Posted by Mark Brousseau
Bank customers have started to demand that their banks’ online offerings keep up with the times, according to new research from Celent, LLC. And for good reason: the online banking space has stagnated for far too long, the research and advisory firm contends.
The evolution of the Internet has provided consumers with rich and interactive experiences online. Unfortunately, the banking industry has not kept pace with the evolution of the Internet, and customers have started to demand that their banks keep up with the times. For the most part, financial institutions recognize their online shortcomings.
Celent says the question is: Why haven’t they acted on them, what can they do about it, and how can they keep up with ever-increasing customer demands? These questions become even more difficult to answer because financial institutions have just started to emerge from the impact of the financial crisis and are under extreme pressure to run sustainable businesses in the wake of increased regulatory pressures.
The good news is that next-generation online banking is on its way, according to Celent research. Some of these are in full swing; others are just emerging or expected to impact the space within the next three to five years.
"Online banking isn’t an alternative channel any more. It’s a mainstream channel," says Jacob Jegher, senior analyst with Celent’s Banking group. "This channel, however, requires a lot of attention. If banks don’t act swiftly, they risk critical customer relationships and revenue. It’s important that banks harness technology but don’t use it as their best foot forward."
What do you think?
Showing posts with label e-commerce. Show all posts
Showing posts with label e-commerce. Show all posts
Thursday, June 9, 2011
Saturday, February 5, 2011
Are we approaching the "tipping point" for ebill usage?
Posted by Mark Brousseau
When will eBills be more widely used than traditional paper bills? A recent study suggests it might only be five years down the road.
The study conducted by NACHA’s Council for Electronic Billing and Payment (CEBP) and PayItGreen suggests that eBilling – or the electronic delivery of a bill to a customer – is gaining momentum across business industries with more billers expected to come online in 2011 and 2012. The NACHA CEBP and PayItGreen study, completed by Blueflame Consulting in January 2011, quantified the size of the eBill market, indicating that a total of 5.1 billion eBills were delivered in 2010 alone. However, some consumers are moving to adopt eBills more slowly than anticipated.
“After easily converting the ‘early adopters’ to eBills, billers are realizing that the second and third tiers of consumers will take more time to convince,” said Ed Bachelder, director of research for Blueflame Consulting. “However, billers across a broadening range of markets and sizes see eBill adoption as an important program for their companies, and have shown commitment to continuing to try to convert their customers.”
Nine of 10 of the companies surveyed rate eBill adoption to be a significant opportunity for their organizations. Cost-savings serves as a major driver for companies, with projected savings falling between 40 and 50 cents per bill. Another motivating factor, billers also said eBill customers are more satisfied customers and are easier to retain. Collectively, participants in the study distribute 735 million bills in a typical month, which is approximately 25 percent of all bills nationwide.
“eBills have not reached their full potential, but they’re gaining momentum,” said Janet O. Estep, president and CEO of NACHA — The Electronic Payments Association. “With companies’ long-term commitment to converting their customers to electronic bill presentment, we see adoption gaining momentum.”
Of those surveyed, universities had the most successful eBilling programs by far. Most universities can mandate eBilling for their students or use a customer opt-out approach rather than an opt-in approach.
“Most billers ask their customers to opt-in to the eBilling program,” said Bachelder. “Companies could increase their eBill participation dramatically by changing their new customer enrollment to an opt-out approach. Our study suggests that only 10 percent of customers who have Internet access would choose to opt-out once they experienced eBilling. Study participants identified one obstacle to eBilling is that the sign-up process is often too time-consuming for customers. An opt-out program would simplify that step.”
Participants in the study agree that more customer education is needed about how eBilling works, the security involved, and how significant paper reduction is to improving the environment.
“Once customers truly understand eBilling, they respond positively for a number of reasons,” said Estep. “Convenience is key, and environmental messaging continues to be a supporting motivator for eBill adoption.”
What do you think?
When will eBills be more widely used than traditional paper bills? A recent study suggests it might only be five years down the road.
