This event is free to attend. Celent clients and the media will have access to the webinar’s PowerPoint presentation after the event.

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This event is free to attend for Celent clients, flex-plan clients, and the media. Non-clients can attend for a fee of US$250. If you are unsure of your client status, please contact Bret Heither at +360.597.4846 or bheither@celent.com.

Please click here for more information.

The latest was triggered from an article that starts:

“Britain is a country full of niche shops and charming cafes that attract both locals and tourists from around the world. Unfortunately, some of these shops don’t accept card payments and aren’t realizing that they’re shutting the door to the majority of customers who no longer carry cash.”

“The research revealed that one-in-five consumers reported to have left a store in the past six months, and didn’t make a purchase because they couldn’t pay with their card.”

“Businesses in London are most likely to miss out if they don’t offer card payment services — half (50%) of consumers in the capital have left a shop in the past six months because they couldn’t pay by card. On average, Londoners walk out of shops 8.6 times a year because they can’t pay by card.”

As much as I’d like to have you all believe this, much in that first sentence is rose tinted glasses. But the journalist has a job to do, so we’ll let that slip. But the claim that 120m transactions a year are lost because some shops don’t accept cards stands out particularly.

Let’s pull this apart somewhat.

• Numbers without context are meaningless. Last year, debit cards alone were used in 48% all retail payments, totaling 7.3 billion transactions. So the number we’re talking about here is less than 2% of card transactions – rather less dramatic

• “On average, Londoners walk out of shops 8.6 times a year because they can’t pay by card. I pay with my card everywhere, and for everything”. I can’t honestly remember the last time that I couldn’t pay by card, let alone every 6 weeks that this implies. Another highly unscientific survey, but of the 10 people I asked this morning, none of those could think of an occasion either.

• Making statements that many of us will automatically dismiss because we know they can’t be true (ie. 5 million Londoners have walked out 4 times of a shop because they couldn’t pay by card in the last 6 months is patently untrue) means we’re now likely to be as skeptical about all the numbers in the release.

You’ll note I’ve not mentioned the magazine nor the company concerned. My bigger point is that there are many others who are just as guilty in this regard, and I suspect they don’t even know it. Just as Donald and Stephen laid out in the report that there are do’s and don’ts in doing demos , there are simple things not to do in research.

Here are just a few.

#1 leading questions are not necessarily unacceptable (but certainly not preferable), but misleading with results aren’t. We get that you you’ve got a solution to sell – just don’t invent a problem or a story just for it to solve.

#2 don’t confuse or conflate cause and effect – too often companies make leaps from a data point to the solution, without proving the connection. And often there isn’t. That highlights either there isn’t a problem or poorly designed research or both.

#3 what value is being generated? Stating what is intuitively known already doesn’t add value. In this instance, saying by not accepting cards you’re missing out on card transactions adds no value. Understanding why they don’t accept cards is the more valuable insight.

So what should you do?

Well, use Celent is an obvious one! We can help at various stages of the process from questionnaire design to results interpretation to the resulting PR. Equally, use a research company who follows the appropriate professional codes of practice, and consider using a PR firm. But most importantly, have a clear set of objectives – “sell more” isn’t sufficient – which can be measured to see how effective the campaign has been. Whilst doing research is getting cheaper, it isn’t free.

And finally remember the golden rule with research – 38.2% quoted statistics are made up on the spot anyway!*

*Including this one

• Osama Bedier, the Head of Google Wallet, left the company.
• Google Wallet scrapped its plans to introduce a physical card to support purchases at the physical POS.
• Then, at Google I/O Developer conference, the company made a series of announcements about new features, such as:
  • Ability to send money to friends with Gmail and Google Wallet.
  • Instant Buy Android API designed for merchants and developers selling physical goods and services who are looking to simplify the checkout experience for their customers.
  • Storing of payment credentials in Chrome browser to speed up check out online.
  • Wallet Objects API to connect any loyalty programs, offers and more to Google Wallet.

