Neither video games nor dating nor shopping have a stronger pull, in terms of initial mobile app retention than financial apps, according to one report released by mobile app research firm Liftoff. The Liftoff 2019 Mobile Finance Apps report, released earlier this month, showed that finance-focused mobile apps retain more users than retail, media, dating …Read More
Adoption of chatbots is on the rise. So are questions about how they can do more. Bank of America reported 6.3 million users of its virtual assistant, Erica, in the first quarter of 2019, up from 4.8 million the previous quarter. The AI-powered chatbot has completed 39 million interactions since its launch, the bank said. …Read More
Today is Earth Day, and what better way to celebrate than to take a look at fintechs helping out the environment by promoting eco-friendly habits. Here we feature companies with technology that saves trees by reducing the amount of paper used in the industry.
We’ve rounded up a handful of environmentally friendly fintechs in three categories: digital invoicing, paper-free mortgages, digital receipt printing, and paperless onboarding.
By taking the invoicing process digital, small businesses not only save paper, they can also save time and potentially receive payment faster, freeing up working capital they can put back into their operations.
- Paper.id provides SMEs with invoicing tools and payment integration. The company offers tools to help businesses issue their invoices digitally and receive payment via electronic payment methods. Paper.id demoed at FinovateFall 2018
- Charlie-India’s Invoicing Hub is a white label e-invoicing platform for banks and service providers. The tools allow SME bank clients to send, view, process, and pay their invoices within the bank’s online interface. Charlie-India demoed at FinovateEurope 2018.
- Tradeshift offers an e-invoicing service that connects companies with suppliers, customers and partners. Among the applications available on the platform are e-invoicing, electronic purchase orders, and automated document validation. Tradeshift demoed at FinovateEurope 2012.
Mortgage technology is one of the last frontiers in fintech. Regulation and oversight have made the home-buying process somewhat resistant to disruption. In the past few years, however, we’ve seen a handful of startups working to digitize the mortgage process, removing the need for hundreds of sheets of paper required to close a home loan.
- Namaste Credit is an India-based startup that serves as an online marketplace for mortgage loans. The service connects borrowers with relevant lenders to help them find the loan that best suits their circumstance. Namaste Credit demoed at FinovateFall 2018.
- Tavant Technologies offers VELOX, a suite of digital products ranging from searching for a home to closing on the loan. VELOX completely automates the process, making compliance more efficient and reducing the need for paper. Tavant Technologies demoed at FinovateSpring 2017.
- Roostify seeks to give consumers a better way to find and purchase a home. The company’s digital platform offers everything from digital customer onboarding to transparent, digital fulfillment to help lenders offer their clients a more efficient mortgage borrowing experience. Roostify demoed at FinovateSpring 2018.h
Digital receipt printing
Many retailers ask customers if they want to keep their receipt, but even if the answer is “no” the cashier still prints the receipt and throws it in the trash behind the counter. Digital receipt printing eliminates both the paper– and the awkward line of questioning– all together by sending the customer an email receipt.
- Dream Payments’ cloud-based platform offers a mobile POS device that not only accepts debit and credit cards, but also provides analytics, reports, and gives customers digital receipts. Dream Payments demoed at FinovateSpring 2015.
- CardFlight offers an API that allows merchants to accept online and offline payments within their own app. The company’s encrypted mobile magstripe reader, combined with its API, offer flexibility while keeping payments– and receipts– digital. CardFlight demoed at FinovateSpring 2013.
- ShopKeep’s POS technology takes a merchant’s cash register to an iPad. The register accepts a range of payments, from magstripe, to EMV, to Apple Pay; plus provides inventory management tools and purchase reporting analytics. The company’s mobile checkout flow also offers a paper-free, email receipt option. ShopKeep demoed at FinovateFall 2012.
Considered a must for millennials, paperless onboarding not only speeds up the application process, it also reduces errors, eases compliance, and eliminates the need for in-person bank visits.
- Five Degrees specializes in core banking technology. The company’s Matrix offering helps banks provide SMEs a fully automated, paperless loan onboarding experience. The paperless process lowers cost for both parties while expediting funds. Five Degrees demoed at FinovateAsia 2017.
- Quadient, formerly GMC Software, helps organizations create a better customer experience. The company’s Mobile Advantage solution is an omni-channel tool that offers digital statements and billing, paperless onboarding, and client e-signature. In addition to improving the customer experience, this combination speeds up workflows and reduces error. Quadient demoed at FinovateFall 2017.
- Mitek combines digital onboarding with identity verification tools. The company helps banks authenticate an applicant’s ID document and combines this with additional identifying paperwork. The supplemental documents not only verify the customer’s identity, but also provide additional information that can be used in loan underwriting to create a more complete picture of the applicant’s financial state. Mitek demoed at FinovateFall 2017.
Millennials have long borne the blame for a variety of problems in commerce, including the decline in popularity of diamonds and certain fast casual restaurants. Now that segment of young consumers — who are not so young anymore, and are approaching peak earning years — are finally getting credit for something. Millennials could be helping to bring new life to call center commerce.
That’s reportedly the case when it comes to luxury retail brand Gucci. According to a new report in the Financial Times, Gucci plans to open six call centers, including in such cities as Florence and Shanghai, as the retailer chases consumer demand for smartphone-enabled commerce, especially among millennials in the hunt for luxury goods. The call centers are meant to “resemble Gucci shops,” and are designed to cater to “shoppers wanting to discuss a $2,200 GG handbag or a $1,590 pair of trainers by phone, email or live chat.”
The Gucci call center effort comes at a time of change for luxury retail and call center commerce. Millennials are increasingly seeking access to luxury goods — including relatively affordable items. Indeed, millennials and Generation Z were expected to make up 45 percent of the high-end purchasing group in the coming years, according to a previous report in PYMNTS.
While younger consumers had not been previously drawn to luxury, they’re now buying individual items such as a T-shirt as opposed to an entire collection. The change in behavior is due, in part, to social media sites such as Instagram. These platforms bring urgency to fashion and serve as a newsfeed for brands.
Meanwhile, as documented by PYMNTS research and news coverage, call center commerce is undergoing its own changes, and via some forces that have little to with millennial consumers. For instance, artificial intelligence (AI) is among the main trends in call center development and growth, and PYMNTS research has found that for companies that have deployed AI, revenues have increased 9.2 percent year over year. That compares to 3.8 percent for companies that have not deployed AI.
