.
  • You’re on a deserted island with two matches, an iPad, and no dry tinder. Good luck getting a fire started. (Got an app for that?)
  • Try leaving an anonymous ransom note with an iPad. They’ll track you down from a satellite. Cut out letters from five newspapers and they’ll never figure out where you sent it from.

You can read Steve’s complete list here.

Does your FI offer tablet banking to your customers and members? Let us know in the comments section below, or Tweet @bankingdotcom.

Banking.com Enhanced for Mobile Readers

With 4 billion mobile phones in use across the globe, mobile users are spending more time utilizing phones for day-to-day tasks. Mobility is helping shape and support our everyday lives. One recent Microsoft Tag infographic even projects that mobile Internet is likely to surpass desktop Internet usage by 2014.

The Banking.com staff is no exception to this growing statistic, which is why we’re excited to announce that our site is now optimized for mobile reading. Readers who have mobile browsing capabilities on any smartphone platform can now easily read blog posts, search by topics and quickly reference archived posts.

And for iPhone users: if you want to access Banking.com directly from your home screen for easy reading access, follow the directions below:

  • Visit Banking.com on  your mobile browser
  • Click “add to home screen” from the bottom browser bar
  • Confirm name of home screen icon (i.e. Banking.com)
  • The Banking.com logo will appear on your home screen, and with one-click you will be directed to Banking.com

Below is a preview of screen shots:

If you have any questions or comments about our mobile site, leave us a message below or Tweet @bankingdotcom.