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Surveying the Payment Landscape for 2015

Credit card payment transaction Whether you think credit cards are a boon to your business or a necessary evil that chips away at your bottom line, you probably accept them for payment, along with checks and (in rare cases) cold, hard cash. Visa alone saw over 2 trillion dollars in charges last year, generating billions of dollars in fees for everyone involved in the credit card processing chain. It may not be the most cost-effective way to collect payment, but few would argue that it’s not incredibly convenient for both merchant and customer.

That quick “swipe” of a card has been the de facto method of paying for goods and services (especially at “point of sale”, e.g. a cash register or similar service experience) for decades. Dozens of companies have tried to challenge this; a few have succeeded, albeit partially – PayPal, for instance, has successfully built a payments system that both embraces credit cards and circumvents them whenever possible (using bank accounts). Most innovation, though, hasn’t really changed the basic “swipe and wait” interaction we all know so well. Recent innovators such as Square (and its imitators) simply make the swiping more accessible by enabling it on a tablet or smartphone.

There are many reasons that this landscape changes so slowly; primarily, it is because entrenched players want to keep it the way it is. Every party in the credit card processing chain takes a small cut, and those half pennies here and tiny percentages there add up to billions of dollars in fees every year. But it’s also because of the rapid rise of fraudulent transactions; credit card companies claim (in some cases correctly) that they are best equipped to make sure that a given transaction is legitimate. They’re understandably hesitant to hand the keys to mansion to anyone else.

2015 could be the year that we see a big shake up in the payments industry. To understand why, you just need to remember two names: Apple and Walmart. Both companies are big enough players to push a lot of people into new ways of doing things. And, interestingly, each company is attempting to change the way we pay for things in completely different ways.

Note: When I talk about this shake-up, keep in mind that I’m mainly referring to “mobile” payments. The term “mobile” payment is an odd one, since most payments are still “mobile” payments in the sense that you make them with a credit card at a merchant’s place of business. What “mobile” really means in this context is paying with your smartphone.

Apple Pay

Apple’s new payment system has only just launched, but CEO Tim Cook says it is already bigger than any of the other mobile payment systems on the market. Apple’s approach is, as you might expect, very consumer-centric – they are endeavoring to make the payment process easier for the consumer, without much regard for the merchants themselves. This means that the process of paying is as simple and seamless as possible – when it works right, it’s actually easier than pulling out a credit card, swiping it, and signing a receipt. You just bring your iPhone near a compatible credit card terminal, authenticate with Touch ID (the fingerprint sensor), and you’re pretty much done.

Interestingly, Apple worked directly with the big credit card companies to make this happen. Much like when they launched the original iPhone, Apple is not afraid to walk in and push around established players (they famously extracted a variety of concessions from AT&T for an exclusive launch on that carrier, including not allowing them to put their logo on the iPhone). In the case of Apple Pay, the established credit card companies still provide the credit cards and process the transactions, earning their standard fees. Apple adds in a very small cut, and assumes some of the fraud risk in the process.

The difference is in the mechanics of the transaction. First, Apple uses NFC, or Near Field Communication, a technology that has been around for many years in the form of “wave your card” terminals such as PayPass. NFC is only available on Apple’s newest phones, but it’s been available in other forms for a few years, including Google’s largely unsuccessful Wallet payment system. The benefit of NFC is that so many payment terminals already accept it.

In addition, Apple Pay doubles down on security. First, when you activate your credit card for Apple Pay, Apple actually generates a new credit card number that is only used for Apple Pay. The payments are still processed the same way, but the number is exclusive to Apple Pay. Second, Apple Pay uses the fingerprint sensor by default, so it is much more difficult for someone to steal your phone and use Apple Pay fraudulently.

Will Apple Pay succeed? Probably, by virtue of sheer volume. Apple’s iPhones have sold incredibly well, and Apple’s alliance with the credit card companies means that consumers get to keep the things they like about credit cards – float, miles, other benefits – while getting a little bit more convenience and tracking of their purchases.


If Apple Pay falters or fails, it may be as a result of another behemoth – Walmart. The retail giant has made no secret of its disdain for credit card companies, going so far as to sue them over the fees they charge. Walmart is leading a consortium of retailers – the Merchant Customer Exchange, or MCX – that aims to reinvent mobile payments completely.

Next year, MCX plans to launch a service called “CurrentC” that will attempt to bypass credit cards completely. Instead, CurrentC will withdraw funds directly from a customer’s bank account. In exchange for direct access to your checking account, CurrentC promises coupons and other benefits exclusively for customers that use its payment system.

CurrentC is built by merchants for merchants; its two primary goals are bypassing the interchange fees that credit card companies collect (these fees range in the 2–3% range; for a company like Walmart, with margins around 3–4%, you can see how this could make such a huge difference) and collecting lots of useful data about customers and their purchasing patterns.