So, what do we make of it all? Well, it seems that Google’s strategy for physical stores remains in limbo. When Google re-architected its wallet solution it solved some of the challenges, such as provisioning of payment credentials by moving them to the cloud. However, its continued reliance on NFC means that it remains difficult to scale rapidly. Google was widely expected to follow PayPal’s strategy of introducing a physical card for its account, but for whatever reasons that announcement never materialised.

While Google is not pulling the plug on physical POS payments, it now appears to have re-directed its efforts to facilitating payments online, whether through desktops or mobile devices. Some observers likened its strategy as “death to PayPal by a thousand cuts.” But I think Google is taking on more than just PayPal. It seems to follow a ”best of breed” approach by incorporate interesting ideas from various players:

• With email payments, Google takes on PayPal, but also many other P2P players, from Popmoney to Dwolla.
• Instant Buy Android API sounds remarkably similar to V.me and other digital wallets designed to help customers fill out their payment and shipping details at a click of a button.
• Leveraging the browser to facilitate check-out reminds me of what Dashlane is offering via its browser API.
• And Wallet Object API is almost a direct take on Apple’s Passbook down to notifications using the location services.

Google started its payments journey in the online space (remember Google Checkout?), went after the physical POS with Google Wallet and is now coming back full circle to payments online. Google’s multiple assets, such as the Android platform, Gmail and others, combined with these new ideas certainly seem like the right ingredients to succeed. However, as every cook knows, ingredients alone are not a gurantee of success. And it will be merchants and consumers that will decide whether they like the taste of the latest offering from Google Wallet.

More recently, FMSI released its 2013 Teller Line Study, demonstrating the continued decline in branch foot traffic and growing per transaction costs experienced by its many, mostly smaller bank and credit union clients (see below). These aren’t new trends, and they’re not confined to the US. Yet, too many banks remain invested in historic operating models – despite the growing body of evidence that suggests dramatic change is needed.

I found one example of this occurring in higher education to be particularly fascinating – and bold.

The Georgia Institute of Technology (Georgia Tech) plans to offer a $7,000 online master’s degree to 10,000 new students over the next three years without hiring much more than a handful of new instructors.

Georgia Tech will work with AT&T and Udacity, the 15-month-old Silicon Valley-based company, to offer a new online master’s degree in computer science to students across the world at a sixth of the price of its current degree. The deal, announced Tuesday, is portrayed as a revolutionary attempt by a respected university, an education technology startup and a major corporate employer to drive down costs and expand higher education capacity. The story has been widely covered.

If closing branches sounds like heresy to retail banking executives in dire need of low-cost revenue growth, Imagine what the idea of offering an online master’s degree for less than 20% of the cost of a traditional, in-person lecture format will do to tenured professors heavily invested in their own traditional delivery models?

Some bankers argue the inadequacy of digital channels for sales because so many consumers desire a face-to-face experience for “complex” product sales. Is not a master’s degree complex? What about buying window treatments? Blinds.com has become the largest purveyor of window treatments through its online presence. But, buying blinds can be complex. There’s sizing, placement, color choices, degrees of light transparency, texture…the list goes on. Blinds.com addresses this by offering a by-appointment online videoconferencing experience it calls face2face. Consumers schedule an appointment with an expert online for a free video consultation. Consumers send blinds.com a picture of the window(s) in question, and the design consultant provides expert consultation at a convenient time – including showing you what your windows in your room would look like with various treatment options using the picture you provided.

To be clear, it’s too early to read the results of Georgia Tech’s experiment, but I applaud its aggressive approach to dramatically alter the cost and accessibility of higher education. Similarly aggressive banks step forward!

This event is free to attend for Celent clients, flex-plan clients, and the media. Non-clients can attend for a fee of US$250. If you are unsure of your client status, please contact Bret Heither at +360.597.4846 or bheither@celent.com.

