Google’s Glass Guidelines Provide Clues to Future Bank Apps

I talk to American Banker about how Google Glass could be used in payments.

For banks, certain Glass apps have obivous appeal, says Rakesh Agrawal, principal analyst at product strategy consulting company reDesign Mobile. Two possibilities: fraud prevention and detection and real-time transaction alerts.

Agrawal says the app submission process could be a boon for banks. “I would consider that to be a good thing,” he says. “You don’t want phishers. If they [Google executives] weren’t checking submissions, it would be possible for someone to submit a bogus Bank of America app just to get people’s passwords.”

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Amex’s Twitter Deal Helps Validate Social Payments

I talk to American Banker about Amex’s new integration allowing you to buy products through Twitter.

 “Amex definitely legitimizes it,” says Rakesh Agrawal, a consultant on mobile payments and marketing. “They are a major player that has tens of millions of cardholders, and they are willing to spend on marketing.”

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Impatience at point-of-sale

I was in Washington state last week with my friend Amy and her 2-year-old daughter, Sophie. We went to the Northwest Trek Wildlife Park so that Sophie could see her favorite animal (bears) in person for the first time.

At the end of the visit, we stopped in the gift shop and I found an adorable shirt for her. (With a bear, of course.)

I handed the shirt to the clerk and my credit card to Sophie to hand over.

The clerk was having trouble with the scanner. She tried repeatedly to get it to ring up. In that time, Sophie twice picked up my credit card and moved it closer to the clerk.

Although Sophie doesn’t understand retail technology, she does know when something is taking too long.

The experience also made me wonder whether kids will use cash as much as we did, when they are growing up accustomed to seeing their parents (and their parents’ friends) paying for so many things with plastic.

Even the exposure that many of us first had to money — cash that our parents gave us to pay for school lunches — has been replaced in many U.S. schools by prepaid systems.

Opt in vs. opt out in tipping

To tip or not to tip
To tip or not to tip?, that is the question

The tip line. A somewhat passive-aggressive solicitation for money. It’s long been the norm at full-service restaurants, but it also appears at many places where I wouldn’t ordinarily tip. If I order and pick up my food at the counter, a tip seems unnecessary. If I pay cash, there is no default expectation of a tip. (Though there might be an easily ignored tip jar somewhere.) But paying by credit card, the tip is closer to an opt out. I have to explicitly draw a line through the tip line and write in a total. I’ll admit to tipping at places I wouldn’t ordinarily tip because of the subtle pressure. Sometimes I’ll pay with cash to avoid the situation.

Changes in payment systems are changing this dynamic. Increasingly, credit card companies aren’t requiring signatures for low-value transactions. With MasterCard’s Quick Payment Service, transactions under $50 can be processed without a signature. It’s faster for the consumer, moves the line quicker, but removes the opportunity to tip on plastic.

Square’s payment service offers a tip option:

Square's tip button is off to the side

This implementation is the equivalent of the physical tip jar: if you go through the normal transaction flow and just sign, there is no tip. You have to explicitly click the box in the upper right corner to add a tip. (I haven’t seen what the tip experience is like with Square’s new Card Case.)

Is that the right experience? It depends on whom you ask.

One merchant I talked to would prefer that the tip was part of the default transaction flow, as it is with a credit card slip. On a $5 food cart transaction, even a $1 tip is huge. As a consumer, I prefer the opt in experience. As a product designer, this is a great example of how even small changes can have big impacts.

Either way, the customer doesn’t have to do math. That’s already a huge improvement over the paper experience.

How to pay at Starbucks using your Android phone

Android-enabled Starbucks mobile payment device.
Android-enabled Starbucks mobile payment device.

Starbucks made a lot of noise recently with the launch of mobile payments in the United States for iPhone and Blackberry users. As an Android user, I felt left out (as is often the case.) But there’s a way to use your Android phone to pay for your coffee. Here are the steps:

  1. Borrow a friend’s iPhone or iPod Touch.
  2. Set up your account and enter your Starbucks card information.
  3. Go to the “Cards” screen and click “Touch to Pay”.
  4. Take a screenshot of the bar code that appears. (Hold the power and home buttons.)
  5. Email the screenshot to yourself.
  6. Print the screenshot. (I printed it at 35% zoom to get the right size.)
  7. Cut-and-paste (physically) the bar code to the back of your Android phone.

Viola! Mobile payment device.

It’s even better than the iPhone app: it’s quicker (no need to find and launch the app and click a button) and it works even when the battery is dead.

It lacks a lot of features. You can’t find the nearest Starbucks, reload your card or see your transaction history. But for the most common task of paying for coffee, it is the optimal experience. It would be nice if Starbucks stored your preference on whether to print receipts, but that’s an issue with either method.

This illustrates one of the key challenges facing mobile payment systems that are emerging: in their desire to get our money, banks and retailers have already made paying for things incredibly simple. Swiping a credit card is just.not.that.hard.

Any digital wallet will have to be just as simple. Launching various applications, digging through menus and entering security codes are all steps that add friction to the purchase process.

Apple, Google and others entering the NFC/mobile payments game would do well to have standardized interfaces to flip among payment, library, transit and access cards versus having every app developer design interfaces as he sees fit. These could be tied to location — if you’re at Starbucks, the Starbucks card automatically shows up first.