The study conducted by NACHA’s Council for Electronic Billing and Payment (CEBP) and PayItGreen suggests that eBilling – or the electronic delivery of a bill to a customer – is gaining momentum across business industries with more billers expected to come online in 2011 and 2012. The NACHA CEBP and PayItGreen study, completed by Blueflame Consulting in January 2011, quantified the size of the eBill market, indicating that a total of 5.1 billion eBills were delivered in 2010 alone. However, some consumers are moving to adopt eBills more slowly than anticipated.
“After easily converting the ‘early adopters’ to eBills, billers are realizing that the second and third tiers of consumers will take more time to convince,” said Ed Bachelder, director of research for Blueflame Consulting. “However, billers across a broadening range of markets and sizes see eBill adoption as an important program for their companies, and have shown commitment to continuing to try to convert their customers.”
Nine of 10 of the companies surveyed rate eBill adoption to be a significant opportunity for their organizations. Cost-savings serves as a major driver for companies, with projected savings falling between 40 and 50 cents per bill. Another motivating factor, billers also said eBill customers are more satisfied customers and are easier to retain. Collectively, participants in the study distribute 735 million bills in a typical month, which is approximately 25 percent of all bills nationwide.
“eBills have not reached their full potential, but they’re gaining momentum,” said Janet O. Estep, president and CEO of NACHA — The Electronic Payments Association. “With companies’ long-term commitment to converting their customers to electronic bill presentment, we see adoption gaining momentum.”
Of those surveyed, universities had the most successful eBilling programs by far. Most universities can mandate eBilling for their students or use a customer opt-out approach rather than an opt-in approach.
“Most billers ask their customers to opt-in to the eBilling program,” said Bachelder. “Companies could increase their eBill participation dramatically by changing their new customer enrollment to an opt-out approach. Our study suggests that only 10 percent of customers who have Internet access would choose to opt-out once they experienced eBilling. Study participants identified one obstacle to eBilling is that the sign-up process is often too time-consuming for customers. An opt-out program would simplify that step.”
Participants in the study agree that more customer education is needed about how eBilling works, the security involved, and how significant paper reduction is to improving the environment.
“Once customers truly understand eBilling, they respond positively for a number of reasons,” said Estep. “Convenience is key, and environmental messaging continues to be a supporting motivator for eBill adoption.”
What do you think?
Thursday, September 23, 2010
Bookies Pick iPad Killer
With rumors swirling that BlackBerry maker Research in Motion (RIM) could unveil its forthcoming tablet -- a.k.a. “the BlackPad” -- as early as next week, consumers and analysts are guessing what company will be next to officially announce a tablet to compete with Apple’s iPad.
Mickey Richardson and his team at Bookmaker.com, one of the leading sportsbooks, have calculated the odds on who the next company to release a tablet to compete with Apple’s iPad in 2010 will be.
LG +300 25%
HTC +100 50%
SHARP +300 25%
MOTOROLA +300 25%
NOKIA +150 40%
SANYO +300 25%
For those of you unfamiliar with the joys of wagering, the +/- indicates the return on the wager. The percentage is the likelihood that response will occur. For example: Betting on the candidate least likely to win would earn the most amount of money, should that happen.
Where would you place your bet?
Mickey Richardson and his team at Bookmaker.com, one of the leading sportsbooks, have calculated the odds on who the next company to release a tablet to compete with Apple’s iPad in 2010 will be.
LG +300 25%
HTC +100 50%
SHARP +300 25%
MOTOROLA +300 25%
NOKIA +150 40%
SANYO +300 25%
For those of you unfamiliar with the joys of wagering, the +/- indicates the return on the wager. The percentage is the likelihood that response will occur. For example: Betting on the candidate least likely to win would earn the most amount of money, should that happen.
Where would you place your bet?
Online Storage and Privacy Laws
Posted by Mark Brousseau
If you store sensitive files on your personal computer which law enforcement authorities wish to examine, they generally cannot do so without first obtaining a search warrant based upon probable cause. But what if you store personal information online—say, in your Gmail account, or on Dropbox? What if you’re a business owner who uses Salesforce CRM or Windows Azure? How secure is your data from unwarranted governmental access?