Back in Florence, where Gucci operates one of its new call centers — they are reportedly called Gucci 9 — employees work in an office with 2,300 square meters of space (nearly 25,000 square feet), where “rows of smartly dressed young people sit at desks chatting on phones or tapping at emails,” according to the FT report. “Call center staff are encouraged to strike up personal relationships online with high-spending callers, just as the traditional shop assistant would.”
Some 150 employees were answering calls on the Friday morning the newspaper visited, handling inquiries from 26 countries, from callers “who want to buy, return or chat about Gucci — invariably from their smartphones,” the report said.
Many of the millennial consumers that Gucci hopes to reach via its new call centers are located in China (hence plans for the Shanghai center, scheduled to open in 2020, along with similar operations in New York City, Seoul and Tokyo). That’s because sales of luxury goods in China are skyrocketing — up around 20 percent from 2016 — in its sharpest growth since 2011, as Chinese millennials seek products like handbags and cosmetics.
Within China, sales of brands from Gucci to Chanel, which had been sluggish for years, rose at the fastest pace in five years in 2016 and are positioned to consolidate those gains in 2018. Sales of luxury goods in China reached 142 billion yuan ($22.07 billion) in 2016, a 20 percent increase from the prior year.
In fact, the popularity of luxury brands with Chinese consumers has also impacted the payment industry in the U.S., with Alipay, the digital payment arm of Alibaba, announcing last year that it had entered into a partnership with French apparel brand Lacoste that will enable Alipay acceptance in select U.S. stores.
Call center commerce is being reinvented for the digital age, and assuming the new Gucci effort pays significant dividends, you can thank millennials and their mobile-focused shopping habits for at least part of that.
Uber and Lyft’s initial public offerings could result in customers paying more for their rides.
That’s according to the Wall Street Journal, which reported that as public companies Lyft and eventually, Uber — which is slated to go public in May — may not be as inclined to slash prices for the sake of market share. Investors are wary of companies that don’t make a profit and the pressure placed on the likes of Uber and Lyft could result in higher prices, the news outlet noted. The two ridesharing firms have for years slashed prices and offered perks to steal market share from taxi companies and each other. Both have seen revenue surge but also have mounting losses.
“You have shareholders who want you to generate profits,” Mitchell Green, founder of Lead Edge Capital, an investor in Uber, said in the report. “There are lots of different levers, and one of them is pricing … These companies have more pricing power than people think.”
The paper noted that if investors are OK with the ride-hailing companies continuing to lose money to pursue growth, then the cheap fares will remain in place. After all, they can afford it. Lyft raised $2.3 billion in its IPO and Uber is expected to raise as much as $10 billion. Lyft has signaled that it won’t continue to lodge losses, telling investors that it expects to be profitable in the next few years. Analysts told the newspaper that may be hard to achieve if the current prices remain in place. The report noted that with its IPO, Uber will likely face pressure to turn a profit, particularly as revenue growth has slowed down. In the fourth quarter revenue from ride-hailing was $2.31 billion, flat with the third and second quarters of last year.
To cut costs, Uber and Lyft are looking at ways to reduce expenses associated with insurance and making routes more efficient for drivers. The companies expect costs to be reduced as more drivers and riders use their platforms, noted the paper. Still, analysts say it will take higher fares and fewer driver incentives to truly stop the losses. It’s a sentiment shared by Paul Hudson, founding partner at Glade Brook Capital Partners, an investor in both Lyft and Uber. He told the Journal that both firms will probably reduce rider discounts and improve their point programs to boost loyalty.
eBay is reportedly in talks to lead an investment in Paytm Mall in an effort to branch into offline-to-online commerce in India.
According to a report in the Economic Times, citing two people aware of the deal, eBay is expected to lead an investment of $160 million to $170 million, with the deal slated to be announced in May. This would be the third investment eBay has made in India, as it has also invested in Snapdeal and Flipkart. As the report stated, eBay will continue to run its online portal in the country, even with the investment. The company had owned 6.55 percent of Flipkart, but exited its investment when Walmart acquired the online retailing giant last year.
The investment comes as Paytm Founder Vijay Shekhar Sharma won support from the board to bring in new investors to push back against rivals Alibaba and SoftBank. One of the sources told the paper eBay has been looking at ways to invest in the big and growing Indian eCommerce market ever since it exited its stake in Flipkart.
eBay isn’t the only U.S. eCommerce giant eyeing the India eCommerce market. Amazon and Walmart have been investing heavily in the region. In late March, reports surfaced that Amazon plans to launch kiosks in India that will enable consumers to purchase its Kindle e-reader, the Echo smart speaker and the Fire TV Stick. Amazon is planning to install 100 kiosks in malls across the country by the end of the year.
Meanwhile, Walmart CEO Doug McMillon said earlier in April that the retailer is committed to the Indian market and that it presents a huge opportunity for the company. However, at the beginning of 2019, new eCommerce rules kicked in with the aim of protecting local merchants. Under the rules, online marketplaces such as Amazon and Flipkart were banned from selling products of any companies in which they had stakes, and prohibited them from inking exclusive deals with vendors. That prompted both Walmart and Amazon to overhaul their business models in the country.
After being one of many department store retail players to shoulder through a difficult holiday season, Kohl’s has been back in action in 2019, looking to reverse the trend of falling foot traffic and sagging in-store sales. Online sales have been a strong point: As of the last earnings call with investors, CEO Michelle Gass was touting the company’s ongoing commitment to building out its digital offerings and expanding its omnichannel reach.
“One hundred percent of our site visits are now touched by personalization in some way,” Gass noted, calling out product recommendations, machine learning and personalized search as critical elements.
The store has also spent much of the last six months figuring out ways in which it can be more than a department store. Last month, for example, Kohl’s announced it will lease or sell retail space at 10 locations to Planet Fitness – and that number could grow in the future. The gym won’t share doors with Kohl’s, but the companies will promote each other. The gyms will be between 20,000 square feet and 25,000 square feet.
“Our stores are a key asset and differentiator for Kohl’s, [as] we continue to innovate to make them more relevant and compelling for our customers,” Gass noted in an emailed comment to PYMNTS.
Working out is not the only new feature coming to Kohl’s – there is also the grocery shopping. About a year ago, the retailer announced a partnership with discount grocery ALDI that would see 10 Kohl’s stores become home to ALDI locations.
