As many of you know, I’m a very mild mannered person – very, very few people will have ever seen me get angry. But sometimes dodgy PR does just that – forget road rage, I get research rage!

The latest was triggered from an article that starts:

“Britain is a country full of niche shops and charming cafes that attract both locals and tourists from around the world. Unfortunately, some of these shops don’t accept card payments and aren’t realizing that they’re shutting the door to the majority of customers who no longer carry cash.”

“The research revealed that one-in-five consumers reported to have left a store in the past six months, and didn’t make a purchase because they couldn’t pay with their card.”

“Businesses in London are most likely to miss out if they don’t offer card payment services — half (50%) of consumers in the capital have left a shop in the past six months because they couldn’t pay by card. On average, Londoners walk out of shops 8.6 times a year because they can’t pay by card.”

As much as I’d like to have you all believe this, much in that first sentence is rose tinted glasses. But the journalist has a job to do, so we’ll let that slip. But the claim that 120m transactions a year are lost because some shops don’t accept cards stands out particularly.

Let’s pull this apart somewhat.

• Numbers without context are meaningless. Last year, debit cards alone were used in 48% all retail payments, totaling 7.3 billion transactions. So the number we’re talking about here is less than 2% of card transactions – rather less dramatic

• “On average, Londoners walk out of shops 8.6 times a year because they can’t pay by card. I pay with my card everywhere, and for everything”. I can’t honestly remember the last time that I couldn’t pay by card, let alone every 6 weeks that this implies. Another highly unscientific survey, but of the 10 people I asked this morning, none of those could think of an occasion either.

• Making statements that many of us will automatically dismiss because we know they can’t be true (ie. 5 million Londoners have walked out 4 times of a shop because they couldn’t pay by card in the last 6 months is patently untrue) means we’re now likely to be as skeptical about all the numbers in the release.

You’ll note I’ve not mentioned the magazine nor the company concerned. My bigger point is that there are many others who are just as guilty in this regard, and I suspect they don’t even know it. Just as Donald and Stephen laid out in the report that there are do’s and don’ts in doing demos , there are simple things not to do in research.

Here are just a few.

#1 leading questions are not necessarily unacceptable (but certainly not preferable), but misleading with results aren’t. We get that you you’ve got a solution to sell – just don’t invent a problem or a story just for it to solve.

#2 don’t confuse or conflate cause and effect – too often companies make leaps from a data point to the solution, without proving the connection. And often there isn’t. That highlights either there isn’t a problem or poorly designed research or both.

#3 what value is being generated? Stating what is intuitively known already doesn’t add value. In this instance, saying by not accepting cards you’re missing out on card transactions adds no value. Understanding why they don’t accept cards is the more valuable insight.

So what should you do?

Well, use Celent is an obvious one! We can help at various stages of the process from questionnaire design to results interpretation to the resulting PR. Equally, use a research company who follows the appropriate professional codes of practice, and consider using a PR firm. But most importantly, have a clear set of objectives – “sell more” isn’t sufficient – which can be measured to see how effective the campaign has been. Whilst doing research is getting cheaper, it isn’t free.

And finally remember the golden rule with research – 38.2% quoted statistics are made up on the spot anyway!*

*Including this one

Last week saw a number of important developments at Google Wallet. Let’s recap what we’ve learned:

• Osama Bedier, the Head of Google Wallet, left the company.
• Google Wallet scrapped its plans to introduce a physical card to support purchases at the physical POS.
• Then, at Google I/O Developer conference, the company made a series of announcements about new features, such as:
  • Ability to send money to friends with Gmail and Google Wallet.
  • Instant Buy Android API designed for merchants and developers selling physical goods and services who are looking to simplify the checkout experience for their customers.
  • Storing of payment credentials in Chrome browser to speed up check out online.
  • Wallet Objects API to connect any loyalty programs, offers and more to Google Wallet.

So, what do we make of it all? Well, it seems that Google’s strategy for physical stores remains in limbo. When Google re-architected its wallet solution it solved some of the challenges, such as provisioning of payment credentials by moving them to the cloud. However, its continued reliance on NFC means that it remains difficult to scale rapidly. Google was widely expected to follow PayPal’s strategy of introducing a physical card for its account, but for whatever reasons that announcement never materialised.

