TSYS Survey: Mobile Apps Drive The New Payments Environment

Mobile apps geared towards wallets and collections of offers – but not necessarily making purchases –are a major driver of the new payments environment, according to TSYS’ 5th Annual U.S. consumer payment survey of 1,000 U.S. consumers who have both debit and credit cards. TSYS is a leading payments processor.

It is a grouping that probably favors the over-banked compared to the under-banked. Yet we look to the TSYS survey for signs of new influences on marketing and the relative clout of players such as Apple, Amazon, Google, Microsoft and eBay in a new payments environment that will impact shopping and buying behaviors for both local services and retail goods.

According to the survey, Amazon has the most downloaded mobile app, with 57 percent of respondents downloading. It is the second most used app, with 38 percent using it at least several times a month. Banking apps have been downloaded by 50 percent of respondent, and are used the most frequently by this survey’s respondents at 39 percent. Paypal follows at 52 percent downloaded/32 percent frequently used; eBay comes in at 48 percent/22 percent and Starbucks is at 29 percent/15 percent. As a category, Daily deal apps such as Groupon and Living Social are also widely disseminated, with 37 percent/19 percent.

Most Downloaded Financially Oriented Mobile Apps (Selection)
1. Amazon (38%)
2. Banking Apps (35%)
3. PayPal (32%)
4. eBay (22%)
6. Daily Deal Apps (19%)
12. Starbucks (15%)

A free report summarizing the survey notes that consumers typically look for an incentive when choosing one payment option over another. Fifty-eight percent said that they have a rewards program attached to their most preferred payment type.

What is the Best Anchor for Cross-Selling SMB Services?

Are we moving from an era where SMBs relied on “local” channels like Yellow Pages for marketing to vertical platforms, that anchor a wide range of services that can be integrated as a bundle or upsold?

That’s what an increasingly heady number of vertical services are banking on.

Here’s a short list of the new platform anchors:

• Business Cards: Vistaprint
• Checks: Deluxe
• URLs: Go Daddy
• Insurance: USAA
• Payment Processors: Amex, First Data
• Productivity Software: Microsoft
• Accounting Software: Intuit
• Reviews: Yelp
• Email marketing: Constant Contact, Fish Bowl
• Search: Google, ReachLocal, Yodle etc.
• Social: Facebook, Manta
• Coupons: ValPak
• Prepaid Deals: Groupon
• Business Loans: PayPal

For each company, the goal is to establish itself as the anchor, and either upsell to inhouse services, or position itself as the sales lead in order to take the largest cut of revenue.

At BIA/Kelsey’s SMB show in Denver a couple of weeks ago, I did an onstage talk with Vistaprint VP and GM of Digital Services D. Scott Bowen. Vistaprint got its start in 1995 in the Netherlands; went public in 2005, and as part of the international Cimpress conglomerate, has worked with 16 million SMBs, many of whom are lured in by the promise of inexpensive and easy-to-produce business cards.

The company has made a full court press on wining digital upsells via its purchase and integration of Webs.com in 2011. It had begun offering digital services in 2008.

I was personally familiar with the service, having just gone online to buy business cards for LocalOnliner, and then got upsold to rubber address stamps. I could have gone further and bought logos, envelopes, letter head, coffee cups and then also gone digital with search packages, websites and hosting. . I can tell you this: they’ve developed a great, seamless service.

Bowen told me the average customer spends $44 at a time; actively renews and upsells; and – perhaps most importantly — looks for blue chip services they really trust. Is VistaPrint ultimately the best anchor to help SMBs “cross over” to digital? That’s obviously Bowen’s challenge. Roughly 10 percent of revenues come from digital today.

@LocalOnliner: Day 1, BIA/Kelsey SMB (Hibu, Constant Contact, Home Advisor, Booker, YP)

Hibu USA CEO Kevin Jasper
1. Sales team is now 1,600, down from 4,500 peak. Bringing in new talent.
2. New customers we acquire today are almost exclusively digital.
3. Prints revs still more than half. Digital will surpass in next several quarters.

Constant Contact SVP Joel Hughes
1. $100 Constant Contact package cost breakdown: $85 FaceBook spend, $15 management fee.
2. Two changes in smb marketing are advances in audience targeting and rise of native advertising.