The push for Kohl’s is obvious: Grocery is one of the categories where consumers can be counted on for regular purchases, as well as one of the few areas where consumers show a marked preference for in-store shopping experiences. And while it seems obvious how Kohl’s stands to benefit from the ALDI partnership, ALDI’s use for Kohl’s is also pretty clear. The European brand is working to expand its footprint and name recognition – particularly in the middle U.S., where Kohl’s has a large and avid following.
“Kohl’s is a cornerstone American retail brand,” an ALDI spokeswoman told PYMNTS at the time of the announcement. “We think working with them is an ideal way to connect with a large base of American consumers.”
Moreover, as a new study from Field Agent indicates, the partnership makes sense by the numbers, since the two shopper bases are quite similar. Of the 3,000 consumers surveyed by Field Agent, 68 percent said they would very likely shop both sides of ALDI and Kohl’s combined stores in the same trip. Meanwhile, 90 percent said they would be moderately likely to shop at both the grocery and department store, and 38 percent said they would be “completely” likely to do so.
On top of that, Kohl’s becomes much more attractive to customers in general when grocery shopping is on the table. Nearly half, 49 percent, said they would be more likely to shop at a Kohl’s store if it were attached to an ALDI. And yes, the draw works both ways: 52 percent of shoppers noted they were more likely to shop at ALDI because of the attached Kohl’s location.
“If I happened to need something at Kohl’s, I’d almost for sure stop in ALDI to get something,” one respondent said. “I always need something from Aldi.”
According to the report, consumers are big fans of the new “good neighbor” approach Kohl’s uses in retailing and partnerships, and would like to see more of them. ALDI was a leading choice, but consumers also mentioned Barnes & Noble, PetSmart and Best Buy as other potential partners.
“To the extent shoppers can accurately predict their own behavior, expect the Kohl’s-ALDI partnership to generate greater footfall for both stores,” the report concluded.
Will two heads be better than one for Kohl’s and ALDI, as the survey indicates? Too early to tell, and too narrowly applied. But Kohl’s is clearly rethinking its physical shopping experience, and expanding into many other types of experiences.
And if nothing else, they’ve managed to capture a lot of consumer interest by doing so.
Gaming companies are taking digital authentication to the next level. Smart agents are rising to bring better customer service and fraud prevention to financial institutions (FI) and other digital players. In eCommerce, digital innovators are combining the ongoing consumer desire for online subscription retail with the rise of craft distilleries. And, in retail, Tivoli Audio opened a brick-and-mortar store to showcase its products on Boston’s Newbury Street. All this, Today In Data.
1933: The year prohibition ended in the U.S. on a federal level.
500: Square footage of Tivoli Audio’s brick-and-mortar store on Boston’s Newbury Street.
88 percent: Share of consumers who cited security as the most important factor when opening accounts.
66 percent: Increase in phishing attempts this year to date.
41.1 percent: Share of commercial banks that are “very” or “extremely” interested in adopting smart agents.
Coffee chains are brewing up a battle over customer loyalty: After news surfaced that Starbucks was updating its rewards offering, Dunkin’ is revamping its own rewards program with a pilot multi-tender system. The company is testing a DD Perks program that lets diners earn points at over 1,000 stores, regardless of how they pay. Previously, members of the chain’s DD Perks program could only earn points by paying with a gift card enrolled in the offering. Now, customers can earn points even if they pay with credit, debit or cash at pilot locations.
Dunkin’ U.S. Vice President of Digital and Loyalty Marketing Stephanie Meltzer-Paul said in an announcement, “Since launching DD Perks five years ago, we have consistently enhanced our members’ experience and worked to meet their needs through innovative new features, like On-the-Go Mobile Ordering, driving it to become one of the fastest-growing loyalty programs in the industry. With this pilot, we have the opportunity to bring more guests than ever into DD Perks by opening new options to translate any purchase into points.”
To earn credit with the offering, diners can scan a new physical loyalty card or their DD Perks® loyalty ID quick-response (QR) code in a mobile app at participating restaurants. The customer’s point balance, along with the points she earned on the purchase, would be included on a printed receipt.
The chain first experimented with the multi-tender program at certain stores in Pennsylvania and California earlier this year. Now, it will test the program at locations in Miami, Fort Lauderdale and Syracuse, New York, among other markets. The company said in the announcement it “will evaluate plans for a possible expansion of the program based on feedback from both its guests and franchisees.”
Clarus Commerce CEO Tom Caporaso said of the move, “The new DD Perks loyalty program is a smart move by Dunkin’, because it doesn’t alienate customers who don’t have a bank or mobile phone. Today, consumers want loyalty programs that seamlessly fit their current lifestyle and habits, so it’s important for brands to understand their customers and build their program accordingly.” He continued, “Dunkin’ clearly recognized an opportunity to expand payment options, and by being more inclusive to all customers, Dunkin’ is set up to drive loyalty across its entire customer base.”
According to the company, Dunkin’ counts over 10 million members in its DD Perks program. Through the offering, diners can accumulate five points for each dollar they spent on qualifying purchases. After customers reach the 200-point threshold, they receive a coupon for a free beverage reward to use at “participating” locations. The program also lets DD Perks members order ahead and skip the line via On-the-Go Mobile Ordering.
The Coffee Loyalty Landscape
Nearly half – or 47.5 percent – of QSR managers see loyalty programs as a feature that is important to a restaurant’s future success, per the PYMNTS Restaurant Readiness Index. At the same time, almost eight in 10 – or 79.5 percent – of QSR customers have the same view. And the approximate share of customers and managers who have a positive view of loyalty programs is 80 percent.
Beyond Dunkin’s multi-tender offering, Starbucks was set to launch new redemption options starting in the middle of April. With the changes, diners can redeem 25 stars for a dairy substitute, additional flavor or espresso shot. They can also use 50 stars for a brewed hot coffee, hot tea or bakery item, or 150 stars for a hot breakfast, parfait or handcrafted drink. In addition, they can use 200 stars for a protein box, salad or lunch sandwich, and will be able to get select merchandise or at-home coffee for 400 stars.
Diners who link their Starbucks Rewards Visa credit card or loyalty membership to a prepaid card will not have to fret about points. Previously, gold points expire six months following the calendar month in which they were earned. The green and gold tiers will be removed with the new offering. According to reports earlier this month, the move is an effort to attract new members.