Both the U.S. Senate and the House of Representatives are investigating these crucial questions in two separate hearings this week. Congress hasn’t overhauled the privacy laws governing law enforcement access to information stored with remote service providers since 1986. The Electronic Communications Privacy Act (ECPA), the key federal law governing electronic privacy, has grown increasingly out of touch with reality as technology has evolved and Americans have grown increasingly reliant on cloud services like webmail and social networking. As a result, government can currently compel service providers to disclose the contents of certain types of information stored in the cloud without first obtaining a search warrant or any other court order requiring the scrutiny of a judge.
Against this backdrop, the Competitive Enterprise Institute has joined with The Progress & Freedom Foundation, Americans for Tax Reform, Citizens Against Government Waste, and the Center for Financial Privacy and Human Rights in submitting a written statement to the U.S. Senate and House Judiciary Committees urging Congress to reform U.S. electronic privacy laws to better reflect users’ privacy expectations in the information age. The groups also belong to the Digital Due Process coalition, a broad array of public interest organizations, businesses, advocacy groups, and scholars who are working to strengthen U.S. privacy laws while also preserving the building blocks of law enforcement investigations.
“The success of cloud computing—and its benefits for the U.S. economy—depends largely on updating the outdated federal statutory regime that currently governs electronic communications privacy,” the statement argues. “If Congress wants to ensure Americans enjoy the full benefits of the cloud computing revolution, it should simply reform ECPA in accordance with the principles proposed by the Digital Due Process coalition.”
What do you think?
If you store sensitive files on your personal computer which law enforcement authorities wish to examine, they generally cannot do so without first obtaining a search warrant based upon probable cause. But what if you store personal information online—say, in your Gmail account, or on Dropbox? What if you’re a business owner who uses Salesforce CRM or Windows Azure? How secure is your data from unwarranted governmental access?
Both the U.S. Senate and the House of Representatives are investigating these crucial questions in two separate hearings this week. Congress hasn’t overhauled the privacy laws governing law enforcement access to information stored with remote service providers since 1986. The Electronic Communications Privacy Act (ECPA), the key federal law governing electronic privacy, has grown increasingly out of touch with reality as technology has evolved and Americans have grown increasingly reliant on cloud services like webmail and social networking. As a result, government can currently compel service providers to disclose the contents of certain types of information stored in the cloud without first obtaining a search warrant or any other court order requiring the scrutiny of a judge.
Against this backdrop, the Competitive Enterprise Institute has joined with The Progress & Freedom Foundation, Americans for Tax Reform, Citizens Against Government Waste, and the Center for Financial Privacy and Human Rights in submitting a written statement to the U.S. Senate and House Judiciary Committees urging Congress to reform U.S. electronic privacy laws to better reflect users’ privacy expectations in the information age. The groups also belong to the Digital Due Process coalition, a broad array of public interest organizations, businesses, advocacy groups, and scholars who are working to strengthen U.S. privacy laws while also preserving the building blocks of law enforcement investigations.
“The success of cloud computing—and its benefits for the U.S. economy—depends largely on updating the outdated federal statutory regime that currently governs electronic communications privacy,” the statement argues. “If Congress wants to ensure Americans enjoy the full benefits of the cloud computing revolution, it should simply reform ECPA in accordance with the principles proposed by the Digital Due Process coalition.”
What do you think?
Tuesday, May 4, 2010
Group says legislation threatens electronic commerce
Posted by Mark Brousseau
Reps. Rick Boucher (D-VA) and Cliff Stearns (R-Fla.) today unveiled draft legislation aimed at improving online privacy that would impose new rules on companies that collect individual data on the Internet. But technology analysts at the Competitive Enterprise Institute warned that the proposed bill would actually harm consumers and hinder the evolution of online commerce.
“Substituting federal regulations for competitive outcomes in the online privacy arena interferes with evolution of the very kind of authentication and anonymity technologies we urgently need as the digital era evolves,” argues Wayne Crews, vice president for Policy.
