Thanks for all the feedback from yesterday's post. The post was not intended to be an end-all be-all, but the opening of a discussion that turned out to be fairly interesting over Twitter and e-mail. Regardless, I wanted to address two specific issues that were not discussed in the original post, namely Mobile and Post-Transaction Customer Servicing.


The mobile phone has truly become the most essential banking interface for many consumers. With the ability to quickly check your bank balance and transaction history, enter a check image, pay a bill, etc the mobile experience has really made the banking branch and the teller (both human and automated)  less relevant to our daily lives. Where these apps and technologies need to be furthered is in handling transactions.

In the context of the discussion yesterday, and particularly relating to mobile wallet and mobile payments, it seems that we're finally getting closer to that reality. I've discussed the issues around NFC previously on this blog (sadly, they are still the same despite the elapsed time), but there are inklings of hope that NFC will be in mobile phones, enabled for use by phone applications. Independent of technology platform though (Square has gotten around NFC with their dongle, after all) , mobile will likely become the standard for consumer transactions, with merchants and p2p, as the proliferation of smart phones expands.

Now, I have had the chance to see first-hand, some of the more exciting examples that are taking shape in the 3rd world, using non-smart phones, such as the innovative work done by Tagattitude and Obopay across Africa. I've also had the chance to play with Jibun Bank's mobile-only experience in Japan. I've also spent time looking at Paypal X and their new payment infrastructure for mobile. I'm not sure any of these solutions truly covers the 'Apple of Consumer Credit' model, which i'll outline below.

Apple of Consumer Credit: Mobile Edition

Leveraging the premises from yesterday's post, we can assume that this new "Apple of Consumer Credit" has a direct relationship with both merchants and consumers, and is providing services to help the merchant build and understand their business, while encouraging the consumer to interface through an engaging UX.

Mobile would be a natural extension of that approach, specifically acting as the entire POS, or at least a part of the authentication process. Think of the following scenario

You're at the Apple store buying a laptop. The customer service rep offers to ring you up right there (as they do today). They open up the application, instantly have your ID and account information load up (Bluetooth or NFC), and enter the bill information. Using NFC, the bill is instantly transferred to the consumer's mobile phone, where the consumer is prompted with a few options - pay now using your mobile wallet, consider a promotion (from the Apple Store, or potentially another partner the consumer has a relationship with prior to the transaction - think Verizon FIOS is giving a $100 discount on a Macbook to new subscribers), apply for a credit line, or cancel the transaction.

  • If the consumer chooses to pay now, they choose which credit/debit account to use, authorizes the transaction with a thumbprint or a signature. The amount is prepared for transfer to Apple Store's merchant account, with an authorization code transferred to the Apple Store representative's phone. When s/he clicks on the authorization, the money is transferred from the customer's account to the merchant's account.
  • If the consumer chooses an offer, the amount is changed to reflect the discount, and the consumer is prompted to pay or apply for a line of credit.
  • If the consumer chooses to apply for a line of credit, the system would transmit information to the merchant and display the response (approval, interest rate, terms). The consumer can then accept the credit line and move forward with the transaction - the approval is sent to the account rep who can then approve the transaction and hand the customer the new laptop.

In all cases, the transaction is fairly effortless, enables the consumer to have a full understanding of outstanding offers available at the time of purchase, and the ability to review the items purchased post-transaction (not just the total amount). This helps during tax time (hello unreimbursed Business Expense), and in tracking spend at a more granular level.

For the merchant, its a stronger user experience that enables customized deals at the POS, and greater transparency on user purchases. With partnerships with other retailers, the merchant might get a better sense of your spending habits, outside of their stores directly, enabling them to customize deals in partnership with your favorite merchant (think Apple Store offering a 'Thank You" for buying a MacBook, say a voucher for $50 at Staples for office supplies, or a voucher for your favorite restaurant).

Post-Purchase Customer Service

This "Apple of Consumer Credit" having ownership of consumer and merchant data enables it to do some amazing things, particularly on the post-purchase side of things.

  • Warranty cards are painful sometimes - the "Apple of Consumer Credit" can offer you a painless warranty card fill-out process at the time of purchase. This allows merchants to know instantaneously when items are purchased, and be able to send consumers key notes on upgrades, customer service, and warranty periods.
  • Returns are a pain in the neck at stores that do not keep electronic receipts effectively - if they use the "Apple of Consumer Credit", the consumer always has all their receipts, so there will be fewer disputes.
  • When an item is recalled by a manufacturer, they can go to the "Apple of Consumer Credit" and know exactly who needs to be refunded and/or who needs to be told about the recall.
  •  For consumers who are over-returning items, "Apple of Consumer Credit" can manage such customers and give them a score across merchants, which will help limit that activity.
  • As a service to customers, the "Apple of Consumer Credit" could offer extended returns, extended warranties, and buy backs, either in partnership with or secondary to the merchants. These are great credit card services that can be managed at the individual purchased item level.

Who's Best Situated to Handle This

I still believe that the vendors discussed in the previous post are appropriately positioned to offer this level of service to merchants and clients.


Thanks for all the feedback.