Convenience Over Customer Service? How Online Banks Appeal to a Changing Clientele

There is an unfortunate tradeoff with the implementation of new technology: the more advanced technology becomes, the less personalized our world is as a result. When simple jobs can be performed by robots, as many now can, there’s no need to invest the money into human labor. At certain restaurants, people can place their orders via iPads. You can pay your friends back through an app on your phone without having to travel to an ATM to take out cash. You can book an entire vacation from your phone. You can place an order online without the need to talk with a human until your food arrives at your doorstep. Luckily, the need and desire for human interaction in the way we conduct business still exists, so technology has not eclipsed customer service entirely. But it seems that things could be headed in that direction, and banks are one sector where we can already see that trend.

Without that crucial customer service element, what remains to retain customers? As paradoxical as it may sound, banks are attracting new customers by keeping them away. “Banks are finding new growth opportunities through online and mobile channels, proving once more that consumers are increasingly attracted to the convenience and speed of mobile and online solutions,” says letstalkpayments.com.

When so many people, especially the millennial generation, turn to their phones for just about everything, it only makes sense that banks would tap into that lucrative channel, prioritizing convenience over customer service. Bank transactions dropped off by nearly 50 percent between 1992 and 2012, as online and mobile capabilities came into play. In order to retain customers, banks have had to play by new rules to appeal to a changing clientele.

Some banks are combining new technologies with traditional banking elements to appeal to a younger generation. For example, Savings Bank of Danbury in Connecticut just opened a new branch, and they pulled out all the bells and whistles to cater to tech-savvy millennials. Instead of a person, a large screen recounting the bank’s history in an ongoing loop greets customers as they walk through the door. The new branch features lounges with iPads and laptops where customers can interact with bank staff through technology, rather than face-to-face in a traditional teller line.  

According to Martin J. Geitz, president of Simsbury Bank, the millennial generation are outgrowing the baby boomer generation, and as such are coming to define the economy. Says Geitz:

We are now embarking on the threshold of the millennial generation driving the economy as so many are entering the workforce and their demands and tastes for products and services will really define what banks offer and other consumer-driven products. The millennial generation grew up with a smartphone in their pocket. They have a different relationship with technology than we do. It’s important that we provide functionality at their fingertips.

Banks are offering a variety of features that allow customers to conduct all of their finance needs remotely, without ever setting foot in a bank. For instance, people can now transfer money to one another through cardless ATMs and checks can be deposited through an app on one’s phone just by taking a picture of it. In fact, there is an entirely new breed of banks that’s risen up in response that is moving away from brick and mortar locations entirely, operating solely online. An example of an online bank is Simple, aptly named for its mission to make the banking process as simple and convenient as possible. The bank gained more than 100,00 customers in its first two years and was promptly snatched up by Spain’s second largest bank, Banco Bilbao Vizcaya Argentaria (BBVA).

For the time being, brick and mortar banks are here to stay. They may not be the grand, pillared buildings of years past, with imposing high ceilings and marble floors, but nonetheless, there is a large fraction of the general populace that doesn’t fully embrace or understand technology, and still desires a certain degree of customer service. Mobile banking technology will continue to expand, but it will need to do so in such a way that combines the service of traditional banks with the convenience of online banking.

This blog was originally published on jacobparkerbowles.co.uk. 

Are We Sacrificing Security for Convenience?

How safe are mobile payment apps like Venmo?

How many times have you gone out for dinner and drinks with friends, and when it comes time to pay the bill, you either end up paying more than you should have when someone suggests you split the bill evenly or you opt not to split the bill at all, so you scramble to figure out what you owe, and everyone is throwing down bills into a messy pile? Trying to split a bill between several people can get chaotic; thus, Venmo was born. You’ve probably heard of Venmo or other apps like it. Even if you don’t use Venmo yourself, you’ve likely heard something like, “I’ve got it. Just Venmo me!”

Mobile payments apps like Venmo have taken the world of mobile technology by storm. Many major restaurant chains and stores, such as Starbucks, have their own versions of mobile payment apps, so that loyal customers can keep a balance to pull from whenever they need their coffee fix. Last May, things turned bitter like a bad cup of coffee when multiple media stations such as CNN and ABC reported that the Starbucks app had been hacked and money stolen from multiple customer accounts. Starbucks claimed in an official statement, however, that these were false accusations.

So what is the real story here? If these apps sound almost too good to be true, well that may actually be the case. As the leader in mobile payment processing, Venmo, owned by Paypal, processes hundreds of millions of dollars of transactions each month. In the third quarter of 2014, Venmo processed more than $700 million in payments which was nearly five times the volume of transactions it had just a year earlier.

Yet, it may be that Venmo took off before it was properly equipped to handle such a steady stream of transactions. According to Slate staffwriter Alison Griswold, “For all its promise, Venmo’s popularity seems to be outpacing its customer-support capabilities.” In November 2014, three years after Venmo lefts its beta phase, it had only 70 full-time employees in contrast to parent company Pay Pal’s more than 10,000. There is no dedicated customer service phone line and the company is reportedly slow to respond to customer concerns and complaints. Additionally, Venmo does not send out an alert if login credentials are changed from within the account.