While Google is not pulling the plug on physical POS payments, it now appears to have re-directed its efforts to facilitating payments online, whether through desktops or mobile devices. Some observers likened its strategy as “death to PayPal by a thousand cuts.” But I think Google is taking on more than just PayPal. It seems to follow a ”best of breed” approach by incorporate interesting ideas from various players:

• With email payments, Google takes on PayPal, but also many other P2P players, from Popmoney to Dwolla.
• Instant Buy Android API sounds remarkably similar to V.me and other digital wallets designed to help customers fill out their payment and shipping details at a click of a button.
• Leveraging the browser to facilitate check-out reminds me of what Dashlane is offering via its browser API.
• And Wallet Object API is almost a direct take on Apple’s Passbook down to notifications using the location services.

Google started its payments journey in the online space (remember Google Checkout?), went after the physical POS with Google Wallet and is now coming back full circle to payments online. Google’s multiple assets, such as the Android platform, Gmail and others, combined with these new ideas certainly seem like the right ingredients to succeed. However, as every cook knows, ingredients alone are not a gurantee of success. And it will be merchants and consumers that will decide whether they like the taste of the latest offering from Google Wallet.

Celent recently published a report, Branch Boom Gone Bust: Predicting a Steep Decline in US Branch Density. As expected, some misunderstood the report as another piece decrying the death of the branch channel. It isn’t. Instead, the report advocates embracing a “right-sizing” of the branch channel as a means to strategically invest in retail delivery models more appropriate for the market’s rapidly changing consumer preferences.

More recently, FMSI released its 2013 Teller Line Study, demonstrating the continued decline in branch foot traffic and growing per transaction costs experienced by its many, mostly smaller bank and credit union clients (see below). These aren’t new trends, and they’re not confined to the US. Yet, too many banks remain invested in historic operating models – despite the growing body of evidence that suggests dramatic change is needed.

I found one example of this occurring in higher education to be particularly fascinating – and bold.

The Georgia Institute of Technology (Georgia Tech) plans to offer a $7,000 online master’s degree to 10,000 new students over the next three years without hiring much more than a handful of new instructors.

Georgia Tech will work with AT&T and Udacity, the 15-month-old Silicon Valley-based company, to offer a new online master’s degree in computer science to students across the world at a sixth of the price of its current degree. The deal, announced Tuesday, is portrayed as a revolutionary attempt by a respected university, an education technology startup and a major corporate employer to drive down costs and expand higher education capacity. The story has been widely covered.

If closing branches sounds like heresy to retail banking executives in dire need of low-cost revenue growth, Imagine what the idea of offering an online master’s degree for less than 20% of the cost of a traditional, in-person lecture format will do to tenured professors heavily invested in their own traditional delivery models?

Some bankers argue the inadequacy of digital channels for sales because so many consumers desire a face-to-face experience for “complex” product sales. Is not a master’s degree complex? What about buying window treatments? Blinds.com has become the largest purveyor of window treatments through its online presence. But, buying blinds can be complex. There’s sizing, placement, color choices, degrees of light transparency, texture…the list goes on. Blinds.com addresses this by offering a by-appointment online videoconferencing experience it calls face2face. Consumers schedule an appointment with an expert online for a free video consultation. Consumers send blinds.com a picture of the window(s) in question, and the design consultant provides expert consultation at a convenient time – including showing you what your windows in your room would look like with various treatment options using the picture you provided.

To be clear, it’s too early to read the results of Georgia Tech’s experiment, but I applaud its aggressive approach to dramatically alter the cost and accessibility of higher education. Similarly aggressive banks step forward!

I’m attending Finovate Spring in San Francisco (Finovate.com). We’ve seen a number of great demos, and others that haven’t gone so well.  If you think of a classic consultant’s 2×2, with one dimension being strength of the idea and the other the strength of the presenter, probably the most unfortunate quadrant is the one that has a great idea, but shoddy delivery.

