Coin Card: A Compelling Package, But Will it Work in Enough Places?

coin_boxI finally received my Coin this week and I’m about to load some cards and head to the grocery store (or maybe the new Amazon Bookstore). (Update: It worked the first two tries, at a U.S. Bank ATM and grocery store POS. But, alas the third time was not a charm as it wouldn’t read at hardware store POS despite a valiant effort by the clerk. Attempt #4 with a coffee shop closed-loop card worked, barely, taking 10 to 15 swipes.)

But before I get too disillusioned by the real-world experience, I wanted to pen a column about why, even in a world with Apple Pay, Android Pay and Chase Pay, the supercharged-plastic Coin delivers substantial perceived value on a number of fronts.

Here’s the value for someone like me that that typically carries 6 credit/debit cards when traveling (2 personal, 2 business, 1 ATM, 1 AMEX) and 4 or 5 around town:

Extra security (peace of mind): Fewer plastic cards to lose = less worry
+
Simplifies travel prep: Easier to verify your physical wallet inventory before heading out and zero chance of forgetting a card (assuming you don’t forget Coin)
+
More card options: Can store all your cards, including mag stripe loyalty/prepaid cards, in mobile wallet (max of 8 in Coin plastic at any one time) 
+
Slims physical wallet: Going from 10 pieces of plastic to 4 (Coin, backup plastic card, drivers license, health insurance)
+
Reference for online usage: The Coin mobile wallet is a handy and secure place to store card details and customer service numbers
+
Cash backup: I stopped carrying an ATM card years ago since I only used it a few times per year. But every once in a while, I could really use cash. Having Coin in my wallet solves that.
+
X-factor: For early fintech adopters, it’s a cool little package and would make a nice gift for the fintech geek who has everything.

On the other hand, I’m toast if I go “Coin only” and lose it or it doesn’t work at a particular terminal. Most bloggers are reporting 80% to 90% success rates. So in reality, you need to carry at least 1 credit card as emergency backup.

Bottom line: It’s a nifty device, but the swipe success rate is crucial. If Coin can get to a 95%+, I think it will be worth the $100 to a sizable group of fairly well-heeled techies. However, sub-90% makes it much less interesting since on one wants to be that guy holding up the checkout line with his fancy black card.

Assuming it works, there is no single Coin benefit worth $100. But the combination of seven makes it compelling (though it would be MUCH easier to sell at $30 or $4o….no one paid over $50 in the pre-order frenzy two years ago). Coin could bolster its security positioning by partnering with BillGuard or others to scan card transactions looking for fraud.

Features: Capital One to Add Receipt Capture to Mobile App

capitalone_reciept_capture

Capital One sent an email (see below) to customers two days ago promoting a new version of its Wallet mobile app. Although it’s not mentioned in the email copy, when you click “Get Started” the resulting webpage (see above) reveals that the bank is about to add receipt capture to its app.

Normally, I’d save this news for a Feature Friday post. But I’m so excited to finally have integrated receipt capture on one of my cards, I just had hit publish. Of course, it’s “coming soon” so I can’t give you any insight into how it works, or if there is an OCR component. But the website copy does mention some level of integration, just not whether its automatic (OCR) or manual:

Simply snap a photo to connect a receipt with a charge in the app.  

American Express offers this capability, Chase on its Ink small biz app, as well as Expensify and a few other fintech startups. But Capital One is the first big Visa/MasterCard consumer issuer (that I know of) with the feature. I’ll let you know how it works.

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Capital One email announcing remodeled native Wallet app (31 Aug 2015):

capone_email_redesigned_app

 

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Update (3 Sep 2015): I omitted the Chase Ink card in the original post.

Help, My Apple Pay is Not Working

applepay_launch_bofa

The last few times (3 or 4?) I’ve tried to use Apple Pay it’s not worked. And when that happens at the POS you pretty much look like an idiot waving your fancy phone around and smacking it against the terminal (as if that would help). So yeah, I’m that guy holding up the line (though in my defense, not nearly as long as that person that still uses paper checks).

And besides looking like a fool, when Apple Pay is on the fritz I’m at a bit of a loss as to what to do next. I tweeted this today:

While it may appear snarky, it’s a serious question. When Apple Pay doesn’t work, there is no clear path to resolution. So here is what happened when I tried the various methods in my tweet.

A. Google it

At first glance, there seems to be promising results, including Apple Support. But alas, its FAQ makes no mention of it “not working,” but there was a way to get through the help topics and to an online/phone support area (see C below). And while there is much discussion on the Apple forums, the best advice was to “reboot” your phone, which is surprisingly effective for many.