This type of system has seen success in the past. Starbucks, for instance, operates a very popular payment and customer-tracking system, based around stored value cards and smartphone apps. Even more similar to CurrentC’s model is Target’s Red Card program, which offers you five percent off everything, all the time, in exchange for direct access to your bank account and information about your purchases.

But Target is a great example of how retailers have been less successful at fighting fraud than credit card companies; Target’s massive security breach last year was one of the biggest ever in retail history. It remains to be seen whether consumers will entrust merchants with so much personal information in exchange for special offers and coupons.

More troubling (at least to a nerd like me) is CurrentC’s clunky purchase process. It requires scanning QR codes, in many cases by both the merchant and the customer, and lacks the polish and single-tap convenience of Apple Pay. I’ve written (somewhat derisively) about QR codes before, but they live on in all their decades-old technological glory. If CurrentC’s only method of conducting transactions is going to be scanning QR codes, I can’t imagine that it will be a mass market success.

For the record, my money is on Apple Pay (literally – I put my reward Visa in there this weekend), but I don’t think Apple Pay will be the only player in this. I think the payment landscape will continue to be a messy one for years to come. There are just too many players with opposing goals, and far too much money at stake, for any of this to work out quickly and cleanly.


A version of this article also appeared in Identity Marketing magazine.

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Bringing Customers Back

Come back later! Many of you have explored online advertising, and some of you likely rely on it as a key part of your marketing initiatives. Whether you buy display ads locally or go all-out with pay-per-click advertising, you’re probably familiar with the benefits of online advertising. First, online advertising – especially on the pay-per-click side – offers precision that few other advertising formats can offer. If you want to reach a user searching for “pink foam stress reliever”, there is nothing more precise than online advertising, unless you’ve unearthed some mind-reading techniques that no one else has discovered.

Further, if you want to reach a content-oriented audience – let’s say you want to advertise on any website that is focused on high school football – you can do so using a “content network” strategy. The best online advertisers, of course, use a mix of all of these, tailored to the particular product or category they are advertising.

For instance, you might run display advertising on local news and business sites advertising your promotional and marketing services with a broad message. You might also advertise on sites for specific interests with a category of products – such as sports-related products like water bottles, flags and coolers on the aforementioned football-focused sites. Finally, you can advertise even narrower selections of products (or single products in some cases) to users who enter specific keywords into search engines – like the stress reliever examples above.

All of these are important strategies for the savvy online marketer, and they make even more sense if you are actively selling products online using an e-commerce shopping cart. But they don’t address the biggest problem plaguing any online advertising effort: getting users to come back to your site when they’ve left it without purchasing.

Why won’t they stay?

I’ve addressed the abandonment issue before; shopping cart abandonment rates average around 70% across all industries, which is a pretty terrible number. That means that less than a third of the people who put something in your online shopping cart will ever actually complete that purchase. Even more troubling are high bounce rates – when users come to your site and immediately leave. You can try dozens of techniques to keep them there, but ultimately there are a lot of tire kickers and “browsers” in the world, and you’re not going to get all of them. Even those visitors that don’t bounce immediately may stick around for a few minutes and then bail. It’s brutal out there.

Now, there are a few things you can do while you have visitors on your site to increase the likelihood that they’ll stick around and make a purchase. Live chat is probably the simplest and least expensive technology to interact with a visitor who might be wavering about a purchase or needs to ask a question. But you may not have the personnel to man live chat all day long, and while many visitors use live chat, some of them find it intrusive.

Optimizing your site’s landing pages – that is, the pages where users enter from searches and online ads – is another critical step in ensuring that users find what they want and stick around to buy it. But optimizing landing pages is a time-consuming and often frustrating process – you make a change, wait a while, and then look at the analytics to see if anything has improved. Split-testing (also called A/B testing, such as that available in Google Analytics) can make this process less cumbersome, but it doesn’t get you results any faster. It’s just something you have to do over time.

Where did they go?

Ultimately, you have to resign yourself to the reality that a sizable chunk of your visitors will leave your site without giving you much of anything – not a purchase, not an email address, nothing you can really use other than some measurable indications of when they left and from where they departed. But that doesn’t mean you can’t reach them once they’re gone.

Enter “remarketing”. Remarketing is a technology that raises the hackles of privacy advocates and might even provide a dose of the “creep factor” when you’re browsing around online. You’ve probably encountered it before – you went shopping at the Ford Motors web site for a new pickup truck, then a day or two later you notice that there are suddenly ads for Ford pickup trucks on a lot of the sites you visit.

The first time I encountered remarketing was many years ago; I was shopping for a new laptop bag from Timbuktu and left the site after not finding the one I wanted. A day later, I noticed while browsing news sites and technology blogs that I was seeing an awful lot of Timbuktu ads, and they all seemed to advertise the exact line of laptop bags that I had been looking for.

I was, quite frankly, a little creeped out by this. And I’m not the only one – plenty of web users who are very sensitive about their privacy take steps to block these ads, because the technology they use follows you around the web as you go from site to site. It can be a little unsettling to find out that you’re being watched.