From Starbucks to Dunkin’, quick-service coffee chains are revamping their reward offerings with the help of digital technology to boost customer loyalty.
When Green Piñata Toys Founder Shiva Kashalkar’s daughter was about eight months old, the new parent was excited to buy toys for her. However, she noticed her child would soon grow bored with them. With 85 percent of a child’s brain developing within the first five years, Kashalkar noted, they tire of their toys quickly. At the same time, she found some of her daughter’s toys were not age-appropriate, so she was not playing with them.
“I was looking for a way to rent toys” instead of buying them, Kashalkar told PYMNTS in an interview. However, there wasn’t an existing toy rental service at the time, so she was inspired to start her company. Today, Green Piñata offers “a curated selection of educational, high-quality wooden toys.” For a monthly fee, customers can receive up to four toys in every box. Kids can play with the toys for as long as they want, and customers send them back to the Green Piñata when the children are finished playing with them, at which point the company sends the next batch of toys.
During the process of selecting toys, customers see expert recommendations based on a child’s age. The system also keeps track of the items customers have rented in the past, using that information to personalize future selections. Parents can approve whatever recommendation the site gives, or can make their own choices. “Every parent knows their child the best,” Kashalkar pointed out. For payments, the company accepts credit and debit cards.
The Business Model
Green Piñata offers a selection of more than 250 toys, according to its website, and carries brands ranging from HABA to PlanToys to Crocodile Creek. Kashalkar said the company employs strict methodologies to source its toys, following all American, European and Australian safety standards. She also noted that the wood is sustainably sourced and the paint is non-toxic. The toys are also educational and “extremely high-quality,” she added.
If customers decide to keep the toys, they can buy them for a discount, usually 10 percent off of the Amazon Prime price. Moreover, Green Piñata takes care of the transaction, as they already have the customer’s payment information. “It’s much easier for them,” Kashalkar said. In essence, customers can try out four toys and buy as many as they want, “because they know for sure that their child is interested.”
All toys that are sent back to the company undergo a thorough cleaning process. First, they are cleaned using vinegar and soap, then are air-dried before another round of sanitizing and air-drying. Next, the toys are checked to make sure they are clean and that the wood is not chipped.
In addition to parents, Kashalkar said grandparents and other family members also love Green Piñata’s service. Relatives can gift three-month or six-month subscriptions for holidays and birthdays, or can choose their own amount. Heading into the future, the company’s five-year plan is to grow and capture market share as it is “revolutionizing the toy industry.”
The Children’s Market
Beyond Green Piñata with wooden toys, other eCommerce innovators have brought subscription offerings for children to the market. Earlier this month, news surfaced that Rent the Runway plans to debut a kids’ apparel collection. The clothing subscription company’s new offering was reported to initially offer girls’ sizes ranging from 3Y to 12Y. It is also reportedly collaborating with designers such as Little Marc Jacobs, Fendi, Stella McCartney, Milly Minis and LoveShackFancy Kids, among others.
Additionally, Walmart is partnering with KIDBOX to offer curated apparel styleboxes for children that customers can receive on a seasonal basis. The offerings include styles from brands such as C&C California, Butter Super Soft, Puma and BCBG.
From clothing to toys, digital disruptors are changing the way parents, grandparents and relatives access products for children with the help of the subscription business model.
Opening day came early this year for baseball fans. Thousands descended upon T-Mobile Park stadium in Seattle on March 28 — the earliest opening day in Major League Baseball (MLB) history — to see their home team, the Mariners, take on last year’s World Series champions, the Boston Red Sox. The trip to the game might have seemed familiar to many of these fans as they formed long lines to scan their tickets and enter the stadium. Additional queues formed at concession stands as attendees reached for their credit cards and IDs to buy beer or wine.
Many guests were able to move ahead of these lines, however, with the help of recently implemented technologies. T-Mobile Park is one of several major stadiums to implement biometric solutions, enabling customers to verify their identities by scanning their fingerprints and irises at major consumer-facing checkpoints.
Over the past year, 18 MLB, National Basketball Association (NBA), National Football League (NFL) and Major League Soccer (MLS) arenas have deployed biometric solutions by CLEAR. CenturyLink Field, home of the Seattle Seahawks, was the first NFL stadium to adopt the technology. According to Zach Hensley, vice president of operations and guest experiences for the Seahawks and CenturyLink Field, these services are changing how fans experience live games and boosting their overall enjoyment.
“Our fans really like the VIP experience of express lanes that shorten their wait time to get into the building,” Hensley said.
Sidelining Physical Identities
He explained that CenturyLink Field first introduced biometric authentication last year, piloting the technology at two stadium gates that handle 65 percent of entry traffic. New users had to stop by a kiosk and provide U.S. government-issued identification forms, as well as answer several questions regarding personally identifiable information (PII). Following that, they enrolled with the CLEAR system by providing scans of their fingerprints and irises.
Those who enroll can choose between two different membership levels. CLEAR Sports is free to use but provides access only to sports stadiums, while a full membership costs $179 each year and includes biometric-based access to TSA PreCheck at participating airports in addition to stadium entry.
Following CLEAR’s successful launch, the technology has been introduced at concession stands throughout the stadium, where users’ biometric data can be linked to payment cards to enable quick purchases. The solution can also be used at the point of sale (POS) to verify consumers’ ages when they buy alcohol or other restricted goods.
“At the concessions POS, there’s quicker transaction times. [Consumers don’t have to] pull out their IDs or credit cards — [they can] do it all with a fingerprint scan,” he said.
CLEAR has been well-received by attendees, Hensley noted, as they no longer need to remember their IDs or even game tickets. Ed O’Brien, head of sports at CLEAR, concurred, adding that biometrics could make sporting events smoother for fans by enabling them to use their own fingerprints and irises for identification and payments.
“Everyone wants everything instantaneously, whether it’s content or whether it’s purchases that can be done on a phone,” O’Brien said. “We feel that biometrics takes that to the next degree. [Users do not have] to carry components around and [can] unlock them on their own.”
Adding Change to the Routine
The sports world is known for its traditions, and old habits tend to die hard. Hensley noted that attendees have grown accustomed to a wide range of practices, including carrying physical tickets to games.
“We have several generations of fans dating back to our previous home in the Kingdome,” he said. “A lot of them [are used to the] same behaviors upon entering the stadium.”
