ApplePay, Challenger Banks, e-commerce, eWallets, mobile banking, SamsungPay

Why are there so many Financial Health apps now?

The trend of mobile banking apps is rapidly growing around the world.  I’ve counted more the ten in UK and hand-full in Europe and the United States.  They are typically built in partnership with either MasterCard or Visa and often have a sponsor bank or are in the process of getting their own banking license (which is harder in the United States) to support and maintain their activities.

If you’re between 20 and 35 years old you’ve probably heard of one of them and if you like technology and money management app, you’ve probably downloaded one (or more) and used the service.  But, is this better than the traditional banking experience? Throughout this piece I’ll try to detail why the market is heading in the mobile only direction and what it may look like in 4-6 years for the incumbents and what impact will it have customers.

Who are the major players?  The mobile banks in the UK are the most advanced, so let’s focus here. 

Monzo Bank have probably been the most visible in the market, with the unique ability to create a tribe within a short period of time.  The have used a combination of VC money and customer adoption through crowd funding – which I think they broke a record and a user experience that was one of the first to provide a different flow to the banking experience.

Starling Bank and N26 are not far behind with a great user experience and a more European approach, rather than just the UK.  N26 have also announced they’re opening their services in the US in early 2018.

BBVA are one of the worlds largest banks and have been strategic about how they are approach the new generation of banking.  They have made some acquisitions on the mobile banking space in the United States through Simple and Holvi in Estonia. They are also creating a culture and marketplace to enable entrepreneurs to use data to build the next version or feature of the banking experience.

 Customers – Do customer need a better mobile banking experience?  Yes, apparently, we do.  The customer need is there.  The market indicates that customers want more from their bank and want it on mobile.  The majority banks are still transitioning to a successful mobile banking experiences and this is where the new start-ups have found an opening and customers are agreeing.

What are they looking for?

Flexible Spending and Transnational Overviews – good engineers and designers can create awesome visual concepts when it come to data.  And especially on mobile, where our focus is only for seconds before we switch to the next app.  Banks like Monzo and Starling have nailed this and make the user experience the core feature of the bank and got users saying longer in their app.

Payments – Mobile Payments have also increased the visibility of banks on mobile devices and decreased the friction to enter the banking app.  Mobile Payments like Apple Pay and Samsung Pay are new and not widely used (but are widely available) also focus on the user experience and convenience and most mobile banks are support the most common forms of mobile payments.

Financial Goals – Gone are the days where we keep cash under our mattress of a rainy-day fund. Now we can use mobile banking apps to help us refine our spending habits and guide us to save more for specific goals, like holidays – which is actually a good idea – but I’d prefer to save for a bigger purchase, like a house.

Fundamentally, the product that is being built is a bank account, a current or saving account primarily. Probably a credit facility in the future, like credit cards or mortgages.   But they are also doing something different;

Cloud Based – One hundred percent in the cloud.  Provides them flexibility to grow fast and add new features easily.  This is a given in 2017, but some traditional banks are still assessing the future.  This doesn’t provide a competitive advantage for customer acquisition, but hopefully reduces cost for these mobile banks.

Business to Business Transfers (faster payments) – the UK market is miles ahead in payments and clearing functionality and many start-up banks have already plugged into the network and are processing payments for big business payrolls and Governmental activities already.

Card Acquiring Services – Like many incumbent banks who are acquiring platforms and process billions of dollars of transactions, Start-up Banks want to join the club.  The major benefit is that merchants directly or via payment processor can integrate directly into the acquiring platform, like a Stripe API connection.

Third Party Partnerships and Open API (marketplaces app store) – This is a concept that we’ve heard a lot of recently, but its put into place here. For example, YoYo is an email receipt service for mid-tier merchants in the UK and customer can use this service with several start-up banks for their purchase reconciliation activities.

So, what’s next?  Many of the challenger banks have raised large rounds to build a bank from the bottom up, which includes the infrastructure and security, which is primarily cloud based.  They also focus on the customer, the user experience from becoming a new user to the day-to-day activities that users want to focus on.  This allows them to be flexible and enable new features faster and get customer feedback in a more structured way.

