Glen Fossella hits the nail on the head in our opinion in
today’s article on “Think
Transactions Before Deposits” in Bank Technology News. He points that consumers increasingly think
in terms of payment transaction services, particularly the Millennials defined as under age 35. As we have identified previously in
this blog, growing payment alternatives including PayPal, prepaid cards, retail
cards like the Target Red Card or the Starbucks card, and non-banks are
stealing bank revenue from transactions while the banks keep “accounts.” The account revenue is not growing as others either steal the transaction entirely, or it's revenue by settling to the bank account as debit ACH. Mr.
Fossella rightly says, “banks need to reorient themselves to acquire
transactions first…”
Precisely and we agree.
But how do banks take their existing checking accounts and “reorient”
them to provide "unique transactional experiences" in the new payment ecosystem? We can help with proven results using four key
steps:
1) Brand
the account services in terms of its “payments” value, not as a dowdy checking account.
2) Provide
the key feature leveraged by “payments” providers specifically appealing to
Millennials: spending control and no
overdraft fees ever. No bank checking
account today offers no overdraft fees ever, even no return check charges!
3) Give
the consumer more control over payment security risk when shopping online or in-store.
Give them a second account they can move money to and from for debit spending
online or in-store. It is easier and
better than PayPal or prepaid cards for the consumer.
4) Give
the consumer immediate, automated liquidity for a transaction when they want
it. Others offer BillMeLater and similar options. Banks can automate and deliver liquidity options with cloud-based underwriting in real time.
Want an example for these four key steps: check out PaySound® “No Overdraft
Fees Ever” Checking Platform and Companion Card.
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