iPhone …
or Android
or Android
or Android
or Android
or Android … ?

Why “an AOS app” may not be enough

REMEMBER WHEN telephones were clunky, corded things you plugged into a wall and used only for the now quaint, so last-century practice of talking? And when offering phones in a choice of colors was a major step forward?

Girl w Rotary Phone

Thank goodness the Dark Telephonic Ages are behind us. So far behind us, in fact, that when you plop one of those relics in front of kids today, even the most smartphone-adept has no clue what to do with it. And what color is no longer the hot fashion question. With apologies to less prevalent operating systems, the hot question these days is iPhone or Android?

Trouble is, if you answer “Android,” it doesn’t exactly narrow things down.

Several iterations later, an iPhone is always an Apple product, resembles earlier iPhones, and on better than 72 percent of devices out there runs iOS 8.

Not so for Android. According to an article by TNW News writer Nate Swanner, 1,294 different Android manufacturers have unleashed 18,796 different Android models on the market—so far. More, if you break them out by available colors.

Nor do all Androids sing from the same music. This presents a challenge for the payments industry. Since there’s no telling which version of AOS a given customer’s device may run, it’s not enough just to have “an AOS app.” Apps need to work across as many software iterations and as many different kinds of device types as possible, and should undergo routine real-world testing to ensure a positive customer experience.

I am willing to go out on a limb and speculate that Samsung has the lion’s share of the Android phone market. I base this hunch on the fact that Samsung’s share is 43 percent, whereas nearest competitor Sony comes in at 4 percent.

Notwithstanding Samsung’s considerable lead, the number of Android manufacturers is six times what it was three years ago. I’m not sure whether to pity or admire upstarts hoping to take on Samsung. But then, giants aren’t impervious to challenge. Walmart overtook Sears as the world’s largest retailer. WordPerfect toppled WordStar, and then Microsoft Word toppled WordPerfect. Toyota overtook GM and, so far this year, Volkswagen is outselling Toyota.

Not to be overlooked, texting has overtaken voice calls. Something tells me the world has only begun to change.

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Wherein I
an important
new “product”

A significant event occurred last month in the payments industry.Yet for reasons beyond me, it went unreported in the press. You needn’t feel bad if the news didn’t reach you, for in fact it didn’t reach a lot of people. Moreover, you may not have felt its effects. It is only due to its immediate effect on me that I am aware of it and have decided to report on it. You can tell your friends you saw it here first.


Harrison is the one
on the right.

The event, which took place on July 3, was the arrival of Harrison Grey Wilcox. 7.4 pounds and 19.5 inches, if you must know.

Accuse me of abusing this blog solely to brag about my newest kid if you wish. I have two replies. My first reply is, “Yeah, so?” My second reply is a bit more involved, and actually has something to do with this financial services business that you and I are in.

Sometimes a technological innovation is so sexy that there’s a temptation to sit back, admire it for the thing of beauty that it is, and assume that the market will ooh and ahh right along with us. But the objective isn’t to solely to dazzle, nor solely to produce a return pleasing to shareholders, important as that is. Ultimately, products succeed when they make life a little better for real people living in the real world. That is the distinction between features and benefits, as any decent marketer knows.

“Make life a little better” is no exaggeration. Anyone who ever made a purchase by check in the 1970s or earlier knows just how painful the process was. (Note: I am way too young to have experienced that first-hand. I heard about it from my parents. Or was it my grandparents?) You had to dig for your checkbook, find a pen that worked, fill out the check and, doing the math by hand, record it in a register. You had to produce three forms of ID, which usually meant a driver license and two credit cards. Finally, the clerk had to run and find a manager to approve your check. All of this took place while a line of customers behind you grew longer and grouchier. I think it’s fair to say that the invention of a system that lets you simply wave your smartphone and leave has made life a little better. It’s faster, easier, less stressful, more fun, and a heckuva lot more secure.