In general, the numbers are good for the larger banks, they have seen the trend in mobile first banking and are constantly improving and updating their apps to make them more user friendly.  Obviously, there is still a gap between them and a Facebook or Uber app, but closing fast.

Because there is feeling in the market that traditional banks are bad and don’t understand technology and want the new generation of bank account holders really want.  Which is, a Facebook like banking experience

 However, how are they going to make money when the VC capital is gone?  My guess is that their trying to get customer growth and eventually looking for an exit via a large bank that is looking to appeal to the younger generation and mobile first generation.  The most obvious outcome is that these start-ups get acquired by a larger Financial Institution or tech companies that are looking to expand their financial offering to a non-traditional segment of the market.

 The next five years in the financial app space will be exciting.  Already we see Financial Institutions like, JP Morgan Chase acquire mobile only bank, Finn.  It has also been reported that Monzo has had offers from several larger Financial Institutions but have not accepted at this point and have indicated they want to go it alone and truly build a bank of the next generation.  I think this is important for the future of banking because they’re independent and can test and try new ways of meeting customers banking requirements in different markets.  The constraint they’ll have is how to grow the customer base big enough were they become profitable without forgetting about the customers they started with.

I think the future is bright for the next generation of banking customers.  Technology can help us have disciple when it come to saving and planning.  But of-course we still have to follow-it.



The Future Store

The principles of our current retail structure to design a layout to get as much stock on the floor as possible and the customer needs to pay at the designated location, which is often at the front of the store that often brings long lines and delays.

In the early days, we had Shopkeepers greeting customers at the door, which allowed a much more personal perspective, and they could direct the customer to the right product or help with any queries.  During the 1990s, it was more about packing the stores with products with pure disregard for the shopper experience and more about the movement of products out the door.

Now, the trend is towards simplicity and creating a store layout that is more user friendly and allows consumers to touch and feel products without feeling overwhelmed about the amount of stock.   Which in theory allows the shop assistant to give better assistance within the store.

Some retailers are indeed embracing the layout of their retail stores.  The Apple Retail Store is the perfect example, products rule the space.  The checkout process is secondary but is done on the spot, via a cashier.

Retailers are figuring this out, its all about customer service, which is something that you can’t find buying online and are now taking advantage of.  Warby Parker are doing a similar thing to Apple.  Products are displayed around the store, with lots of space for customer and shop assistants to mingle and discuss the product.

However, The Gap Retail store, is slowly moving, it often takes up valuable space with guard  barriers for customers to line up and wait to be served at the check-out.   This results in a bottle neck and a disappointed customer experiences.   There are retailers that have trying something different, like the line busters’ functionality – which enables the sales assistants to walk around with tablets or iPads and assist customers in checking out.  But that is really a Band-Aid solution and it doesn’t solve the problem of long lines.

Amazon overnight have changed this and completely ignited the retail industry again.

A Bit of Context

AmazonGO is an electronic retail store that allows the customer to scan the app to enter the store and then shop and simply leave.  No lines and no checkout.

The key elements of the Amazon GO platform is customer identification.  They use technology, like sensor fusion and computer vision that scans and identifies the user entering the store.   As Amazon has the customers card details, its simply a matter of matching the product to the customer.

How can they assign the right product to the right customer?  Using buying behavior and machine learning, Amazon can predict what type of product the customer will choose.  There is a certain level of risk in there, that the wrong product is selected, and Amazon undercharge the customer, but I can imagine the price point for the products within the store are very similar.

Edge Case – is probably how the customer is identified in all situation, like wearing a baseball cap?  How does Amazon know who they are?  What about the identification of the product the user is selected.  Can the customer pick up a product, put it down – then someone next to you pick it up.  Is the system smart enough to know?  I spoke to someone the other day, that said – the store has a lot of camera’s in it.  Will this become an issue?  Customer privacy.

Other Retailers

This has really made other large retailers open their eyes and embrace technology to compete with the ever conquering  There are many headlines and focus on the personalization of the customer journey.  This is the right focus, Amazon have done it for the last 20 years, building the process not only to ensure the payment aspect of the check-out is friction less, but also what the customers want to buy.  They’ve done this by AI – which is in the form of products recommendations.