“Today, businesses increasingly compete in the development of technologies that enhance our privacy and security, even as we share information that helps them sell us the things we want. This seeming tension between the goals of sharing information and keeping it private is not a contradiction -- it’s the natural outgrowth of the fact that privacy is a complex relationship, not a ‘thing’ for governments to specify for anyone beforehand,” Crews states.
“This legislation flips the proper definition of privacy on its head, wrongly presuming that individuals deserve a fundamental right to control information they’ve voluntarily disclosed to others online. But in the digital world, information collection and retention is the norm, not the exception. Privacy rights, where they exist, arise from voluntary privacy policies. The proper role of government is to enforce these policies, not dictate them in advance,” argues Ryan Radia, associate director of Technology Studies.
“If Rep. Boucher wants to strengthen consumer privacy online, he should turn his focus to constraining government data collection, which poses a far greater privacy threat than private sector data collection. A good starting point would be reexamining the Electronic Communications Privacy Act, the outdated 1986 law that governs governmental access to private communications stored online. Strengthening these privacy safeguards, as a broad coalition of companies and activist groups are now urging, will empower firms to offer stronger privacy assurances to concerned users,” Radia states.
What do you think?
Reps. Rick Boucher (D-VA) and Cliff Stearns (R-Fla.) today unveiled draft legislation aimed at improving online privacy that would impose new rules on companies that collect individual data on the Internet. But technology analysts at the Competitive Enterprise Institute warned that the proposed bill would actually harm consumers and hinder the evolution of online commerce.
“Substituting federal regulations for competitive outcomes in the online privacy arena interferes with evolution of the very kind of authentication and anonymity technologies we urgently need as the digital era evolves,” argues Wayne Crews, vice president for Policy.
“Today, businesses increasingly compete in the development of technologies that enhance our privacy and security, even as we share information that helps them sell us the things we want. This seeming tension between the goals of sharing information and keeping it private is not a contradiction -- it’s the natural outgrowth of the fact that privacy is a complex relationship, not a ‘thing’ for governments to specify for anyone beforehand,” Crews states.
“This legislation flips the proper definition of privacy on its head, wrongly presuming that individuals deserve a fundamental right to control information they’ve voluntarily disclosed to others online. But in the digital world, information collection and retention is the norm, not the exception. Privacy rights, where they exist, arise from voluntary privacy policies. The proper role of government is to enforce these policies, not dictate them in advance,” argues Ryan Radia, associate director of Technology Studies.
“If Rep. Boucher wants to strengthen consumer privacy online, he should turn his focus to constraining government data collection, which poses a far greater privacy threat than private sector data collection. A good starting point would be reexamining the Electronic Communications Privacy Act, the outdated 1986 law that governs governmental access to private communications stored online. Strengthening these privacy safeguards, as a broad coalition of companies and activist groups are now urging, will empower firms to offer stronger privacy assurances to concerned users,” Radia states.
What do you think?
Monday, April 26, 2010
TAWPI @ NACHA Payments
eGistics Chairman and CEO Bob Lund, also chairman of the TAWPI board of directors, greets Tonya Gregoire of IAPP and Billy Terrell of eGistics this evening at the NACHA Payments conference in Seattle.
Friday, May 29, 2009
Impact of the Economy on Online Banking Systems Purchasing Decisions
By Mark Brousseau
Today’s economy has presented challenges for banks to invest in new technologies, such as online banking solutions. However, for those banks that can, now is the time to do so, says Joe Spatarella, vice president, sales & marketing, Online Banking Solutions (OBS).
"With minimal activity and deal flow, this is an opportune time to move forward and negotiate an ideal vendor partnership to take you well into the future," Spatarella says.
Below are best practices that Spatarella offers for acquiring and deploying online banking solutions in a challenging and transforming economic climate. "With little or no margin for error, the following could help you win a greater share of customer revenue with a contemporary solution when others are afraid to move," he says.
1. Set your goals: Identify a solution that can differentiate the financial institution in a crowded market. Focus on improved user experience: semantics, navigation and ability to customize at the user level without expensive vendor modifications.