Here are a few tips to help Finovate speakers give a killer presentation that will have the twittersphere take notice (with apologies to those who prompted the observations):

1. First, before you do anything else, State the Problem that you’re trying to solve
2. Have a demo that works; extra credit for something live
3. Involve the audience, preferably with something live (see #2)
4. Have a catchy slogan
5. Print catchy slogan on a tee-shirt
6. Speak in a Commonwealth accent (Australian, British, Kiwi, South African – they’re all good).  Americans think you sound smart
7. Avoid using the terms “security,” “identity,” or “authentication.”  These are all terribly important, but from a presentation perspective, you’re starting from a hole ten feet deep.

Good luck to all of you presenting! And kudos, by the way, to Finovate for their iOS and Android apps.

Yesterday Barclaycard launched a new service in the UK called Bespoke Offers. The website will feature a range of deals from some of the UK’s largest retailers, including Tesco, British Airways, Virgin and Starbucks. Participating merchants will be able to target offers to consumers, who will be able to select the offers they like via the website or mobile app. The offers will include merchant discounts as well as deals which the customers have to purchase in advance, similar to daily deals offered by the likes of Groupon.

My immediate thought was that merchant-funded rewards (MFR) have finally landed in the UK. However, after the first inspection, it seems that it’s MFR with a twist. Most MFR programmes in the US are focused on issuers and their cardholders. Barclaycard’s offers are available to any UK cardholder; it would appear that Barclaycard is building more on its acquiring rather than issuing assets – it is one of the largest UK acquirers and sees a lot of credit and debit card transactions through its merchant relationships. The other difference is that the offers don’t appear to be linked to the card for seamless redemption. Instead, they are delivered as vouchers which the customers have to present to the merchants to qualify for a discount. Finally, at least at the start, there are offers which are generic and available to all customers – all I had to do to get a 5p off per litre of fuel at Shell was to enter my email address and the PDF voucher arrived promptly for me to print it out and present to the cashier. The website did not know anything about me and the offer was not targetted to me at all. Apparently, if and when the customers register and provide more details about themselves, the website then uses that information to target; until then, the customers can get access to generic offers.

Another interesting thing was that Barclaycard appeared to be introducing a new digital wallet called bPay. According to Bespoke Offer website, bPay “can be used with Bespoke and other retailers, where you see the bPay button.” Customers “can add new and additional cards to bPay anytime they are at the checkout.” The strange thing is that information about it was hidden deep inside the FAQ section of Bespoke Offers, so I wonder if this is something that Barclaycard will be officially launching later?

There is no shortage of voucher schemes in the UK. Weve, the JV of leading UK MNOs is just one the latest examples of companies ramping up its mobile voucher solution. After pulling the plug of Freedom, Barclaycard was always going to come back strongly with the loyalty proposition. Only time will tell if the new Bespoke Offers proposition will stand out in the increasingly busy space.

My last post mentioned that I was on a panel at International Payments Summit talking about real time payments. The topic is one that has cropped up many times recently in analyst inquiry calls in the last few months. With all the activity in the market, such as the decision in Australia to implement such a system, it’s perhaps not that surprising. What is surprising though is the number of myths and misunderstandings surrounding the topic. I thought it worth highlighting – and straightening – just a few here.

#1. Real time isn’t always really real-time

The most frequent myth is that everything end-to-end is suddenly instant. In reality, most (though not all) real-time systems are real-time in notification and authorisation, not settlement. In fact, in some systems in certain situations, settlement can take place days later. The starting point should be what needs to happen, and at what speed. In deed, for many payments, its the certainty, not the speed that matters.

#2 Real time isn’t p2p

One belief is that there is a pent-up demand for real time to enable p2p (or perhaps, more accurately, a2a) transactions. The use case is often quoted to be that of splitting a dinner check – one person pays the restaurant, the rest then have to find a way to pay the payer. But in reality, how often does that happen? The default in the UK at least would be tell the restaurant how to split the check across multiple cards. Even if that weren’t the case, the numbers of times that this happens would not be large enough to justify the investment on its own. The starting point should be use case driven though: who would benefit from sending – or receiving – funds faster than the current method. In most systems so far, these have been typically b2c or c2b, or indeed, mandated so the business case isn’t the issue.

#3. Real time isn’t just payments

In many instances around the world, real-time systems are often running 24/7. That poses, at the very least, 2 problems. Firstly, what other systems are required to run in real time, 24/7? Fraud checking, authorisation, notification and authentication systems are amongst the obvious, but banks have found dependencies on many others, and not just in the sending side. Secondly, maintaining systems becomes far more complicated if they have to always be available, and being “always on” means that maintenance becomes more important than ever.