The space is really open for tech companies to build a platform that can plug into any retailers platform to help them grow and compete.  The biggest challenge for tech firms is that they need to strike a balance between product features and retailer control.  Most retailers want control of their data but often don’t have the resources or ambition to build in house.  So tech firms need to be able to find that sweet spot where they can offer the right product mix but allow retailers to control and dictate on how it works.

Many large retailers are investing in In-store beacons that allow retails ton initial capture additional information about what the customers are doing within the store, but also push information to them by offering coupons and discounts.

The UK retailer House of Frazier have recently announced they are investing in a challenger bank in the UK, Tandem bank.  This is a bold move for an old traditional retailer, who are commonly known for instore activities rather than a cutting-edge mobile only banking system.  These signals a few changes in two industries.  Banking – which has already seen several mobile only banks rise (well, start – growth may come) and Retail – which overall is declining.  This is evident in the US with Macy’s and Australia with Coles and others taking out several other smaller players in the market.  This highlights the convergence of mobile activities and great user friendly designs with a physical presence and the brand equity in a large retailer that has the trust of the customer, and they’re ambition to explore other opportunities, like small business loans or insurances during the shopping experience.

Square can really take a great step here in the future store – they have the technology, hardware and capital to explore and expand functionality to enable the SMB around to US to enable customers to gain the payment journey that the Amazon Go store have opened the door to and all can expand on.

The functionality can be quite easy if Square were to configure their NFC device to accept a non-payment transaction, like a $0 AUTH transaction and also enable the customer to pass non-payment information to the merchants to determine a customer specific price.

I hope to see this soon






AndroidPay, ApplePay, Challenger Banks, ChasePay, e-commerce, eWallets, Loyalty, Loyalty Programs, mobile payments, Payments Ecosystem, SamsungPay, Sharing Shopping Data, TechVBanks, Tokenization, Uncategorized

Will the Mobile Payment landscape mirror of the American political scene?

dolandMobile Payment are in a bubble in the US.  Geographically, that is. Blue states are typically the most common mobile payment (and technology) consumer friendly locations.  Red states are typically reliant on plastic and more importantly cash (less technology) to make a payment.  This technology adoption follows the 2016 US Presidential election voting trends.

With the result of the Election and the Republican party winning an election fought on miss-information and half-truths, its interesting to reflect on how the next four years will impact technology innovations and Mobile Payments.

The campaign was won partially on the promise of bringing back jobs in the industrial sector and others that are being taken over by technology.  A comparison in the mobile payments industry, is like promising new building for banks branches in the US because it will provide more jobs, even though most Americans are performing their banking activities online.

Can this rebuff of technology and progress in the real world also happen in the mobile payments ecosystem?

The growth of mobile payments can only be successful if it covers the nation and we get more and more customers to change their consumer behavior to scan their phone at the terminal, rather than swiping a card (or even carrying cash).

The result of the election has clearly shown that technology advancement and innovation doesn’t always move as fast we think and many members of the community often perceive technology advancements threats.

So, how does the Mobile Payments Industry prevent technology moving too fast and leaving 51% of America behind, while maintaining a steady growth pattern of consumer adoption and technology improvement in the near and short term.

Is there already an inbuilt emergency brake?  In the shape of the Chip & Signature process?  I heard a statistic the other day, that it takes 38 seconds to complete a EMV transaction request on a terminal.  That is indeed not a technology improvement.  In Europe, it a sub 10 second process to complete the cycle.  Its interesting to look at other markets around the world.  In Europe, The Netherlands and Sweden are much smaller countries but have diverse demographics in cities’ and in rural areas but are moving faster towards a cashless environment than anyone else and have done it within a very short time.

Mobile Payments is totally the future of payments for many Americans living in progressive cities but its going to take much longer to cover the entire United States.  The US smart phone coverage is a pretty good indicator of this, we saw over the last 10 years’ smart phone coverage has expanded to all corners of the US, even if the model of the phone are several years behind.

It’s a pretty good bet the mobile payments will be the most popular way of paying in the future, but for now there is still a part of American society that want to walk slowly into the future and use the traditional cash or credit card payment option, which are perfectly fine.  However, unfortunately they’ll have to figure out mobile payments, because it maybe the only way to pay in 5 to 10 years’ time and banks and technology merge closer together.