Peter Hutto
1. Three changes in SMB marketing: low cost tech, tools, data; massive, global audience platforms; digital consumption shifts.

Home Advisor CEO Chris Terrill

1. One million appointments forecast for Home Advisor in 2015, with service launched 6 months ago.
2. $350 mm anual rev, 7 quarters of accelerating growth, 12 years of consistent profitability.
3. “Multi vertical” vs. “focused vertical.” Best way to grow is focus on single vertical.

Booker CEO Josh McCarter
1. Retention we see (for service platforms)..churn is 3-6% a month. Booker’s is 1/2 percent.
2. Stand alone scheduling is insufficient…SMBs have real world needs” (for integration)
3. At Booker, we’re seeing 30% of (SMB) sales come from pen and paper. totally disconnected.
4. LocalCommerce Market: Less than 25 k: 15 m. More than $25k: 7.5 M.
5. Service businesss account for 60% of US GDP
6. “Local service commerce” cuimlination of online/offline to drive offline–encompasses all tools.

YP SVP Harpreet Marwaha
1. YP hiring 200-300 reps per month for past 6 months.

BIA Kelsey Data
1. 57% of SMBs use Facebook for marketing, per BIA/Kelsey survey.
2. 3,022 companies in the Local Verse.

Pinterest: Buyable Pins and the Evolution of Social Commerce

Pinterest has great goals for its new Buyable Pins program, which it believes will make social commerce relevant again, and mobile shopping usable. During a keynote at Cardlinx’s “Data Driven Commerce” event Sept. 22 in Bellevue, WA, Pinterest’s Head of Commerce Business Development Tiffany Black said the two month old program enables mobile and social commerce for a new generation for which social commerce has died, and mobile shopping is “terrible.

“There’s nothing ‘Group’ about Groupon anymore,” Black quipped, referring to its current identification as a marketplace. She also argues that social gamification sites such as Sneakpeek are also done (although we would argue that other social game sites such as MOGL and Lucky Diem have plenty of life left in them).

In any case, Pinterest shouldn’t be lumped in the same categories, says Black. It is a “forward looking,” “visual discovery platform,” “where people are thinking about tonight, tomorrow and next month. “Pinners are planning for their future,” she said.

They are also highly oriented towards mobile. Eighty percent of Pinterest’s 100 million monthly users come in via mobile devices.

While there have been complaints about the Pins turning Pinterest into a schlocky shopping mall, Black says it is only as commercial as its users want it to be, since it is entirely personalized. Top pins are food and drink, fashion, home improvement, health and fitness, cats and travel, she notes.

There’s also no problem with the merchants, which receive buyer information to confirm every purchase, with Pinterest merely acting as a common carrier. Currently, Pinterest is enabling purchases for 5,000 merchants and two million products.

BoA Sees Card Linked Offer Program Deepening Customer, Merchant Relationships

Bank AmeriDeals was launched in 2012 with the most ambitious marketing effort in the card linked offer space. Since then, the promotions program has given BoA insight into spending for over 35 million accounts, and helped deepen customer and merchant relationships, says BoA’s Alfred Hamilton, SVP of Bank AmeriDeals, during remarks on Sept. 22 at Cardlinx’s “Data Driven Commerce” event in Bellevue, WA.

Noting that customer attrition has gone down among Bank AmeriDeals users, Hamilton says that customers have gone from being leery of having their spending habits scrutinized in order to target them with better offers to actually wanting more specific targeting. “We’ve come a long way from ‘this is creepy,’ he says. “Customers expect offers to be very, very targeted.”

Bank AmeriDeals continues to make the safeguarding of consumer data a top priority, however. “No customer data leaves the bank,” Hamilton emphasizes. “We don’t have insight into all your wallets, just your BoA wallet.” That insight has proved critical for showing businesses how much incremental business AmeriDeals is providing them. As “retailers are getting more astute in this space, they need to know that this is incremental business we are getting for them,” says Hamilton.

Separately, Hamilton notes that Bank AmeriDeals is riding the wave from desktop towards mobile payments. With 18 million Bank of America customers now using mobile banking services, desktop-oriented online banking has become increasingly “kind of passe,” he says.