They had to invent this before they could invent your smart phone.

The roots of this faster, easier, less stressful, more fun, heckuva lot more secure solution stretch farther back than you may think. Some credit surely must go to Basile Bouchon and Jean-Baptiste Falcon who, in order to bring the textiles industry into the 1790s, came up with a loom-controlling device that used punch cards. Their loom was a big success, and their punch cards were a bigger one. Innovative uses for punch cards followed until, in 1890, the United States government for the first time used punch cards to tabulate census data. This was thanks to a machine designed by Herman Hollerith, who was the first to think of using punch cards not just to control machines but to tabulate data. Not long after, Hollerith started The Computing-Tabulating-Recording Company. You may have heard of it, especially after it became International Business Machines, that is, IBM.

Progress accelerated. Punch cards gave way to magnetic tape, which gave way to an evolving series of magnetic disks, which gave way to an evolving series of laser disks, which gave way to … well, here we are today with pocket-sized devices that make Captain Kirk’s communicator look laughable and pack more computing power than housefuls of 1950s electronics.

Messieurs Bouchon’s and Falcon’s innovation in the late 18th century had profound effects on life in the there and then. Imagine their wide eyes had they been given so much as a glimpse of the changes brought about almost daily today by their great-great-great (and so on) grand-invention.

Holding Harrison in my arms, I can’t help pausing to think about the world of convenience and security that we’re building today, and wonder what it will look like by the time we turn it over to him and both of his (adorable) big sisters.

It drives home to me that what we’re doing with ones and zeroes matters not just in business, but at the human level. Over time, it may end up mattering a lot more than we can possibly anticipate. So let’s do it right.

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“Treat”: A Clinkle in Time

Whatever happened to Clinkle?

You may recall not long ago when an app by the name of Clinkle was on the tip of every tongue in the payments industry. The brainchild of wunderkind Lucas Duplan, Clinkle looked to be a game changer. No longer. According to Forbes, the company is struggling, losing dollars and employees en masse.


Clinkle had its start when Duplan, then 19, set to work on a mobile wallet app. It promised to be more secure than NFC by transmitting payment data over a short distance via high-frequency sound, and less cumbersome than QR codes and other POS procedures.

Two years later, Duplan wowed investors with his in-progress app—while not fully revealing it to them. Perhaps thinking that Duplan was keeping back details to protect his revolutionary approach, investors showed their enthusiasm by handing over an unprecedented $30 million in seed capital.

Clinkle was off and running. Soon it boasted 70 employees in lavish offices in a not inexpensive part of San Francisco. Duplan tried to impose a corporate culture à la Zappos. Yet despite growth and boasts, no one was quite sure what Clinkle was or how it worked. Rumors of a lack of underlying substance began bubbling up and multiplying.

Hopes rose early in 2014 when Duplan announced the recruitment of former Netflix exec Barry McCarthy and former Yahoo global search general manager Chi-Chao Chang. Chang showed up for his first day and resigned less than 24 hours later. Business Insider reported that “… Chang found the product and its marketing strategy in poorer shape than he anticipated.” McCarthy’s LinkedIn page shows he remained with Clinkle for six months.

Late last year, the app launched with 100,000 beta users, mostly students, including the student body of Weber State University, which is in my home state of Utah. Yet this beta app was a far cry from what Duplan had hyped to investors. Renamed “Treats,” it was no longer a payment app, but a novelty rewards app. And high-frequency transmission was not part of it.

The press pulled no punches. TechCrunch.com ran with the headline, “Mobile Wallet Laughingstock Clinkle Finally Launches To Let You Pay Friends And Earn Treats.” The brief article went on in mocking terms. A Wall Street Journal blogger had this to say under the headline “High-Flying Startup Clinkle Turns Into ‘Treats,’ a Debit-Rewards Program”:

The company revealed to TechCrunch on Tuesday that it has rebranded its app to the name “Treats,” a program that lets users send “treats,” or “rewards,” to friends.