2. Walk a different path to success: Find a vendor that is truly willing to partner and share project risks rather than the 800 pound gorilla who is less likely to negotiate favorable terms or who makes promises that cannot be met.
3. Go with a fixed cost model: Annual license fees and fixed per user pricing is much easier to manage than variable transaction pricing.
4. Purchase in the present, not the future: While product roadmaps are important, be sure the vendor can deliver the product version you purchased at the time you need to deploy it
5. Share in project success: A vendor will be more likely to share the risk and contribute specialized resources if there is also an opportunity to benefit from project success.
6. Watch the clock: Give yourself enough time to make a decision and give the vendor a reasonable timeframe to deliver. Don’t use so much of the project timeline on evaluation that the vendor is left with a highly compressed window for implementation.
7. Minimize the frequency: The solution must be sustainable and scalable so that in 3 to 5 years, you are not looking for another vendor and having to repeat the process with valuable time and resources. Plan for continued success, not failure.
What do you think? Post your comments below.
Today’s economy has presented challenges for banks to invest in new technologies, such as online banking solutions. However, for those banks that can, now is the time to do so, says Joe Spatarella, vice president, sales & marketing, Online Banking Solutions (OBS).
"With minimal activity and deal flow, this is an opportune time to move forward and negotiate an ideal vendor partnership to take you well into the future," Spatarella says.
Below are best practices that Spatarella offers for acquiring and deploying online banking solutions in a challenging and transforming economic climate. "With little or no margin for error, the following could help you win a greater share of customer revenue with a contemporary solution when others are afraid to move," he says.
1. Set your goals: Identify a solution that can differentiate the financial institution in a crowded market. Focus on improved user experience: semantics, navigation and ability to customize at the user level without expensive vendor modifications.
2. Walk a different path to success: Find a vendor that is truly willing to partner and share project risks rather than the 800 pound gorilla who is less likely to negotiate favorable terms or who makes promises that cannot be met.
3. Go with a fixed cost model: Annual license fees and fixed per user pricing is much easier to manage than variable transaction pricing.
4. Purchase in the present, not the future: While product roadmaps are important, be sure the vendor can deliver the product version you purchased at the time you need to deploy it
5. Share in project success: A vendor will be more likely to share the risk and contribute specialized resources if there is also an opportunity to benefit from project success.
6. Watch the clock: Give yourself enough time to make a decision and give the vendor a reasonable timeframe to deliver. Don’t use so much of the project timeline on evaluation that the vendor is left with a highly compressed window for implementation.
7. Minimize the frequency: The solution must be sustainable and scalable so that in 3 to 5 years, you are not looking for another vendor and having to repeat the process with valuable time and resources. Plan for continued success, not failure.
What do you think? Post your comments below.
Thursday, January 1, 2009
Recession Impacts Gift Card Sales
By Mark Brousseau
Gift card sales haven't been spared from the global recession.
Store gift cards are expected to generate $61 billion in sales in the fourth quarter of 2008, down from $70 billion in 2007, according to Brian Riley, senior analyst at research firm TowerGroup.
The silver lining: those from financial institutions, like Visa gift cards, are expected to edge up to $28 billion in sales from $27 billion in last year's fourth quarter.
Consumers snapped up gift cards in prior years, USA Today reports. Last December, market research firm NPD Group said about 61 percent of Americans bought at least one holiday gift card in 2007, up from 31 percent the year before and just 16 percent in 2005.
What do you think? Post your comment below.
Gift card sales haven't been spared from the global recession.
Store gift cards are expected to generate $61 billion in sales in the fourth quarter of 2008, down from $70 billion in 2007, according to Brian Riley, senior analyst at research firm TowerGroup.
The silver lining: those from financial institutions, like Visa gift cards, are expected to edge up to $28 billion in sales from $27 billion in last year's fourth quarter.
Consumers snapped up gift cards in prior years, USA Today reports. Last December, market research firm NPD Group said about 61 percent of Americans bought at least one holiday gift card in 2007, up from 31 percent the year before and just 16 percent in 2005.