Hamilton’s insights into the positive impact of card linked offers were seconded at the event by Cardlytics U.S. Operations President John Brown. Cardlytics is the vendor providing the platform for Bank AmeriDeals, among other bank efforts.

Speaking generally, Brown said that card linking has multiple benefits for financial institutions beyond direct revenue – al leading to more engagement and less attrition. He notes that users do more online and mobile banking after activation, increasing their monthly sessions from 7.9 times a month to 9.1. times a month. They also increase their total monthly spend after their first redemptions by 5-7 percent;. It also helps boost a financial institutions’ CRM program because the interest in seeing offers plays a role in boosting email open rates by 2x, and click through rates by 10x.

Brown also says that the roster of companies providing card linked offers is getting increasingly stronger. While many brands are watching early results before they sign on, brands such as McDonald’s and Nordstrom Rack are participating and attracting redemptions from well heeled consumers. “Upscale people eat at McDonald’s as much as anyone else,” he says.

Microsoft Earn: CLO Effort Aligns ‘Time, Location, Context, Commerce’

Microsoft continues to push ahead with its card linked offer program, which has been in Beta in Washington, Arizona and Massachusetts since May. But since we last wrote about it in April, the program has been rebranded from Bing Offers to Microsoft Earn. The program is now more oriented towards promotional redemptions at The Microsoft Store. Registrants can earn points at participating merchants towards Microsoft products.

Participants in Microsoft Earn include hundreds of local restaurants, as well as national brands with local outlets. THey include 7-Eleven, Starbucks, Papa John, Whole Foods, Shell and Pet Smart. 1-800-Flowers is also participating.

Speaking at Cardlinx’s “Data Driven Commerce” meeting in Bellevue, WA, GM of Holistic Monetization Erik Jorgensen says “merchant acceptance is shifting from skeptical to believers.” CLO represents “a great signal for measuring the impact of the digital world to the real world.” It provides “friction free, almost magical consumer experiences.”

Early results have been promising with “member acquisitions easier and engagement great than anticipated,” said Jorgensen. “Meanwhile, customer confusion and support (issues) have been less than anticipated.”

Microsoft Director of Payments Will White said that CLO is an anchor product for a new generation of commerce built around wallets and authentication (“vitally important”), ease of use and personalization. CLOs “align time, location, context and commerce,” he said. The idea is to use signals to offer the right things at the right time.

LivingSocial Launches Card Linked Offers for Restaurants

LivingSocial – which has played Avis to Groupon’s Hertz in the prepaid space –has been in retrench mode under new CEO Gautam Thakar. Today, it announced a new Card Linked Offer (CLO) loyalty program for restaurants called Restaurants Plus. The program is launching in Atlanta with 100 restaurants, to be followed up with a launch “very soon’ in Washington D.C., where LS is headquartered.

Under the program, which has echoes of LivingSocial’s groundbreaking “Walk In” mobile deals in 2011, restaurants decide when they want to promote a special, and how much they want to discount (up to 30 percent). They can change the offer throughout the day. For instance, they can discount more heavily after dinner. As with other CLO providers, the idea is to do away with vouchers and coupons. Once customers register a credit or debit card, they only need to present the card to receive a discount.

Customers can use LivingSocial’s mobile Web or desktop app to access the Restaurants Plus directory, which also displays the savings and times that restaurants are offering cash back. A minimum amount of cash back must be reached, or the savings roll over into the next month. Here is a video about the program.

Restaurants in Atlanta’s program range from cafes and ice cream shops to breweries and full-service They include Campagnolo, Corner Pizza, Gekko Sushi and Lounge, Gordon Biersch (Buckhead), Henry’s Midtown Tavern, Meehan’s Public House and Murphy’s Atlanta Restaurant.

Speaking at the Cardlinx “Data Driven Commerce” event on Sept. 22 in Bellevue,WA, CRO Doug Miller noted that “the opportunity to do something with cardlinking and media is powerful” — especially at the local level. “The sexiest place for that is local. You can influence the local decision. A lot of money is being spent in the local space.” In LivingSocial’s analysis, card linked offers brings it closer to several attribution points, including “Premium merchants,” “approachable sophisticates,” “discover my city,” and “saves me money.”