These older fans might be hesitant break their habits and use biometrics, but the technology is becoming more prevalent, Hensley said. He believes that more Seahawks fans will see the benefits of incorporating them into their routines, especially because CLEAR’s Sports tier is free.
A Biometric Game-Changer?
Attendance at NFL games declined from approximately 17.8 million people in 2016 to 17.2 million last year as many fans have opted for at-home experiences. Bundled sports broadcast packages, social media and high-definition televisions allow them to enjoy games from the comfort of their living rooms.
“It’s become much easier for people to enjoy and interact with sports at home or outside of the venue,” O’Brien said. “The in-venue experience is becoming so much more important. … The more roadblocks you put in front of people, the more they’re going to go back to their home experiences.”
Many professional sports venues understand the importance of providing alluring in-person experiences, and some have even slashed concession prices in an attempt to boost attendance. In addition to such tactics, biometric solutions that allow users to quickly enter the stadium or move through concession lines could be key to reinvigorating guests’ experiences or even attracting new visitors.
“Increasing the speed of service and getting fans back to their seats and to the action on the field is our goal as venue operators,” Hensley said.
Professional teams are increasingly willing to try new things to make in-person experiences smooth and enjoyable for fans. Biometric solutions that authenticate identities and act as payment methods while also slashing lines could prove to be the game-changers they’re looking for.
Only a few years after a full rollout of Apple Pay, JCPenney has reportedly dropped the Apple Pay digital payment service in its app and brick-and-mortar stores. The retailer’s support account on Twitter noted the change during the weekend, 9 to 5 Mac reported.
In the social media reply to a user who asked why the payment method was taken away, the retailer said, “JCPenney made the decision to remove Apple Pay for our stores, we apologize for any inconvenience this may have caused. We will definitely forward your feedback regarding this for review.”
The company, which was started in 1902, had a full rollout of the payment method in 2016 after testing it out in 2015. As it stands, the retailer has over 800 locations in 49 states in the U.S. Ron Johnson, who arrived at the retailer to become CEO from Apple, had the role for only two years. And the outlet reported the chain was “disappointed in the results of his reshaping of the retail stores.”
The news comes after Apple announced in the beginning of the year that Jack In The Box, Speedway Convenience Stores, Hy-Vee supermarkets in the Midwest, Taco Bell and Target all support Apple Pay. The iPhone maker said in a press release that 65 percent of retail locations around the U.S. support Apple Pay and 74 of the leading 100 merchants in the U.S. support Apple Pay with those additions.
Apple Vice President of Internet Services Jennifer Bailey said in the announcement, “Whether customers are buying everyday household items, groceries, snacks for a road trip or grabbing a quick meal, Apple Pay is the easiest way to pay in stores, while also being secure and faster than using a credit or debit card at the register.” Bailey continued, “We’re thrilled even more customers will be able to pay at their favorite stores and restaurants using the Apple devices that are always with them.”
To reach consumers on the hunt for offerings that are “clean and natural,” Target rolled out its Everspring household brand. The line includes products such as dish soap, paper towels and laundry detergent, CNBC reported.
Christina Hennington, a senior vice president and general merchandise manager at the retailer, said per the report that it had “taken over a year” to bring the household brand to fruition. “From the sourcing to the packaging … we had to do it right, Hennington said. “We hired the right expertise to make sure the chemical quality was up to expectations.”
The selections, which are made from recycled materials as well as natural fibers or are biobased, are priced between $2.79 and $11.99. They will also come with a “Target Clean” symbol, which is new and shows an item is not made with chemicals like propylparaben or sodium laureth sulfate. At the same time, the products tap into natural fragrances to create combinations of scents such as bergamot and lavender. In addition, the items are not tested using animals.
The news comes as Target getting into the toiletry market by preparing to launch a brand of consumer products dubbed Smartly. The retailer was to roll out over 70 products ranging from dish soap to toilet paper per reports last year. Target’s chief merchandising officer, Mark Tritton, told The Wall Street Journal last year, “It’s about showing people that I don’t have to go to Aldi or I don’t have to go to Dollar General to find what I’m looking for.”
Target told the paper that Smartly products are being priced on average around 70 percent less than traditional brands such as Procter & Gamble’s Gillette, Tide and Charmin lines. The outlet also noted that the items are sold in small quantities to catch the interest of General Z and millennial consumers who are just starting out and aren’t interested in buying in bulk. Target research has shown, according to the report, that these consumers aren’t as loyal to specific brands as older shoppers.
Interview by Matthew Dove
Having arrived on the back of considerable fanfare, the Goldman Sachs-backed “Apple Card” has been met with a tepid reception in some quarters (including here at TFT Towers!). However, the CEO of mobile banking platform Pepper, is impressed by what she sees. Here, Michal Kissos Hertzog tells us why…
Michal Kissos Hertzog, CEO of Pepper
The services offered by the new Apple Card have been described as “rare but not unique”, how is it going to compete in a crowded market?
The Apple Card is a great expression of what Apple does best. It identifies user pain points and builds a solution easing or even removing that pain. This can be seen in its decision not to charge international fees, for example.
Given that the credit card has been a staple of day-to-day consumer finance for over fifty years, it is quite challenging to innovate its basic financial function. Nonetheless, Apple have managed to apply a fresh perspective and indeed have some key differentiators, which set it apart.
Firstly, it has put security at the forefront of the Apple Card. The physical card has no card number, CVV, expiration, or even signature and instead users rely on their phone for the card’s information.
In addition, for each purchase made there is a two-step security process, similar to Apple Pay, which includes a one-time-use security code, backed up by additional verification via Face ID or Touch ID. Digital fraud is becoming a much bigger issue for consumers and Apple is smart to highlight its safety measures.
Secondly, Apple clearly does not view the launch of this card as a product that will help purely with its profit-and-loss balance sheet. This credit card has no fees associated with it and there is no penalty for a missed payment, instead such payments will only have additional accrued interest applied. This is a smart approach by the company, as it is an attempt to build instant customer loyalty, by not penalising or charging users over basic payment issues or run-of-the-mill banking services.
Finally, the Apple Card has one thing in its favour which the competition simply does not have – the “cool factor”. Apple products, in many ways, are status symbols and are highly sought-after by consumers and the physical Apple Card is a continuation of this.
Apple has raised the bar on what people are going to expect from a credit card.