If that sounds confusing, that’s because it is. Unlike typical rewards card programs, users do not earn points for themselves. Instead, for every seven transactions, they get a “treat,” which they cannot use personally but can send to friends.

In a Business Insider article dated April 14, 2014, writer Alyson Shontell reported that the high-frequency transmission feature wasn’t working because it was easily compromised by background noise. Meanwhile, NFC technology, whose initial unpopularity Duplan had hoped to exploit, appears to have reversed course and is catching on. Shontell goes on to suggest that working for Duplan and McCarthy was far from pleasant. That may or may not be so, but then, not many successful CEOs are celebrated for their sweet bedside manner.

What does the future hold for Clinkle/Treats? It remains to be seen.

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I don’t mean to brag.
Okay, maybe I mean to a little.

Matt 40 to Watch

For some reason and for the third year in a row, Bank Innovation has shown no better judgment than to include me on its list of “2015 Innovators to Watch.”

The 2015 refers to the year, not to the number of innovators, which is a good thing, because 2,015 innovators would have made for a long article. In fact they kept the list to 44, and I’m grateful and honored to be on it.

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It’s time to own the

Adapted from my upcoming Credit Union Magazine article



IT’S NO LONGER NEWS that payment relationships are a, if not the, wave of the financial services future.Experts have harped on the subject ad infinitum. People like me have harped on it, too.

Part of the message seems to have gotten through loud and clear. Financial institution decision makers are well aware that rising adoption trends attest to demand, and that being slow to supply risks losing business to speedier competitors. It is no idle threat. As mobile options supplant in-person transactions, it becomes easier for once-loyal clients to disengage and defect.

The reader needs no reminder of the value of sticky products, and payment options are proving themselves among the stickiest. Stickiness aside, they offer a wealth of behavioral data sure to make your marketing research people giddy with anticipation. Meanwhile, your CFO will delight in a new, substantial source of fee income, because clients don’t seem to mind ponying up for payment services. They’ll even gladly pay a little extra when they need a premium service like, say, a same-day transaction. I cannot recall another time in our industry when customers actually paid fees willingly.

So if the bottom line matters, you have plenty of reason to offer a full complement of payment services.

But the part of the message that doesn’t seem to have gotten through quite as loud and clear is the urgency not just to offer a full complement of payment solutions, but to out-and-out own the entire payment relationship.

The payments industry is splintering faster than a living room window in a fight with a baseball. And not just credit unions and banks have stepped up to the plate. A growing list of nonbanks like Google and PayPal and myriad merchants and utilities offer easy-to-use payment portals of their own. Every payment relationship a member sets up outside your portal weakens stickiness, and misses profit, longevity, and data mining opportunities.

It’s not too late. Clients still rate traditional financial institutions highest when it comes to payment providers. But that’s fast eroding. In its April 2014 North American Consumer Digital Banking Survey, consulting firm Accenture asked respondents how likely they would be to bank with nonbank companies if those companies offered banking services. Fifty percent said they would bank with Square, 41 percent with PayPal, and 31 percent with T-Mobil. Costco, Apple, Google, Amazon, AT&T, and Sprint all came in in the 26 to 29 percent range. Even at the low end, which isn’t all that low, this is sobering if not downright scary news for traditional financial institutions.

One problem with stickiness is that it works both ways. When a client engages with an outside portal, winning back that piece of the client’s business becomes all but impossible—assuming you even know about it. The best strategy is to enroll members and exceed their demands early, rendering needless all offerings from competing institutions and nonbanks.

I admit that owning the entire payment relationship is easier said than done. It calls for vision, commitment, resources, expertise you may not currently have in-house, and aggressive marketing. But the gargantuan nature of the task does not make it any less imperative.

There remains for financial institutions a small window of time in which set up or purchase and then market payment systems that are easy for clients to adopt and use. Though small, a window it is. I recommend leaping through it poste haste.


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