Alternative marketing thinking

In an interesting chat with Vikram Akula, the founder and CEO of SKS Microfinance, India’s fastest growing microfinance institution, Wharton reports on the emerging trends in microfinance. Akula talks about how once the RBI recognises the full potential of mobile banking, regulations will be eased so that time and money are not wasted in traditional brick and mortar infrastructure. Akula also talks about the constraints that come up, the dispute about high interest rates charged from the poor and how the future is looking for SKS.

A recent survey in the US has found that lack of customer awareness is the top challenge impeding the usage and adoption of contactless payment systems. According to technology research firm Aberdeen, 63% of Best-in-Class companies that have already adopted contactless payments at retail locations are responding to the challenge of customer awareness by defining a set of return-on-investment (ROI) objectives and goals surrounding contactless implementation. Aberdeen’s research shows that forty-one percent (41%) of the companies have implemented a contactless solution, and 41% are considering implementation. Of the Best-in-Class that have contactless technology, 91% have improved their total number of transactions, and 100% have 80% or more of their customers extremely satisfied. Read more from Bloomberg.

In an effort to stop credit card fraud, a new campaign has been launched by the US National Retail Federation to get credit card companies to permit retailers to not store credit card numbers. The problem is that many retailers use customer credit card numbers to identify purchases with specific consumers as a convenient link into CRM (customer relationship management) systems. This, especially useful for customers who weren’t using the traditional retailer-issued loyalty card. The proposal could sharply minimize how long the sensitive credit card data is in the retailer’s system, but it’s not likely to eliminate it. More from eWeek.

UK is jumping onto the mobile payment bandwagon, accordint to Chris Partridge from the Observer. The story talks about how phone users in the UK will soon be able to make payments through their phone. These phones will have the same security as chip and pin cards, in addition to the contactless communication system used in transport for London’s Oyster Travel Card. The phone will record every transaction made, all balances will be made available to view at all times and in case of loss or theft, the phone can be immobilized remotely. Read the entire article here. Barclaycard is to run a trial of this new mobile currency, on the back of its new contactless card launched in September, One Pulse.

Finextra reports that Silicon Valley-based KeyPoint Credit Union has teamed with mobile banking outfit MShift to develop an application that enables customers to access their Web accounts from within online social networking site Facebook. KeyPoint CU - which serves technology companies including Apple and Google - is the first financial institution to launch account access via Facebook. The application provides customers with secure, one-click access to online bank account information. The CU says all account information data is encrypted with a minimum of 128 bits and no user data is stored on the Facebook servers. The system also provides users with information from and about KeyPoint CU and includes a social forum for members. The application has been developed using MShift’s mobile banking technology and the Facebook API, which enables companies to integrate applications and gain access to Facebook’s 24 million users. “The Facebook banking application is our latest secure channel providing access for our high speed members,” says Juli Anne Callis, EVP and COO, KeyPoint CU.

“Our current membership is significantly younger and more globally mobile than the typical credit union member. That means we need to be out there scouting for the ways to bring value in the form of the latest convenience to our existing members or risk losing them,” adds Callis. “What better way to make a difference in the overly commoditised retail banking market, than to link our banking service into our member life style experience and their main social networking platform.” Read the press note.

Wells Fargo has announced Wells Fargo Mobile service: text banking. This is in addition to browser based that the bank already offers. The service enables users to connect their Wells Fargo accounts through a mobile phone, through text messaging. The feature has been designed to help users get access to many of the bank’s services by using a simple text messages. Balance enquiry, for instance can be accessedd by sending ‘bal’ as an SMS to the banks short code number. The service is so simple that any phone with SMS capability can reach the bank using the phone. There are some six simple services that can be reached using this service and making this simple is the ‘help’ feature, that will SMS back with instructions on how to use the service, a nice feature that will allow people who do not use the service regularly to still remember and access specific areas that need to reach. Another feature that simplifies the whole things is the fact that there is no need to remember additional usernames and passwords, as it requires only an online banking registration. Read more from the FAQ section of the Wells Fargo site. While on the business of mobile banking, Visa is offering a card to card money transfer facility via the mobile phone in India using mCheck. Read the Visa Press release.

Sir Richard Branson’s Virgin Money launched the next stage of its US expansion, with a novel new service enabling friends and families to lend to each other. Earlier this year Virgin Money had acquired CircleLending, a specialist financial services company that pioneered a business model through which family members or friends can lend money to one another at agreed rates of interest. Through CircleLending, Virgin Money will administer and manage the loans, arranging collateral, interest deductions and repayments, with the rate charged typically 2 to 3 percentage points below what the borrower could find in the commercial sector. In return, Virgin Money USA earns an up-front fee plus ongoing charges, with fees starting from $100 for a personal loan and rising to $699 for a mortgage. More in the Independent UK.

The way we transfer money online could change with the launch of Revolution Money, an innovative new payment platform created to transform the payment industry by drastically altering the economics through Internet-based technology. The beauty of the idea is that it also looks at small everyday transactions, like collecting contributions for an office party, or getting a friend to pay his share of the dinner bill. And the big thing going for the company is that it has the backing of some of the world’s banking heavyweights. The whole thing is being fronted by Steve Case, the founder of AOL. Revolution Money introduced its first two flagship offerings - Revolution MoneyExchange, the first free money transfer service that powers online transactions, and RevolutionCard, the industry’s first anonymous, PIN- protected credit card. More in Tech Journal. Also of interest, an online financial comparison site Pertuity.

Technewsworld writes about Arby’s, a restaurant chain with some 1000 outlets, that has invested in a contactless card network across the US. While the roll out has been expensive for the chain, they believe the whole effort will be worthwhile. For consumers, contactless technology offers convenience. There’s no personal identification number to enter and no need to swipe a card, and transactions under $25 don’t require signatures. Users simply hold the cards about an inch away from the readers to activate them. For Arby’s speed is important, and contactless promise faster transaction times. American Express claims that transactions using its ExpressPay-enabled credit cards can be completed in about one-third the time of a cash transaction and about half the time of a swipe-card transaction. The biggest problem that chains like Arby’s face just now is the low levels of contactless penetration(in single digits at the moment). One of the stumbling blocks for the technology becoming universal is getting establishments who are not very concerned with speed of transactions to invest in the POS terminals that are needed to make these transactions happen. Read more.

The smart folks at Organic recently featured the new PayPal site (This link takes you to a holding page that will let you sample the Beta page or the old site, now how many traditional brands are willing to let you do this). And how the redesign has brought in a great amount of simplicity to the whole experience. The new site, they say, is a great example of focusing exclusively on the user, and not worrying about PayPal’s internal priorities, something many brands are still unwilling to let go. The old site, for instance, used Paypal-centric language like merchant. The new site though uses much consumer-oriented language and calls-to-action. The information hierarchy is much better with login top left, streamlined navigation and different experiences for users and merchants. The new site seems much better organized around what customers want and when they want it. It’s easier for a user to find the information they need quickly and easily and to get their questions answered. We wrote about the redesign of the Wells Fargo site in this newsletter a few weeks ago.