What do you think? Post your comment below.
Saturday, December 27, 2008
What's Hot in e-Commerce
By Mark Brousseau
Will mobile commerce take over in 2009? Will consumers continue to browse online and shop offline … or will it be the other way around? What new uses for social networking sites will retailers find in the New Year? Guidance offers its thoughts on the hottest new trends for online retail and technology.
... Mobile will NOT be the killer app for eCommerce -- at least not as a shopping channel in and of itself. But it will become hugely useful as a companion to both online and offline shopping.
... Commerce will become even more collaborative. Social commerce enables interaction among shoppers in a variety of forms, while collaborative commerce takes it to the next level by enabling “the group” to purchase together, or have a say in product development.
... Corporations will “become” social. Larger companies will bring social networking in-house.
What do you think? Post your comment below.
Will mobile commerce take over in 2009? Will consumers continue to browse online and shop offline … or will it be the other way around? What new uses for social networking sites will retailers find in the New Year? Guidance offers its thoughts on the hottest new trends for online retail and technology.
... Mobile will NOT be the killer app for eCommerce -- at least not as a shopping channel in and of itself. But it will become hugely useful as a companion to both online and offline shopping.
... Commerce will become even more collaborative. Social commerce enables interaction among shoppers in a variety of forms, while collaborative commerce takes it to the next level by enabling “the group” to purchase together, or have a say in product development.
... Corporations will “become” social. Larger companies will bring social networking in-house.
What do you think? Post your comment below.
Wednesday, October 29, 2008
The Bedrock of Alternative Payments
By Mark Brousseau
The ACH Network began as a low-volume network transmitting large recurring transactions between well-established entities. However, changes in rules and business models have brought about significant changes in the nature and volume of ACH activity.
More than 18 billion ACH payments were made in 2007, representing a 12.6 percent increase from the total number of transactions generated in 2006, according to Mercator Advisory Group. Much of the growth in ACH volume can be attributed to fundamental changes in payment methods consumers and businesses use, with the network transforming into a high-volume platform of relatively low-value, non-recurring transactions. These transactions are originated from a rapidly expanding number of merchants, aggregators, corporations, and financial institutions, Mercator Advisory Group says.
Alternative payment providers such as Google Checkout, Bill Me Later and, of course, PayPal leverage the ACH to provide consumers and merchants with a secure and efficient means of payment and in doing so are experiencing phenomenal growth.
Non-financial institutions have been beating the banking industry to the punch of developing unique and cost efficient payment solutions, especially in the e-commerce space. Ironically, alternative payment providers have succeeded using the banking industry's own infrastructure to capture interchange-like revenues.
However, a new solution has emerged from NACHA that could level the playing field for banks to compete against alternative payment providers and push the ACH network in a new direction, Mercator Advisory Group says. NACHA's recently released Secure Vault Payments (SVP), an e-commerce payment solution not only enables customers to move payments from their direct deposit accounts to merchants and service providers, but transactions occur with real-time authentication and authorization from the consumer's bank Web site. The push method ensures merchants and service providers that payments are being made with “good funds,” thus reducing concerns about fraud, charge-backs, and non-sufficient funds.
Although signature debit and credit card usage online has yet to be hugely impacted by alternative payment solutions, in many cases, non-traditional payment providers offer significantly enhanced value propositions including discounts, sales and loyalty tools, and the ability for merchants to cross sell on non-competitive merchant Web sites. These value added services create significant competitive pressures for traditional payment types and are giving alternative payment methods solid traction, Mercator Advisor Group believes.
“As alternative payment methods continue to evolve and more players step into the space, the use of traditional payment cards for online transactions will continue to decrease. It is foreseeable that merchants will increasingly promote alternative payments and consumers will become more accepting of new payment types,” said Brent Watters, senior analyst of Mercator Advisory Group’s Prepaid Advisory Service. “Mercator believes that in the next five years, 35 percent of payments made online will be in the form of alternative payments, including prepaid cards, new forms of credit and programs leveraging the ACH.”