Do you see the partnership of Apple, Goldman Sachs and Mastercard as a sign of things to come? What does such a union signify?
By partnering with Mastercard and Goldman Sachs, Apple is getting expertise from industry leaders, which boosts its chances of succeeding significantly in the credit card market. In truth, such collaboration is the future of finance and those that ignore this approach, will likely be left behind.
We see this daily in our ‘banking world’ too. Incumbent banks are often too “proud” to collaborate or adopt technology which they do not own. Instead, many are seeking to build their own, based on their legacy IT.
the Apple Card has one thing in its favour which the competition simply does not have – the “cool factor”
But, at a time when consumers are prioritising real-time, personalised user experience and relevancy – this approach is just not fast enough.
The recent Open Banking and PSD2 regulations can change that and really push for collaboration. However, traditional banks don’t necessarily see it that way. We know from our latest research that two-thirds (64%) of C-Suite decision-makers at UK retail banks such as Barclays Bank, TSB Bank, Virgin Money and Royal Bank of Scotland believe the legislation has already given technology giants, like Google and Facebook, a distinct advantage over retail banks, and more so than it has fintechs (24%).
Traditional banks must move beyond prioritising product development and cost-cutting, and actually realise the opportunity that collaboration offers for their users, and, ultimately, themselves. In a world where user experience and real time is now one of the biggest competitive advantages, meaningful collaboration with third-party experts and partners can help incumbent banks not only survive but thrive in this environment.
Does the partnership spell trouble for the smaller fintechs?
Not at all. Fintechs are uniquely positioned, thanks to their huge degree of agility, to carve out significant market share in a very short period of time. In addition, these younger companies tend to prioritise collaboration as a key strategic approach to their growth and can, as a result, implement the newest and most innovative services in finance.
For more reactions to the world’s hottest new credit card, follow this link…
Remittance can be defined as a cross-border, person-to-person payment. Migrants who find employment in other countries often send part of their wages to their families who reside in their home countries. The amounts sent might traditionally be small but usually, account for a good percentage of their families fixed monthly expense. Remittance also helps in improving the families’ standard of living, improving health, and sometimes acts as a critical lifeline when there is need of money.
This could be seen in the recent inward remittance statistics (2018), where USD 78.6 billion was sent to India by the Non-Resident Indians (over 31 million in 2019 as per the data from UN Department of Economic & Social Affairs), and one major reason for such high numbers was the natural disaster that struck India (Kerala floods). As per the World Bank, a trend could be witnessed where there is an increase in the financial help that has been sent by migrant workers to their families over that period. The remittances to low and middle-income countries rose 9.6% from 2017 and recorded a high of $529 billion in 2018. In the below graph, the top 10 recipients of remittance globally in 2018 are pictured.
The World Bank estimates that the global average cost for sending remittance was 6.94% in Q1 2019, although this figure has declined by 2.73% since Q1 2009 (9.67%), it is still twice as high as the United Nations Sustainable Development Goal (SDG) target of 3%. The reason for such high remittance costs is because banks consider the remittance sector as high-risk. Cross-border remittance requires multiple credits and debits across multiple transactions before the amount reaches the final recipient. In the case of money transfer operators, the money transfers go through a network of agents across the globe and the cost of maintaining the agent is passed to the consumer who is transferring money. In the below chart, we have compared the average percentage of the total amount for sending USD 200 and USD 500 through banks, MTOs, and FinTech companies from the USA to India.
(Source: The World Bank, Remittance Prices Worldwide, available at http://remittanceprices.worldbank.org and MEDICI Research)
InstaReM (0.50%) provides the cheapest mode of remitting money from the USA to India (USD 200), while Transfast (0.77%) is the cheapest in MTO and Wells Fargo (1.21%) is the cheapest among banks.
The average time taken to remit money through bank account transfer is over 1.5 days; 1.3 days for cash, and approximately 1 day for debit/credit cards.
On average, the foreign exchange rate applied in addition to the inter-bank exchange rate for the transaction is 2.31% more by MTOs, 1.53% more by FinTechs, and 2.48% more by banks.
The highest fee levied by the remittance providers is ‘In-Branch Transfer’ through SBI California (USD 15), remittance through debit/credit card in Ria Transfer (USD 9), and remittance through an agent by MoneyGram (USD 11).
FinTech firms have impacted the remittance market by reducing the cost that was earlier decided by banks and MTOs. The new-age companies are using technology to give better services by creating automated digital platforms with better user interface, providing multiple payments, multiple currency options, and value-added service such as cash pickup. While banks and MTOs face challenges to cope up with strict regulations to be AML and CFT compliant, FinTech companies are using technology such as e-KYC and biometric verification to reduce their cost.
As FinTech companies adopt new technologies to reduce their cost and increase the coverage areas, it won’t be long before the highest amount remitted would be through FinTech.
What other aspects or corridors of remittance would you like to read about next? Write to us at firstname.lastname@example.org and let us know.
The massive global trade finance gap is the topic of conversation for many banks and FinTech firms looking to strengthen their position in the market. Banks have the customer and financial institution (FI) relationships needed to facilitate trade finance, while FinTech firms have the technology to digitize and accelerate the process for participating parties. However, both sides struggle with making trade finance profitable, and maintaining compliance.
Know Your Customer (KYC) and anti-money laundering (AML) regulatory demands are a particularly large burden on the global trade finance landscape, analysts noted. A recent survey from Strategic Treasurer found that 77 percent of banks point to KYC as the biggest hindrance to supply chain finance operations.
Experts have agreed that, despite the size of the challenge, the financial services space must be able to expand trade finance availability.
“Critically, the size of the [trade finance] gap is affecting development and investment flows and financial inclusion, which in turn is impacting business and economic growth,” wrote BNY Mellon Treasury Services CEO Paul Camp in the introduction to the FI’s latest report on the topic, “Overcoming the Trade Finance Gap: Root Causes and Remedies.”
BNY Mellon’s report came to several conclusions that align with previous analysis: Access to trade credit is a struggle, and compliance requirements, like KYC, are a top burden for financiers. Yet, perhaps the most concerning conclusion the report came to was the finding that trade finance rejection rates are on the rise at many FIs.
“Our survey has shown that a significant proportion of institutions are increasingly unable to provide trade finance, due to heightened regulatory requirements, as well as several other trends,” said Joon Kim, head of global trade product and portfolio management for BNY Mellon Treasury Services, in a statement announcing the report. “This could have serious implications, such as potentially widening the trade finance gap, compounding the lack of access to finance already being experienced by many businesses in emerging markets and impacting the strength of global trade.”