Grade: Incomplete. While I was able to find Apple support within a few minutes, I had to go to the chatbot for a full diagnosis (see B below)

B. Contact Apple

applepay_support_choicesDuring my Google search I stumbled into the correct area to get to Apple Care support (see A above). While I had to go through a few screens in the self-service area, it only took about 30 seconds to get to the one that offered a choice of online chat, call center (with 2 minute estimated wait time), or alternatively, I could schedule a call (see inset).

As always, I chose online chat. The chatbot was good (not sure if/when a human stepped in), but it took a full 13 minutes to diagnose the problem (including looking up my serial number at the outset). Apple suggested I delete the existing payment card and add the new one, which was the right answer.

Alternatively, if you try to figure out the problem out directly on your phone, a search for “Apple Pay” within the phone (ie. Spotlight Search) directs users to the Passbook app. If you select the “i” button there for more information, you are directed to the bank’s call center (see C below). Alternatively, you can navigate directly to Settings, find Passbook & Apple Pay (below the fold), and locate the bank contact number.

Grade: C >> for the 13 minutes it took through Apple Care chat support

C. Call the bank (BofA)

I had just a single card, issued by Bank of America, hooked to Apple Pay. While I try to avoid call centers if at all possible (though, I have to say, I have been very happy with BofA call center support in the past), I called the number on the back. And while SIRI or whatever they call their voice recognition there, was not able to understand Apple Pay questions (“I hear that you want to make a payment, is that right?”) I was through authentication and to a live operator in about 3 minutes. I’d already figured out the problem during my 13 minutes with Apple Care (old card number), so I didn’t torture BofA and play dumb. But had I not known the answer already, the CSR was prepared to get Apple Pay support on the line for help.

Grade: B- >> for being able to get to Apple Pay phone support within 4 to 5 minutes (though did not test their diagnostic skills)

D. Use the mag stripe

Honestly, if I wasn’t into this stuff for my job, I would have just started using the mag strip card and forgot about Apple Pay until v2.0.

Grade: A >> for the 5 to 7 seconds it took to get the plastic out of my wallet, swipe, and stop holding up the line

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The Fix

bofa_applepay_dontuseAs mentioned in B above, my Apple Pay problem could be solved either through the Passbook app itself or through the Passbook settings within the iPhone Settings area.

Here’s what I saw when clicking on my “card” in Passbook (see inset).

And that was the reason why Apple Pay had stopped functioning. Bank of America had revoked my card a few months ago during a breach related reissue.

But I’m not sure how I was supposed to know that I needed to update my Apple Pay card. I’ve searched my email from Bank of America, but I see no message from them on the subject. (While it could have been trapped by the SPAM filters, that would be unusual for messages from my card issuer.)

It’s completely understandable why the bank would pull my card out of Apple Pay if it was cancelled and replaced by a new number. But they either need to inform me, along with good instructions on what to do next, or better, simply replace my old card with the new one within Apple Pay, with notification of course (see update below).

But that’s probably v2.0 customer support. Until then, I’m glad there’s still a mag stripe as backup.

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Update (19 Aug 2015): Apparently, Citibank is automatically replacing new card numbers into Apple Pay when the old one is canceled. Not sure if this applies to its entire portfolio or selected customers. (Thanks to Ian Kar for the pointer).

Feature Friday: Capital One Helps Users Identify Recurring Charges After Card Reissue

capitalone_mobileCard reissues after a data breach, or lost/stolen situation, are annoying for cardholders. But it’s even worse for the issuer who has to pay for a new card, hound the customer to activate it, handle customer service calls, and then risk losing recurring revenues from now-broken automated pre-authorized charges.

So kudos to Capital One for taking an important step in solving this problem.

Earlier this week I received a new card and number from Capital One, presumably because my card had been involved in a breach. I am not aware of any unauthorized attempts to use it.

In a followup email this morning, the giant issuer reminded me to activate the new card. That’s a fairly typical technique these days. But the help didn’t end there. The bank provided a list of likely merchants where I may need to update card info to avoid the charge being denied (see screenshot below).

That’s great customer service and something I’ve not seen before. But of course I want more. The list I received was primarily merchants where I made one-off payments. Who has a recurring charge with United Airlines? So it needs to be scrubbed better. And it would help to include the most recent charge amount and number of charges to help identify actual recurring charges.

And ultimately, it would be even better if the process was semi-automatic. Let me respond to the email with a simple yes/no response for each merchant indicating if I wanted them to continue the automatic billing under the new card number. Or at least provide links to reduce the friction of the task.

But all-in-all, a welcome improvement.