Other findings from Mercator Advisory Group include:
… The ACH continues to show solid growth and transaction volume will continue to escalate as more alternative payment schemes leverage the network.
… The ACH is moving to push versus pull method of payment thus creating direct competition for EFT networks that have been eager to develop a PIN-less debit solution for online transactions.
… The ACH's eCheck services continue to fuel the networks' transaction volume and penetrate markets currently targeted by debit and credit cards.
… NACHA's Secure Vault Payment (SVP) creates an opportunity for banks to compete in online alternative payments.
The ACH Network began as a low-volume network transmitting large recurring transactions between well-established entities. However, changes in rules and business models have brought about significant changes in the nature and volume of ACH activity.
More than 18 billion ACH payments were made in 2007, representing a 12.6 percent increase from the total number of transactions generated in 2006, according to Mercator Advisory Group. Much of the growth in ACH volume can be attributed to fundamental changes in payment methods consumers and businesses use, with the network transforming into a high-volume platform of relatively low-value, non-recurring transactions. These transactions are originated from a rapidly expanding number of merchants, aggregators, corporations, and financial institutions, Mercator Advisory Group says.
Alternative payment providers such as Google Checkout, Bill Me Later and, of course, PayPal leverage the ACH to provide consumers and merchants with a secure and efficient means of payment and in doing so are experiencing phenomenal growth.
Non-financial institutions have been beating the banking industry to the punch of developing unique and cost efficient payment solutions, especially in the e-commerce space. Ironically, alternative payment providers have succeeded using the banking industry's own infrastructure to capture interchange-like revenues.
However, a new solution has emerged from NACHA that could level the playing field for banks to compete against alternative payment providers and push the ACH network in a new direction, Mercator Advisory Group says. NACHA's recently released Secure Vault Payments (SVP), an e-commerce payment solution not only enables customers to move payments from their direct deposit accounts to merchants and service providers, but transactions occur with real-time authentication and authorization from the consumer's bank Web site. The push method ensures merchants and service providers that payments are being made with “good funds,” thus reducing concerns about fraud, charge-backs, and non-sufficient funds.
Although signature debit and credit card usage online has yet to be hugely impacted by alternative payment solutions, in many cases, non-traditional payment providers offer significantly enhanced value propositions including discounts, sales and loyalty tools, and the ability for merchants to cross sell on non-competitive merchant Web sites. These value added services create significant competitive pressures for traditional payment types and are giving alternative payment methods solid traction, Mercator Advisor Group believes.
“As alternative payment methods continue to evolve and more players step into the space, the use of traditional payment cards for online transactions will continue to decrease. It is foreseeable that merchants will increasingly promote alternative payments and consumers will become more accepting of new payment types,” said Brent Watters, senior analyst of Mercator Advisory Group’s Prepaid Advisory Service. “Mercator believes that in the next five years, 35 percent of payments made online will be in the form of alternative payments, including prepaid cards, new forms of credit and programs leveraging the ACH.”
Other findings from Mercator Advisory Group include:
… The ACH continues to show solid growth and transaction volume will continue to escalate as more alternative payment schemes leverage the network.
… The ACH is moving to push versus pull method of payment thus creating direct competition for EFT networks that have been eager to develop a PIN-less debit solution for online transactions.
… The ACH's eCheck services continue to fuel the networks' transaction volume and penetrate markets currently targeted by debit and credit cards.
… NACHA's Secure Vault Payment (SVP) creates an opportunity for banks to compete in online alternative payments.
Thursday, August 28, 2008
How Telcos Can Replace Banks
Posted by Mark Brousseau
Extremely interesting 5-minute video on how telcos can replace banks.
http://www.youtube.com/watch?v=JRa86nqUCgM&feature=related
Hat tip to Les Lorenzo at Metavante for passing this along.
Extremely interesting 5-minute video on how telcos can replace banks.
http://www.youtube.com/watch?v=JRa86nqUCgM&feature=related
Hat tip to Les Lorenzo at Metavante for passing this along.
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