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Here are a few tips to help Finovate speakers give a killer presentation that will have the twittersphere take notice (with apologies to those who prompted the observations):

1. First, before you do anything else, State the Problem that you’re trying to solve
2. Have a demo that works; extra credit for something live
3. Involve the audience, preferably with something live (see #2)
4. Have a catchy slogan
5. Print catchy slogan on a tee-shirt
6. Speak in a Commonwealth accent (Australian, British, Kiwi, South African – they’re all good).  Americans think you sound smart
7. Avoid using the terms “security,” “identity,” or “authentication.”  These are all terribly important, but from a presentation perspective, you’re starting from a hole ten feet deep.

Good luck to all of you presenting! And kudos, by the way, to Finovate for their iOS and Android apps.

This is a confidential, bank-only forum, with an emphasis on idea exchange. Registration for this event is limited to three contacts per bank. We are encouraging each bank to send their head of mobile, the head of online banking, and the head of branch. Questions? Please contact Bret Heither at bheither@celent.com or +1.360.597.4846.

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My immediate thought was that merchant-funded rewards (MFR) have finally landed in the UK. However, after the first inspection, it seems that it’s MFR with a twist. Most MFR programmes in the US are focused on issuers and their cardholders. Barclaycard’s offers are available to any UK cardholder; it would appear that Barclaycard is building more on its acquiring rather than issuing assets – it is one of the largest UK acquirers and sees a lot of credit and debit card transactions through its merchant relationships. The other difference is that the offers don’t appear to be linked to the card for seamless redemption. Instead, they are delivered as vouchers which the customers have to present to the merchants to qualify for a discount. Finally, at least at the start, there are offers which are generic and available to all customers – all I had to do to get a 5p off per litre of fuel at Shell was to enter my email address and the PDF voucher arrived promptly for me to print it out and present to the cashier. The website did not know anything about me and the offer was not targetted to me at all. Apparently, if and when the customers register and provide more details about themselves, the website then uses that information to target; until then, the customers can get access to generic offers.

Another interesting thing was that Barclaycard appeared to be introducing a new digital wallet called bPay. According to Bespoke Offer website, bPay “can be used with Bespoke and other retailers, where you see the bPay button.” Customers “can add new and additional cards to bPay anytime they are at the checkout.” The strange thing is that information about it was hidden deep inside the FAQ section of Bespoke Offers, so I wonder if this is something that Barclaycard will be officially launching later?

There is no shortage of voucher schemes in the UK. Weve, the JV of leading UK MNOs is just one the latest examples of companies ramping up its mobile voucher solution. After pulling the plug of Freedom, Barclaycard was always going to come back strongly with the loyalty proposition. Only time will tell if the new Bespoke Offers proposition will stand out in the increasingly busy space.

#1. Real time isn’t always really real-time

The most frequent myth is that everything end-to-end is suddenly instant. In reality, most (though not all) real-time systems are real-time in notification and authorisation, not settlement. In fact, in some systems in certain situations, settlement can take place days later. The starting point should be what needs to happen, and at what speed. In deed, for many payments, its the certainty, not the speed that matters.

#2 Real time isn’t p2p

One belief is that there is a pent-up demand for real time to enable p2p (or perhaps, more accurately, a2a) transactions. The use case is often quoted to be that of splitting a dinner check – one person pays the restaurant, the rest then have to find a way to pay the payer. But in reality, how often does that happen? The default in the UK at least would be tell the restaurant how to split the check across multiple cards. Even if that weren’t the case, the numbers of times that this happens would not be large enough to justify the investment on its own. The starting point should be use case driven though: who would benefit from sending – or receiving – funds faster than the current method. In most systems so far, these have been typically b2c or c2b, or indeed, mandated so the business case isn’t the issue.

#3. Real time isn’t just payments

In many instances around the world, real-time systems are often running 24/7. That poses, at the very least, 2 problems. Firstly, what other systems are required to run in real time, 24/7? Fraud checking, authorisation, notification and authentication systems are amongst the obvious, but banks have found dependencies on many others, and not just in the sending side. Secondly, maintaining systems becomes far more complicated if they have to always be available, and being “always on” means that maintenance becomes more important than ever.