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highlights

 

A Look Ahead to U.S. Retail Banking in 2014

Moderate optimism is the theme of this BAI Banking Strategies Executive Report in which we interviewed bankers of institutions large and small as well as a number of major solutions providers.



Retail Delivery: Reinventing the Customer Experience

As the retail banking industry emerges from the recent financial crisis, it faces the twin challenges of reinventing the customer experience while reining in costs.



Barclays Pingit Galvanizes P2P
The Barclays Pingit P2P app works well for both consumers and corporate customers, suggesting that a new stage in mobile payments has arrived. by CHRIS SKINNER
Jun 8, 2012  |  0 Comments

There’s a strong debate about why new services such as PayPal and Square take off so fast and the answer is a combination of usability and accessibility. If something is easy and it works, then it can gain critical mass fast. That’s true of Facebook, Twitter and other social media.

The more intuitive, accessible, easy and social it is, the more viral it becomes and hence gains mass market fast. That’s true of Zynga’s games and YouTube’s videos.

And it’s true of mobile payments. Usability and accessibility is the secret sauce that Barclays Bank believes it has discovered with Pingit, Europe’s first person-to-person (P2P) app, which has really taken off.

First, for those who aren’t familiar with Pingit, it’s like a PayPal for mobile and offers simple P2P mobile payments whether you are a Barclays customer or not. Developed internally by Barclays through a private cloud service, it was launched in February and the ad campaign started in April. What proved interesting in the launch is the speed of use of Pingit. From day one in February, folks were downloading the app fast – 120,000 in the first five days, over 400,000 by mid-April and 500,000 by May 9. Barclays claimed the number had reached over 700,000 as of May 16, 80% of which is on iPhones apparently, even though it’s also available on Android.

I’m sure the ads help. And Barclays claims that their social media campaign is helping too, as can be seen on their Facebook page. But what really helped is that Apple highlighted Pingit as a showcase app, due to its fast download numbers rising, and that #Pingit was the second highest trending topic on Twitter the day after launch. Barclays then said that they were surprised at the uptick in usage volumes and how the average transaction had been anticipated around the £25 mark but was so far averaging around £75 per transaction. That surprised me too.

Take a look at the demographics:

  • 29% of users are 18 to 25 years old;
  • 37% are 26 to 35;
  • 26% are 35 to 50; and
  • 7% are over 50.

Now Barclays is pushing for merchants to offer Pingit via simple QR codes and Corporate Identifiers. The idea of the Corporate ID is that firms can buy Pingit accounts such that customers just type in “Tesco” or “Waterstones” and the payment is made without needing to know the company’s account numbers or other details. That’s pretty cool.

Even better is that you can embed all the data you need in a QR code. So, as you walk past an ad for a charity campaign, hold your phone over the QR code and make an immediate donation.

Or, even better for the utility firms, send out a bill to a customer with a QR code embedded that includes all the payment details and the payment amount. All the customer needs to do then is hold their phone over the code, check that the payment amount is correct and Pingit (note how the word works wells as a verb).

For the corporate customer, not only do they get all the customer data that they need – account number, payment details, etc. – but it’s now enriched with the customer’s mobile telephone number for further verification and potential marketing. Fast, simple and easy … and innovative. I hadn’t seen such stuff before and certainly not from a UK bank.

The final points really rammed home why this is important. For a corporate, the idea of a real-time refund is phenomenal. Imagine an angry customer calls: “You’ve just taken a direct debit from my account for £175 when it should have been £100; what are you going to do about it you &$%@!” And the call centre representative replies: “Well sir, here’s your £75 back with an extra £25 to say ‘sorry.’” Ping!

And there it is, on your phone, there and then. A real-tme faster payment refund via mobile. Lovely-jubbly. If you need any more convincing, the Barclays teams threw out a couple of research numbers which show that, by 2015:

  • One in three people on Planet Earth will own a smartphone (Parks Associates); and
  • Mobile payments will be worth $670 billion (Juniper).

So what? There are lies, darned lies and statistics. All I know is that when you have a simple P2P mechanism for mobile payments fit for smartphones that corporates can leverage, then something’s changed. And it has.

However, this being a world where version 1.0 never gets it right, we have to acknowledge that Barclays still has a few bugs to work out:

  • As a non-Barclays customer you have to go through a very complex account verification process that involves a PayPal-like penny drop into your current account with a reference number that you need to enter. This is followed by a letter to your house via snail mail with another verification number. OK, OK, I know it’s all secure Know Your Customer stuff, but it’s a pain in the arse and will put a lot of people off.
  • The app is not robust yet, and the latest update froze a lot of people’s phones which is getting negative vibes on the app store.

Mr. Skinner is chairman of the Financial Services Club, CEO of Balatro Ltd. and comments on the financial markets through his blog the Finanser. He can be reached at cskinner@balatroltd.com.

 

 

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