The unending identity theft problem: focus must expand from access prevention to consumer empowerment

The Target data breach is just one in an unending series of privacy exposures that create anger, disbelief and fear. Yet just as sure as it was not the first, it won’t be the last and trying to hold back unauthorized access to private data is akin to trying to hold back the sea. Yes we need better data security, and industry initiatives like PCI are vital to doing so, but with increased automation more individuals, applications and connected devices will create more access requirements, in turn giving birth to new problems at a pace that rivals attempts to stop unauthorized access. Data security is essential, but it’s time to realize that data security alone is not enough.

The time has come to shift attention more directly and proportionally to the problem we are ultimately working to stop unauthorized *use* of private data. Electronic commerce is all about consumer empowerment, and our research shows that individuals welcome opportunities to control more of their finances. Mobile payments and financial services are not just another convenient access point; smartphones, tablets and other connected mobile devices give individuals always-on and real-time control of any potential transaction that is being attempted through any other method (from in-store to online), and thus give individuals the power to stop unauthorized transactions made possible via data compromise, clerical error or any other means. Consumers want this shift of control and they largely cannot get it, and our efforts to solely stop identity fraud by focusing on stopping data breaches will never be enough. We need to give people what they want, and by doing so we will create further profitable and safe growth for electronic commerce.

Losers and Leaders in Bill Payment

It has been a newsworthy month in the world of bill payment startups. In a matter of weeks, Zumbox and Manilla announced they would close, and Intuit reportedly is in talks to plunk down $350 million to buy Check, arguably the best personal finance app in the market today. Check serves as an example to financial institutions that the new definition of “PFM” centers on mobile apps that enable on-the-go consumers to tackle on-the-go financial decisions more smartly.

The news that Manilla and Zumbox failed does not come as a shock. When I evaluated both companies and a number of other bill-pay innovators in a pair of reports in March 2012, I felt strongly that such direct-to-consumer startups would succeed only if they did something useful and practical for users today rather than offering the promise of an eventual digital lifestyle tomorrow. By my way of thinking, that meant enabling customers to see all their accounts in one place and pay bills — the “view + do” approach that’s vital in a mobile app.

As a result, I concluded Check (then known as Pageonce) was on the right course, Mint had been surpassed, and the companies that focused on digital archives and paper turnoff would struggle because consumers would not be satisfied with storing a mish-mash of documents.

The latter group of companies — which included Doxo, Manilla, Volly, and Zumbox — focused first on the ROI for billers, publishers, and other businesses without giving the ultimate users enough compelling reasons to change tried-and-true online- and paper-based habits. In a nutshell, their strategies were backward, risky, and would require a lot of patient, deep-pocketed investors. And we know investors typically like to see a path to an exit strategy.

A couple months back, Manilla showed off an impressive makeover that emphasized bill payment more, and I put the company back on my radar as a potential contender. Unfortunately, it now appears it was too little, too late, and now the Hearst-backed venture plans to shut June 30.

R.I.P., Manilla and Zumbox. But consumers need not grieve deeply for want of choices. Better ways to pay bills are coming, or are already here. Put Finovera and Simplee on your radar if you’re adventuresome beta-type. Finovera has an impressive online and mobile bill-pay and presentment app that could give Check – and FIs – a run for their money. And Simplee aims to tame the mess of paying and tracking health care bills. And that doesn’t even address the moves by billers themselves to enable mobile bill payments, or ventures that are targeting the underbanked, who too often pay bills the hard way – in person, in cash.

ApplePay is Like Listening to Barry White with the Lights Down Low. It’s Quite an Experience

This is my first inaugural blog here at Javelin and I will be talking about the intersection of experience design and payments. “The payment experience”—it is, if you think about it, distinctively human. Bartering, trading, transacting—all arrangements establishing a platform for a payment experience. Whether intentional or not, we have been designing this experience since, well, forever.

Although John Biggins can be credited (pun) for designing the first credit card, or “Charg-It” card in 1946, Frank McNamara, the inventor of the Diners Club Card, was the first to realize and challenge the then current (1949) payment experience. Read the rest of this entry »

The Inevitable ApplePay Blog

So, the payments unicorn has finally made its way out into the world, with more conjecture and hyperbole than, well, the last time Apple did something. Much has been written thus far about ApplePay and it’s going to be hard to write anything truly fresh at this point, but I will try.

While the mainstream media was ooing and aaahing over Apple’s innovative new product, us fintech geeks were generally a little underwhelmed by certain aspects. In truth, I was very impressed by the integration of biometrics and tokenization – absolutely leading edge in terms of where security should be (is a fingerprint a PIN, Mr. Durbin?), but the rest of the ApplePay news was a bit flabby and old. NFC? That’s been rattling around since 2003. Building a merchant ecosystem? Not really – just piggybacking on Google Wallet, Softcard and those nasty looking old terminals at McDonalds that have been gathering McGrime since 2006.

Read the rest of this entry »

Apple Pay Starts Today October 20, 2014 –So Why Should You Care?

 Why should you care about the Apple Pay launch?

Consumer Confidence in Mobile Purchasing is Growing

Apple iOS users are young: 60% are under age 45

Apple iOS users are wealthy: 7% have investable assets over $1 million

Read the rest of this entry »

Fraudsters Take Advantage as Mobile Convenience Outweighs Security for SMBs

The allure of both smartphones and tablets stems from convenience, pure and simple.  For SMBs, that convenience translates into greater productivity when using mobile devices to manage their business and their finances.  The situation is complicated by the effect that convenience has on the security posture of employees, especially those who are using their personal devices for business purposes (i.e., bring-your-own-device, or BYOD).  When convenience outweighs security, the scales tip to the detriment of SMBs. Read the rest of this entry »