Below, PYMNTS looks at some of the data points behind these conclusions.
Thirty-three percent of FIs said trade finance rejection rates accelerated in the last year. More than half acknowledged that they have seen an acceleration in rejection rates in the last year at other institutions, findings that researchers said “underscore the challenge many businesses face when it comes to accessing funding for trade. The problems persist, and appear to be increasing.”
Fifty-three percent of regional and domestic banks said they’ve noticed an increase in trade rejection rates, compared to 24 percent of global banks and 32 percent of specialist trade providers. Nearly two-thirds of regional and domestic FIs said they have seen increases in trade finance rejection rates at other institutions, suggesting that this trend is more acute at regional institutions, compared to larger global ones. “If increases in rejection rates from regional and domestic banks are occurring, this could compound the issues experienced by these businesses — further impacting financial inclusion, business growth and the robustness of global trade,” the BNY Mellon report stated.
Thirty-four percent of survey respondents said compliance constraints are the biggest contributors to trade finance rejections, revealing another way that compliance requirements complicate the financial services industry’s efforts to address the trade finance gap. Other top factors behind rejections include an applicant’s poor credit profile, limited institutional ability to underwrite financing, a decline in correspondent banking relationships, and geopolitical and economic risk factors.
Thirty percent of respondents said enhanced technology solutions and a revised regulatory environment are key to addressing the trade finance gap. While the current regulatory climate is not so easily changed, the increased focus on technology supports a heightened focus on banks collaborating with FinTech firms to address the trade finance gap, allowing players to combine market expertise and technological capacity to facilitate access to capital.
Sixty-one percent of respondents said centralizing KYC databases would be the most effective technology solution to address compliance issues, a finding that signals how, short of changing the regulatory climate, financial services providers can turn to technology to mitigate some of the complexities of compliance that continue to hamper the trade finance industry.
Much attention has been paid in recent weeks to the impact of late payments across the pond, specifically in the U.K. However, in the U.S., there has been a bit of groundswell to curb the harm that such late payments may do to small businesses (SMBs) that work with the federal government.
As reported by Washington Technology, four U.S. representatives introduced legislation that would mandate shorter timeframes for contractor work done for the government. The legislation — which debuted from Representatives Troy Balderson (R-OH), Steve Chabot (R-OH), Jason Crow (D-CO) and Adriano Espaillat (D-NY) — is titled the “Accelerated Payments for Small Businesses Act.”
The terms would be limited to 15 days, half of the current standard contract payment window of 30 days. The bill would expand the shortened payment terms to all government agencies, well beyond the Department of Defense, where that change has already been made. It also comes in the wake of a government shutdown that stretched across five weeks, when SMB owners had to navigate sudden cash flow bumps and interruptions.
The legislation has already been endorsed by the Professional Services Council (PSC), a government contractor trade group.
“Accelerated payments can be a critical lifeline for small businesses [that] work in the federal marketplace, helping to provide access to capital and enhancing growth opportunities,” PSC Executive Vice President and Counsel Alan Chvotkin said in a release that discussed the legislation.
Oh, Canada, Too
Late payments serve as a stumbling block for smaller firms in Canada as well, where a survey from Interac said that as much as 71 percent of Canadian gig economy workers and micro-firms (businesses with fewer than five employees) “struggle to get paid on time, and spend valuable time chasing late payments.”
A full 58 percent of respondents to the Interac survey said that trying to resolve late payments serves as a drain on time and productivity. Another 58 percent of respondents said they have had to dip into personal accounts to keep their businesses afloat.
In the UK
There may be some firmer footing — and progress — when it comes to late payments in the U.K. SMB finance provider Funding Options reported that Small Business Commissioner Paul Uppal has recovered £3.4 million (more than $4,4 million USD) in late payments, with the bulk of that money (£3.1 million) recovered in the last six months. (The Small Business Commissioner position was created at the end of 2017 with the goal of helping smaller firms recover funds they are owed by larger firms.)
In a statement, Conrad Ford, chief executive officer of Funding Options, said that “the Small Business Commissioner is finally hitting its stride. That’s shown by the number of businesses it has now helped, and the money it has recovered.”
Also in the U.K., Holland & Barrett, which was criticized for late payments by Uppal, and for a “purposeful culture of poor payment practices,” said it is “addressing” the challenge. As reported, the company takes an average of 68 days to pay invoices, and 60 percent of those invoices were not paid within agreed upon and stated terms. The company said it has been reaching out to suppliers, and reviewing contracts, to improve its payments processes.
Global digital marketplace ClickBank has announced a partnership with Fully Accountable to offer a full suite of specialized accounting services for small and medium-sized eCommerce businesses, and digitally based firms.
Founded in 1998, ClickBank utilizes the world’s leading affiliate marketplace of digital and physical products to provide an eCommerce and mobile ecosystem — giving entrepreneurs an online marketplace where they can launch, scale and accelerate the sale of their own digital and physical products and services. In addition, ClickBank works with product creators, digital marketers, banks and credit card companies to prevent risks, including fraud and cyberattacks.
Through the partnership, Fully Accountable will provide ClickBank’s clients with direct access to industry-leading accounting, finance and consulting to optimize their businesses.
“We are building partnerships to ensure that our clients have a comprehensive set of services and tools to optimize their business, and increase conversion and profits. Fully Accountable is a powerful extension of this strategy,” said Kelly Householder, CEO of ClickBank, in a press release.
Fully Accountable, which launched in 2014, offers specialized accounting services for eCommerce and digitally based businesses. With clients throughout North America, Fully Accountable offers a full suite of back-office accounting, including day-to-day accounting — as well as operational and fractional CFO services to help business owners succeed with the right numbers and business strategies in place.
Earlier this month, ClickBank named Ryan Vestal as its new Chief Financial Officer. A CPA, Vestal has nearly two decades of experience — working for KPMG, KTVB News Group, Bodybuilding.com and, most recently, as the CFO of Vacasa. At ClickBank, he will manage the company’s financial management and growth strategies, including the accounting, treasury, tax and financial-planning functions.
“Ryan’s leadership and experience, focused on sound fiscal principles and growth strategies for organizations, will be a valuable asset to ClickBank,” said Householder at the time.