AndroidPay, ApplePay, Challenger Banks, ChasePay, e-commerce, eWallets, Loyalty, mobile payments, SamsungPay, TechVBanks, Tokenization

Mobile Wallets & New Banking


There is a small battle going on in the payments world that may soon come to the surface.  The world is now seeing the era of mobile payments and the focus is on the consumer adoption and growth of the industry. The underlying questions is, which wallet, from either your phone maker or your bank will you use?  As the mobile wallet market matures, consumers will demand more from their banks and phone makers need to do more than just payments.  Consumers want one place where we can do everything, like point of sale payments, banking activities, loyalty activities and online and in-app purchases.  

The struggle will be between phone makers, like Google, Samsung and Apple and Financial Institutions, such as Chase, Citi Bank and Bank of America and new challenger Banks, like Mondo and Curve. The new banks are positioning themselves as different to traditional banks by focusing on the added value to the customer, for examples; creating an easy way to view my monthly purchases categorized in an easy way on their phone. This is not a massive banking disruption, but the openness and future possibilities make this an exciting time to watch the banking industry.  The future possibilities are very interesting, as no traditional bank has really opened their API’s to outside parties. Companies such as are creating a platform that will be driven by a single savings account, which will be the trigger for all other banking activities. It will allow you to eventually link the app or API to your device so users can make payments at the point of sale, split bills with friends and maybe also build a better relationship with merchants to leverage a loyalty platform.

The banking industry is moving towards the mobile platform in a fast way and the mobile device will be the enabling force for banking change. Google, Apple and Samsung have platforms that allow interaction between the software and hardware, which is a critical component to ensure the security and integrity of the banking data. The provisioning of a credit card to the wallet and the security mechanism is a service that both Visa and MasterCard have generated to ensure a generic solution is available across the board. It also allows both to keep control of the process.

Using the Secure Token or the TPM to authenticate the phone and the user is a unique hardware security measure that will reduce the risk of device cloning. The IDMV data elements and passing of data to the issuing bank will inevitably be the decision maker on the customer and the transactions from the device. It’s the banks decision to allow a user to provision their credit card to the specific device and also perform any banking activity within the wallet. If the bank receives more data on that customer, like their historical transactions for all merchants (which is user generated), will provide a greater amount of data to the bank to make decision about what the customer can do.


Mobile Device Generated Wallets

  1. Apple Pay – The pioneer in the mobile payment space.  Apple wrote the specs for the Tokenization service with the credit card networks and have allowed banks to leverage this functionality with other wallet providers.  Apple products enhancements are typically customer focused and often industry changing and will surely make the next iteration of the wallet a game changer.

  1. Android Pay – The true designer of the HCE functionality for wallets linked to phone for security measurements us the TPM.  Out of all the wallets, Android pay is making strives with the loyalty component.  Allowing user to use loyalty points (i.e. the Coke-a-Cola example) to pay partially for a product, within the checkout process. However, Google released a Wallet many years back and haven’t completely dominated the market.

  1. Samsung Pay – Samsung pay is getting a lot of visibility in the market and is moving faster to get global roll out.  With their acquisition of LoopPay, they can leverage the benefits of Magnetic Secure Transition, which is a way of differentiating themselves from Apple Pay.

Banking Generated Wallets

  1. Chase Pay – Multiple banks have launched their own wallets to allow customers to leverage their online banking activities and mobile payments via MCX platform.  Chase has 50 million cards on file, so it’s easy for them to leverages those into a Chase Wallet.

  1. Citi Wallet – CitiBank leverages the functionality of MasterCard’s MasterPass to enable customers to use the wallet.

There are several other alternate NFC payment solutions on the market that enable users to use their payment instrument within a device, like a watch or band. The major problem is that these devices doesn’t really allow you to do anything else. It’s really restricted to the transaction activity of tapping on device.