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Capital One email to cardholder (19 June 2015)

capitalone_email_recurring_new

 

 

Riding the Uber Wave: Capital One Rebates 20% for 1 Year

uber_capitalone_phoneLast week, Capital One launched a national marketing promotion with Uber that provides a 20% rebate on rides for one year. And unlike many (most?) card offers, it’s good for both new and existing Capital One customers. However, it applies only to the bank’s Quicksilver cash-back card, so I’m out of luck with my Capital One Venture card.

But they did throw us non-Quicksilver customers a bone yesterday, with an email (see below) offering two free Uber rides (up to $30 each). For me, that’s probably about the same as the 20% rebate, so I was ready to fire up the app and swap out my Bank of America card. But wait, there’s that pesky fine print again. It turns out the free rides are only for new Uber customers. Out of luck again.

capone_uber_landder

Analysis
Overall, this is a great promotion. The bank gets both new cardholders plus a pile of Capital One cards stored in Uber’s app, a great retention tool (the primary goal?) along with a long-term revenue stream (albeit, not enough to recoup the cost of the 20% rebates, unless Uber is picking up a big chunk of the rebate).

The only thing I don’t like is the disingenuous email to non-Quicksilver customers. Capital One alludes to the fact that the free rides are for new Uber users (see highlighted body copy in screenshot below). But that statement is easy to overlook or misinterpret. It’s only when you get to the tiny type below, which is further hidden in a gray background (see highlighted fine print below), that the “new Uber customer” requirement is explicitly stated.

Why not just come out an say it clearly in the body of the email (or even in the subject line)? Existing Uber customers are going to find anyway when they try to redeem. Just be clear up front and save everyone the hassle! Better yet, don’t send the email to cardholders who are already using Uber (that could have been determined with an email match for me).

Final thought. Why not provide all cardholders an incentive to enter any Capital One card into the Uber app? For rewards cardholders remind them they can pay for their Uber rides with points (eg. Purchase Eraser). Or how about a sweeps? For example, one out of every 100 rides (or 1,000) are free to Capital One cardholders until May 30. That could be funded through interchange alone.

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Capital One email to its Venture cardholders (23 April 2015)
Note: Highlighting mine

capitalone_uber_email

First Look: Square’s New Cashtags for Small Business & Non-Profits

cashtag_wikipedia
There has been no shortage of major announcements in the payments space in the past few weeks.

  • Facebook added a “send money” option to its messaging service
  • Starbucks added pre-ordering into 650 northwestern U.S. locations in advance of a national rollout
  • PayPal acquired the platform upon which MCX is built on

And yesterday, Square launched an SMB version of its Square Cash, brilliantly named Cashtags. Any person, business, or non-profit can create a cashtag out of its name (first-come, first-served) at cash.me/$yourname. Then to pay by debit card, users click on your cashtag, enter their debit card number, postal code, CVV and amount to pay. Space for an optional message to the business is also included. First time users also have to confirm their email address or mobile phone number, before the payment is sent.

For businesses, it’s not much different than using PayPal. But the setup is slightly less intimidating Square onboards new merchants gradually, so as to not scare them off before finishing the process. When I set up my original cashtag, all they asked was my email address or mobile phone number, which was subsequently verified. It was only later when I was playing with that app, that they hit me up for my full name and last 4 digits of my social security number.

The big difference is in pricing. Square Cash business recipients pay a 1.5% transaction fee (with no per-transaction flat fee), undercutting PayPal business account fees by about 50% (both Square & PayPal have free options for non-business person to person transfers). I sent a few bucks off to Wikipedia and it worked perfectly (see screenshot above).  As it should, the debit authorization showed up right away in online banking (see below, from U.S. Bank).

cashtag debit confirmation

 

FI Opportunities & Threats:

For financial institutions not actively involved in the acquiring business, here’s a chance to build ties between your business debit card and your small-business (SMB) customers, at little cost and with no cannibalization of existing revenues. The zero-cost approach is to simply educate your customers about this new option from Square. Since cashtags are available on a first-come-first-served basis, it would make a timely subject for an email, blog post, or online article.

A more involved strategy would be to incorporate Square Cash and Cashtags directly into secure online banking. While Square has not published an API to make integration easier, access to Square Cash could be added to your dashboard, even though it would still run through the Square UI.

The main downside for at least endorsing Square, and it’s potentially a sticky issue, is that Square Cash/Cashtags is part of a larger payment and lending business being built by Square. It’s possible, but not all that likely, that at some point Square could be considered a material competitor to your core business. However, if you are not in the acquiring business, you have already opened the door for others to provide payment services to your customers. Square is probably less of a direct threat than Chase, Wells Fargo or other major merchant acquirers.

And regardless of whether or not you steer customers to Square, you can mine debit card transaction history. Personal checking accounts with numerous Square and/or PayPal transactions are likely being used by someone with recurring revenues. That’s your first clue there is a potential new business banking customer in the mix.