If Venmo’s customer service is lagging, it raises the question of just how secure this wildly popular app really is. As popular as mobile payment technology is becoming, it has not yet reached its full potential, and that is due to a lack of trust. Security concerns are the primary reason many consumers remain reluctant to adopt mobile payments, according to Wired.

In general, according to The Huffington Post, mobile payment apps are still in their infancy, and as such, are by no means foolproof against hackers. Also, smart phones themselves are not the most secure means of making transactions, because you must rely on several different forms of technology to come together safely and efficiently. Your phone can easily be broken into even with a password, the various softwares that power mobile apps are vulnerable to security breaches, and the wireless signals put out by phones (especially if you are using a public wifi network) are prone to being hacked.

I hope, by raising your awareness to the security concerns associated with mobile payment apps, that I did not scare you away from this technology entirely, because while it still has a lot of kinks to work out, there are security threats with just about every form of digital technology out there. Just a few simple suggestions to keep in mind: try using a platform that requires two-factor authentication and always use unique passwords for all of your accounts. That way, hackers will be less likely to steal information from more than one of your accounts. As long as you are smart about taking added precautions to protect your private information, there’s nothing keeping you from giving some of these mobile payment apps a try.

The Top 7 Myths about Payment Processing – Debunked.

I’ve scoured the web for the most common myths regarding payment processing, and why North Payments really means what it says.

1.     “We have 200+ Payment Methods”

Most processors consider each type of credit card and gateway as a method. North Payments really does have over 200 payment methods that the merchant can choose from. We work with over 40 acquiring banks, we are not restricted to one bank, so we can provide as many and any payment method a merchant wishes to take, from China UnionPay to American Express to Apple Pay and PayPal.

2.     “We offer subscription payments.”

North Payments really does offer recurring payments and transactions, and not just via a third party or a wallet. From the start of the application process, we can integrate recurring payments using an acquiring bank in your payment gateway at no extra cost.

3.     “We have easy onboarding”

Most payment processors are just a payment gateway which means you must find your own acquiring bank to provide you with an internet merchant account. At North Payments, we provide both the gateway and an internet merchant account in one package so onboarding really is quick and easy.

4.     “We help with chargebacks and refunds”

It is true that we make money from every transaction you make, regardless of whether the transaction is successful or not, however unlike other payment processors North Payments has a chargeback programme in place to help merchants be proactive and reduce the number of chargebacks they receive. We use a risk reporting software that will also detect and stop fraud before they even become chargebacks. We want our merchants to be as successful as possible.

5.     “We have transparency in pricing”

North Payments is 100% transparent. When you sign a contract with us, we explain that dealing with chargebacks costs extra. However, unlike other payment processors, we have absolutely no monthly or set-up fees and all our processing rates are dependent on your volumes. We do not have a tiered rates system.

6.     “We improve authorisation rates”

At North Payments, we have proof that we have helped one of our clients increase transaction approval rate by 30%, thereby increasing their revenue. We approve more transactions than other payment processors as our fraud and risk technology is the best out there, so it really only stops fraudulent transactions and not real ones.

7.     “We can help anyone sell online”

We really can, as we offer an internet merchant account and payment gateway in one package. It doesn’t matter how many countries you want to trade in, we can provide one acquirer to deal with all your trading needs, unlike other payment processors who will only provide a gateway and also require you to have a separate merchant account for each country you wish to trade in.

Why is the progression of electronic B2B payments so slow?

It is important that B2B businesses switch to electronic payments to keep up with the fast pace of today’s demands, as cheques will soon become irrelevant and too slow for expanding businesses however, the electronification of business-to-business (B2B) supplier payments has been progressing at a much slower, albeit steady, pace compared to business-to-consumer (B2C) payments. There has been a lot of speculation as to why B2B payment conversion is so slow.

There are a few problems that have cropped up regarding B2B electronic payment conversion, which is causing the process to be so slow. All parties involved in making payments want to be able to control every aspect of their payment. Payers want to control the timing of disbursements; suppliers want to accelerate collection of payments and this process is something that is not so easy to control with automatic electronic payments when you have data to consider at each step of the supply chain.

Firstly, most businesses have many customers and suppliers. It is not unusual, for example, for a large B2B company to have hundreds of thousands of suppliers in their vendor database. Electronic payments become too time-consuming when you have to go to each individual company, find out their account details, in order to send them a payment, and then store and update these details when necessary. On the other hand, when making cheque payments, all you need to know is your supplier’s address – and that should already be in your database.

There are also regulatory issues: Different governments have different rules and ways in which they view the flow of a payment, and companies need to deal with that in order to comply with separate laws. This also takes time and effort to implement when dealing with electronic payments.