The battle is defiantly between the banks and phones providers to capture the customers banking activities. There are two aspects to consider;

Banks leading the way

For a US bank to excel this space, there are several points to consider;

  1. Banks should link their mobile wallet to a phones operating system and leverage the security aspects of the phone.

  2. Create a consumer banking platform that can allow all types of banking tools (including payments) and services that consumers what with their banking activities

  3. Partner with or buy a stake in a phone company, HTC would be a great candidate in the US market. A mid-sized bank could make a huge play for new customers with linking their wallet to a phone.

Banking data is something banks have a lot of and they need to leverage it. Empowering the merchant with more profile data can positively effect the users experience with merchants at the check-out and for merchants increase sales and revenue. But this will put much more pressure on banks and phone providers to ensure their risk profile systems are accurate.

Tech Companies changing directions

Tech companies often break out into different areas of business in an attempt to increase revenue. Few have ventured in the banking industry. Companies like Facebook and Google have explored with their relevant money transmitter licenses, which allows them to hold funds on behalf of their users. But none have applied for a full banking license.

Companies like Apple and Android have the technical platform to ensure the security of the banking details and also the ability to reduce the amount of friction for users to do all their banking and financial activities. Banking aspects such as, providing credit lines for specific users for specific types of products. Similarly, it would allow users to send more information to merchants during the transaction cycle to ensure they are leveraging a user’s loyalty and reward’s program. Fundamentally, there could be a situation where a wallet provider/platform that becomes an issuing bank could build a relationship with large merchants to process transactions directly with the issuer, bypassing VISA and MasterCard.

The next five years are going to be really interesting as the mobile payments market matures and grows internationally. Banks will also be finding new avenues to get more customers and offer more banking services that we are seeing from the smaller challenger banks.

Recent news is evidence that large traditional bank are now taking notice to the change and trend in challenger banks, with the Holvi, the European online current account banking platform being bought be BBVA. Mobile Payments and New Banking is moving full steam ahead and both tech companies and traditional banks will be fighting to gain control.

AndroidPay, ApplePay, Challenger Banks, ChasePay, e-commerce, eWallets, Loyalty, Loyalty Programs, Payments Ecosystem, Sharing Shopping Data

Loyalty – The Key To The Payments Ecosystem

I buy my shirts from a combination of about 4 different stores. They are a mixture of online retailers and physical stores. There is no monthly planning or budgeting on what I should buy or when I buy my shirts, which would allow me to take advantages of sales, I just buy when I want.

I’m typically an impulsive shopper, the process usually goes like this: I open my computer and go through my gmail, tab-by-tab. Starting with the first primary tab, I skim through emails that are important and open different emails, which I’ll read later. When I do come across emails from clothing companies that I’ve signed up for or bought from before (therefore getting an email), I just about always and click on the email and see what is new or what is on sales for that week.

Then, when I’m determining whether I buy something I go through a simple calculation of what I think I’ve bought this month and if I have any money left to spend and how important is it to get this shirt (and what is the price). But then, the most important part is, I look how much I have in my virtual account with the retailer (or loyalty points). This comes in the form of points or direct money which will contribute to my total purchase price. The feeling that I’m getting a discount pushes me over the line most of the time. Loyalty points are typically generated by previous purchases with the retailer. They often run promotional offers where you can get double points for a purchase.

All of us are a creature of repetitive behavior. The process I go through is typical of me and I’ve probably done it about 20 times over the last 4 years. I think this is really important for marketers and advertises to understand. Facebook do a great job of this, where if I like a clothing company on Facebook, it will suggest several other similar clothing companies. That’s great, they’re all very similar to my taste and not something completely different and therefore more likely that I buy something.

Sharing loyalty between similar companies. My loyalty points are very important when making a buying decision. If I was able to provide information to the 3 or 4 companies I typically shop at, about my needs for shirts and when I think I need them and I could get a discount and/or add to my loyalty program. That would be huge.

I’m a loyal shopper and I’m happy to send information on my buying behavior to retailers I trust to allow them to make better decision on what sort of advertising they in turn send to me.

The payments ecosystem is becoming more transparent and streamlined to allow and to become a more accurate and effective payment process. You can see this clearly with the strides that blockchain technology has made within the last year. If this can be applied to the interactions and trust between the buyer and the merchant and encouraging brand loyalty via the payments and advertising ecosystem merging together. The world would be a better place.