In the wake of the United States-Mexico-Canada (USMCA) trade agreement (the framework that outlines trade tariffs between the U.S., Mexico and Canada), analysts predict long-term impacts to supply chains as organizations adjust to shifting profit flows and supplier agreements. In an article penned for Forbes on Friday (April 19), LevaData Founder and CEO Rajesh Kalidindi predicted that “there will be unforeseen impacts and volatility arising directly from the USMCA framework.”
The greatest effect on the region’s supply chains will be the USMCA‘s impact on wages, tax incentives and foreign investments at Mexico plants — particularly for the automotive industry, since Mexico currently ranks as the second-largest vehicle supplier to the U.S. LevaData research found that nearly two-thirds of surveyed executives in the automotive industry believe the USMCA will lead to higher costs on manufacturers, linked to higher labor and raw materials costs.
“To avoid making the consumer absorb all these costs, procurement managers will be under pressure to find marginal savings,” wrote Kalidindi, who noted that supply chain professionals must re-evaluate reliance on imported components. “Because of just-in-sequence flow of sub-commodity suppliers to manufacturing centers, supply chain executives might be better off locking in new capacity and volume agreements rather than prices,” adding that flexible agreements like those seen in the technology sector should begin to appear in the automotive supply chain as well.
Furthermore, the U.S.-China trade disagreements, and adjustments to tariffs, are likely to affect trade between the U.S., Canada and Mexico as well, as microelectronics — China’s largest export — become of larger importance to car manufacturing and the overall value of vehicles. Tariff spikes on Chinese imports could increase prices and force Mexican microelectronic manufacturers to consider ramping up capacity, though Kalidindi noted that may not always be possible.
“To handle these risks,” he wrote, “procurement mangers should be using a five-year window to assess their supply chains, with an eye on sources of supplies and sub-commodities, capital appropriation, and the location of plants and other key assets.”
Corporate payments still don’t have a clear role in driving the adoption of faster payment technologies and systems in the U.S. The obvious assumption in the business-to-business (B2B) landscape is that faster payments are not only unnecessary, but unwanted, as corporates don’t necessarily need to move money immediately.
Some industry experts are beginning to challenge that notion, though, particularly when it comes to internal cash flows and treasury management processes. Still, others have said that B2B payments should be largely left out of the faster payments conversation.
The U.S. remains in its early days of faster and real-time payments adoption, so neither of these two schools of thought have been proven correct. However, regardless of how corporates adopt faster payment technologies, many experts agree that the acceleration of payments in the country will have profound effects on the broader financial services space, and those changes are likely to impact how companies manage money and operate in a new ecosystem of payments innovation.
Bill Schoch, WesPay president and CEO, and inaugural chair of the Center for Payments, said the emergence of faster payments in the U.S. reflects a larger shift in the market — one that could certainly have profound implications for business payments.
“We are seeing, what I think is, an unprecedented amount of change that is being proposed and introduced in terms of [payment] operations,” he told PYMNTS in a recent interview, emphasizing that his remarks are his personal viewpoints, and not those of WesPay or the Center for Payments. That change, he continued, is largely why WesPay and 10 other payment associations formed the Center for Payments, an initiative aimed at providing the payments ecosystem with market intelligence and guidance as innovation continues to disrupt the market.
The Center intends to guide its collective financial institution (FI) and corporate members, represented by the associations, in addressing key challenges in today’s market. Those challenges include the costs of investing in and deploying faster payment systems, understanding and meeting the demand for these technologies, and navigating a shifting operational model of payments.
When it comes to faster payment systems, fundamental industry shifts are emerging that will affect the way corporates manage funds and transact — regardless of their actual adoption of real-time and faster payment capabilities.
Schoch pointed to that operational model as a key example.
“We’re starting to look at solutions that have significantly different modes of operations,” he said. “Our [payment] systems are looking at 24/7/365 solutions. These present a really significant change, and, in some cases, disruption to the way FIs are processing payments today.”
They could also disrupt the way corporates are able to operate, as well as how treasurers and financial chiefs adjust to an always-on, always-available payments infrastructure.
Other operational changes emerging from faster payment initiatives include the focus on individual payment processing, which could be a significant disruption for corporates that historically operate on a batch-processing strategy.
“What we’re seeing evolve [with] faster [payment] systems, especially with RTP by The Clearing House or RTGS that is proposed by the Federal Reserve, is that these systems are handling each individual payment on its own,” said Schoch. “The question that I have is, ‘How are we going to bridge this batch-operating environment in which many businesses are operating today into a single-payment, on-demand conversation that is the model of the new [payment] systems we’re seeing?’”
This focus on faster, single-payment processes has also introduced shifts in payment security and fraud mitigation efforts, which are likely to make a mark on corporate payment strategies moving forward. Since these transactions are irrevocable, pre-transaction authorization and Know Your Customer (KYC) checks are even more essential in the risk mitigation process.
Schoch said the payment associations’ members are being encouraged to focus on that pre-payment initiation process to ensure that those initiating payments are actually authorized to do so, and that adequate compliance and customer checks occur to proactively address the risk of fraud and non-compliance. For businesses, this would similarly represent a significant change in operations when transactions occur.
FIs have return on investment (ROI) at the center of their faster payment strategies. Adoption and implementation will rely significantly on market demand. Indeed, it’s not B2B payments, but peer-to-peer (P2P) transactions that drive FIs’ investments in faster payment technologies today, said Schoch.
However, even with limited adoption of faster payment capabilities in the B2B market, the broader industry changes resulting from faster payment initiatives are sure to affect the way corporates transact. According to Schoch, corporate adoption of faster payments is likely to occur in a segmented way: There may be a need for companies to embrace real-time payment capabilities in the business-to-consumer (B2C) disbursement segment, for instance, while real-time payroll is also a potential use case for faster payments functionality in the corporate sphere.
The Center for Payments wants to help FIs and corporates understand where those opportunities exist, and assess whether investments in those opportunities would be profitable. FIs and corporates must also be able to compare where their industry peers are in terms of their own investments and adoption, making market intelligence an important part of progress in this space, Schoch said.
While it remains to be seen whether B2B payments will become a driver of investment and implementation for faster payments functionality, Schoch believes the corporate payments landscape will, nonetheless, see significant impacts from the nation’s progress toward payments acceleration — so FIs and corporates must be ready.