I spoke recently during the mobile track at the annual NetFinance conference in Arizona.  My slot at the end of the first day meant that by the time my turn rolled around, I was faced with good news and bad news.  It was good that there was so much agreement among all the participants, and that the messages that I’d prepared were consistent with those of other presenters.  The bad news was that few of my messages were new, and I didn’t want to bore my audience by repeating what they’d already heard.  So I started by recapping the threads that kept appearing over the course of a stimulating day.

Key takeaways on what was important:

1. Mobile: Critically important; the change from just a year ago is stunning
2. Location:  Especially as a distinguishing feature of mobile
3. Customer experience: You’re competing against expectations set by non-financial firms. It’s not just mobile, it’s not even just digital, it’s the unified customer experience, across the bank.  And that’s not easily quantifiable
4. Business case:   Those in the room agree it’s a little squishy, but make-able, but it’s critically important to executive leadership. Many of the exhibitors and speakers are working toward providing solutions that will make capturing that data easier
5. Data: Capturing insights and measuring / analyzing results is critical; it’s best to build in these capabilities at the beginning; experiments are even better so that the causality / correlation puzzle can more easily be solved
6. Regulation: Serving customers digitally is harder for banks than, say, retailers, but that’s no excuse – customers still expect a great and valuable service
7. Customer: The number of banks who touted putting the customer first was extraordinary.  Now we have to see whether their actions follow through on these encouraging words.  Is mobile a chance to teach them new habits?

The degree of consensus around the importance of mobile was striking.  The challenge for the bankers attending, and for the vendors helping them, is to move from preaching to the choir who attended NetFinance to bringing new members into a broader congregation.  Business cases coupled with compelling anecdotes, examples and case studies will help with this. Before embarking on any new digital strategy today, firms should embrace experimentation and data analysis.

Here’s the NetFinance link: http://www.wbresearch.com/netfinanceusa/home.aspx

I recently had the opportunity to accompany my four year on a school field trip to the Apple Store. Frankly, I had no idea that Apple even offered school field trips. Not only do they offer field trips, they offer FREE field trips. It’s a pretty simple formula. Get the little ones into the store, delight them with a fantastic experience, and instill the desire for Apple products. The kids will then of course start to beg their parents for an iPad or iPod Touch.

I have to say that the field trip experience was extraordinary. We entered the store in the early AM, prior to opening. A team of Apple Store staffers greeted us with thunderous applause and proceeded to hand out t-shirts to all the kids. The children were then directed to take a seat in front of one of the many iPads that were setup on the large square tables. Each student had access to their own iPad and was neatly seated around the giant tables. One of the staff members then walked them through basic iPad use, including using the camera, opening apps, etc. The kids had a ball (so did this parent). While we were finishing up, a group of senior citizens began to arrive for a session on how to use Pages.

Why am I telling you this story? The experience got me thinking about what all this means for banking. The branch isn’t dead, even if branch density is on the decline. The role of the branch has to be reinvented.  What can banks take away from my Apple Store experience?

• Use the branch as a training center. Roll out the large square tables equipped with multiple iPads. Offer training sessions on how to use online/mobile banking, seminars on financial education, etc. This can be used as a method to boost digital banking adoption. Sessions can also emphasize solutions  that have lower adoption rates (e.g. bill pay, PFM). In-branch training can also be geared to certain age groups. I would love to take my four year old on a field trip to the bank and have it be an educational and fun experience! 
• Provide access to digital tools when training is not taking place. Customers should be able to come up to the table and play around with the equipment. Let them open accounts, login to existing accounts, book an appointment, view interactive brochures, etc.
  

This is just the tip of the iceberg, clearly a lot more can be done with branch real estate. Some banks are starting to go this route, with somewhat different twists:

• Bank of America – Using The Branch to Sell Mobile
• Citi Pursues ‘Smart Banking’ Branches

The Citi Work Bench

And for those of you wondering, yes, my daughter has requested (and been denied) a “mini iPad.” I’m looking forward to the day when she voluntarily asks me for a savings account.