Credit Union Geek

Marketing, Strategy, and The Force by Joe Winn

Tag: merchants

Doing The Least Possible to Minimize Card Fraud

This CUbit is a bit different.  It’s meant to be heard, rather than read.  Why?  Because why not?

Here’s a primer: Card fraud.  Up close and personal.  With a topping of, “not my department”.

What are your experiences?  How do you like the audio format?  Share in the comments below!

PS – I maintain card security like a fiend.  I avoid letting the card go out of my sight (as at restaurants), use the card only at EMV (chip) terminals, and make most of my purchases using Apple Pay.  I won’t use gas pump card swipes (I get branded gift cards instead).  For online purchases, I create one-time use numbers for merchants I don’t trust (essentially, if they’re not Apple or Amazon).  All my accounts use unique and complex passwords with two-step verification where available.  If my information can get stolen (still don’t know how), anyone’s can.  It’s why I support merchant security standards and encourage use of tokenized payment systems.

Making Change With Your Change

Unless you were in cryogenic storage on your way to Pandora, you’re likely aware of the Apple event held Tuesday (September 9).  Among the wonderful surprises they had for us was Pay (properly written as shown with the Apple logo…Mac users, that’s Option-Shift-K).

Tim Cook explained that their goal was to make the lowly leather wallet a thing of the past.  Pay is their first step in that direction (though I would say the iPhone began the journey, carrying photos, cards, and more, but, stay on topic here, Joe).  Is it as revolutionary as implied?

Yes.

Apple is unique amongst technology companies.  They are rarely first to announce/release anything.  In fact, they are often last.  Music players?  Archos had decent-enough MP3 players long before the iPod.  Phones?  Palm, Microsoft, and RIM (Blackberry) made smartphones for years prior to the iPhone announcement.  Tablets?  You could buy a Windows tablet way back in the 90s.  Was it terrible?  Only if you wanted to use it like in Star Trek.

Waiting is a tough pill to swallow.  You’re watching potential market share pass you by, and shareholders see profits missed in every competitor’s sale.  But, if done strategically, it can make you great. More about waiting in the future.

Google has had a mobile payment system for a few years now, called Google Wallet.  It integrates with Android (and iOS) devices, and on certain phones, can support touch-to-pay at merchants using compatible terminals.  No credit cards to carry or swipe.

Sound familiar?

In principle, Pay is no different than efforts made before.  It imagines a future where we pay for things easily and securely by waving our phone (or wrist) in front of sensors or tapping a button on a website.  Money is transferred.  We get our coffee.  The universe is happy.

What makes their platform unique is scale, trust, and integration.  At launch, over 80% of cardholders will be supported by large banks and Navy Federal.  I’m certain the second line of launches is not far behind.  Where can you use the system?  Well, launching with over 200,000 places ready to go is nice.  Knowing every Whole Foods you enter will accept your phone to pay is reassuring.  Then there’s trust.  I won’t delve into what makes the system so secure, only the most visible: a fingerprint.  To pay, you “sign” by validating your fingerprint.  Can’t fake that one.  Finally, the concept is integrated into places both in the real world and online.  Sites/apps will have a “Buy with Pay” button, eliminating the need to enter your name, address, card number, expiration date, or anything.  Again, verify with a finger, and you’re done.

Does Apple make money from it?  Sure.  Does it make our lives just a bit easier?  Definitely.  I realized yesterday that Apple obsesses over the things we consider minor annoyances. What bothers you is a critical flaw for them.  Frustrated you left the light on in the living room before leaving for a trip?  Properly equipped, you can get a notice when your phone detects you’ve left the house, asking you if it should be turned off.  Did you leave the credit card you wanted to use for shopping at home?  That’s ok, you can just tap it in your phone.

Integration of our lives digitally is happening.  Claiming each improvement is only a small change with no revolutionary impact is being short-sighted.  Seldom do we realize we’re living a new chapter in the next generation’s history books.  This was another turn of the page (or screen, on the hovering-holo-e-book-reader).  If you’re not already preparing for this and what will evolve from it, you’re falling behind.

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