The third issue is the business model in B2B payments. Business models in B2C are really simple and understood by the consumer, but in B2B, different supply chains have different rules, different interactions within the business and with other companies and even different B2B companies have different business models. A more flexible approach to these different interactions and the ability to deliver payments that work around different business models needs to be introduced to speed up the uptake of electronic payments.

Technology changes also need to be addressed. In the B2B space, data matters. Data lives in back office information systems – in ERP, purchase-to-pay systems, order-to-cash systems, electronic invoicing systems, and more. The data received at certain points in the supply chain can determine or change the destination, amount, speed or volume of a certain payment. Cheques can be cancelled at any time, whereas when electronic payments are sent they are automatic and instant. What is needed is the ability to change the payment once it has been sent electronically.

North Payments offers fast application to combat these issues, along with competitive rates. North Payments offers scalable and flexible solutions to adapt to any business model. We are able to change payment modules at the press of a button, leaving a business to quickly change payment data according to business models or data received at different intervals in the supply chain.

North Payments can help take B2B companies into the digital age, paving the way for more similar companies to do the same.

North Payments’ payment solutions are fully integrated to support Apple Pay

North Payments, a leading UK-based provider of online payment technology, is one of the first payment processing providers in Europe that already has the technology in place to fully support payments from Apple Pay.

Apple Pay is designed to replace your wallet. Installed on the iPhone 6 models and iWatch is a Near Field Communication (NFC) antenna so a customer simply has to hold their Apple Pay enabled smartphone near a contactless payment reader with a finger on the Touch ID sensor, Apple’s fingerprint-scanning technology, in order to pay for anything they want. Apple Pay can also be used to pay within apps just as quickly and easily. Simply select Apple Pay to pay and place your finger over the Touch ID and the customer has paid.

Security fears that have halted the digital and mobile payments revolution may be a thing of the past as using Apple Pay could be more secure than using a credit or debit card. Apple Pay assigns each card a unique device account number, which is then used to process the payment instead of using your card number. No sensitive details, such as a customer’s name or card expiry date, are stored on Apple servers and no transaction history is saved.

Companies like Google, with their wallet Google Wallet solution, have previously tried to change the way we make payments, with a click or a swipe to replace cards, but with little success. With Apple’s established influence, and the fact their payment technology is already implemented on their newest models of smartphones, Apple Pay is the first time that there could be a real mainstream digital payment revolution accessible to all. It is clear too that Apple wants this to be a global reality, as Apple Pay is integrated with all the major credit and debit cards in the USA including VISA, MasterCard and American Express.

North Payments is always at the forefront of payment technology with many solutions and plugins in place to support any eCommerce platform and alternative payment method a merchant wishes to use. As such, North Payments has launched a plugin to support Apple Pay payments, which is available now to merchants. North Payments understands that consumers want to buy into Apple’s brand and a merchant who is able to implement Apple Pay as an alternative payment method into a checkout system will hold an advantage to their competitors, not only for the speed and simplicity of use but also for the safety and security the customer feels when using Apple Pay. Merchants need to stay ahead of the curve and North Payments, together with Apple, can help spur on the digital payments revolution.

About North Payments: North Payments is a leading provider of payment services enabling businesses to transact online safely, fast and with ease. By allowing companies to process payments quickly and in multiple currencies with confidence and ease, North Payments increases revenues whilst reducing risk and costs of doing business. Supporting FTSE listed companies as well as small businesses, North Payments is transforming online business.

The Future is Bright…The Future is Alternative Payments

According to a new report by GP Bullhound on the future of technology payments, the use of the humble credit card is fading as virtual and physical payments are instead becoming one-click mobile checkouts.

It is something I believe everyone in the industry saw coming: this new report states that alternative payments as a group are forecast to account for close to 60% of the total online transaction value by 2017 – up from 43% in 2012. Alternative payment methods are the driving force behind big business now, which I have seen first-hand. I know one reason why my payment processing business, North Payments, is so successful is because we will offer any kind of alternative payment the merchant wants, be it China Union Pay, Google Wallet or PayPal, because these forms of payment are becoming more and more popular to the consumer, due to safety and security at checkout and ease of payment.

Mobile payments are becoming one of the biggest trends in alternative payments. Now companies like Apple (with their creation Apple Pay) have seen the huge money-making potential in alternative payment products so consumers can buy goods and services easier, faster and with more security than using a credit card online or at the checkout.

We saw an exciting gap in the market and North Payments has become one of the first payment processing companies in Europe to offer Apple Pay as an alternative payment, which is proving extremely popular method of payment for our merchants to offer.

Technology is built to fit around consumer’s lifestyles, which are faster and busier than ever before. If companies can offer services which speed up or simplify things, such as making a transaction, then consumers will latch on to these technologies quickly. If people can avoid carrying around credit cards but still make payments safely and easily then they will.

In many ways, the mobile is this bridge between the online and the offline world, providing the consumer with new ways to transact while broadening the scope of what is currently defined as an “online payment transaction”.

The future, I believe will continue towards developing payment methods that make it as easy as possible for the consumer to complete an online purchase, no matter from which type of device.