But, as Facebook and Google have demonstrated time and time again, many web users will trade privacy for convenience, and the majority of users do not take aggressive steps to block this kind of technology. That means that it’s quite likely that the majority of visitors who leave your site can be reached later with advertising for your products and services. Best of all, this “remarketing” technology is now cheap to run and easy to implement.

How does it work?

Remarketing is devilishly simple: You add some code to your website, and the remarketing provider tracks your visitors by putting a cookie on their computer. When those users leave your site, the remarketing provider shows your ads on other websites that these users visit. You create the ads yourself and upload them (remarketing is most often done with display ads); and then enter where you’d like the users to go when they click. You can send them straight back to your home page or, if you’re a little more savvy, you might want to send them to a landing page geared specifically to what they were looking at when they first visited.

You can get even more precise than that if you have the time. Say a visitor shopped the T-shirts category of your website – if you so desire, you can show them a t-shirt ad. You can even give them offers that you wouldn’t normally advertise in your other campaigns; since they’ve already shown interest in your products, you might want to lure them back with a coupon that only gets shown in your remarketing ads.

How does all this work? Remarketing takes advantage of the massive amount of “inventory” online – that is, all the ad space sitting out there. Since a remarketing provider is showing an ad specific to a user, they (and ultimately, you) can pay a bit more for an impression than an advertiser who is showing the same ads to everyone else who visits that site. It’s a little more money for the site hosting the ad, a tiny bit of money for the remarketing company, and a higher likelihood that you get that click, since the user viewing the ad is already familiar with you.

Want to try it out? There are a number of remarketing companies out there; it’s built in to Google Adwords, but you have to enable it and set it up separately. Of the third-party providers; Adroll is my favorite, because of its simplicity and low cost, but you might want to look around if you’re going to give remarketing a try. You should – it’s inexpensive, easy to implement and gets results.

A version of this article also appeared in Identity Marketing magazine.

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Let’s Have a Little Fun

Having fun on a laptop

Your web site is an advanced piece of technology. Even if it’s a few years out of date, it’s still quite astonishing that information, products, videos, music and more are all at our fingertips on a daily basis. It’s easy to lose our sense of wonder about all this – just two decades ago, very little of what we now call the internet existed. Now, most of us depend on it at some level for social interaction, shopping, research, and business transactions, among many other things.

As that sense of wonder has slowly vanished, replaced by the workaday reality of checking your bank balance or ordering a pair of shoes, it’s worth remembering that there’s still a little bit of room for fun online – even on a buttoned-up e-commerce site. I’m not suggesting that you plaster your online store with cat videos. But it might not hurt to lighten up your presentation – a dose of character, properly administered, could give you the online personality to stand out from the crowd.

If this sounds trivial, it isn’t – if there’s one thing I hope you’ve learned from these columns over the years, it’s that uniqueness is one of the most important traits your website can have. Unique, original websites rank better than websites that substantially duplicate one another, and with promotional products and apparel, you’re competing with thousands of other sellers offering overlapping product selections. There are numerous strategies for making your content stand out, and many of them are labor-intensive and expensive. Injecting some fun into your website is cheap and easy, and you might even enjoy it. Why not give it a try?

If you’re stomping your feet, grousing about being a “serious business”, think about that for a minute: this is primarily a marketing business, and many of your customers are marketing professionals. They love fun. They want to know that you have at least a small creative bone in your body. Jazzing up your website with a touch of personality shows them your creative, entertaining side.

Beyond that, simple, bright, easy web sites are the norm these days. Years back, you decked out your web presence out in dark, serious, corporate colors to impress potential clients and show them that you were, you know, for real. These days, few people expect (or respect) that kind of presentation – we live in an app world, where attention spans are short, technology is back behind the scenes, and unique ideas and character get you eyeballs. Drop that dark maroon and stifling gray and get with the program – fun, open, simple web sites attract visitors and reflect well on your company.

Put a Face on it

Let’s start with the easy stuff. First, think about getting some people on your site. I don’t care if it’s a stock photo (as long as it isn’t that same blonde-haired call center operator that nearly every e-commerce site uses), just put a human being out there. For promotional products and apparel e-commerce sites, this action alone can make a big difference. Unlike buying a book or DVD, an ad specialty order can be an intimidating process, and visitors like to know that a human being is there to help them.

Want to take it to the next level? Put yourself and your employees out there! This is often a business of relationships, so why not just go out there and show people who you are? Smiling faces give visitors confidence that they’ll be taken care of. If your employees enjoy their jobs – if they have fun with it – get that out there! You don’t have to have them dancing in hula skirts and playing ukelele, but a happy face can help keep a visitor sticking around a little longer.

Add Local Flavor

It’s tempting for any online business to downplay their location – you want to be available everywhere, to everyone. For some businesses, if they’re big enough, talking about where you are or where you’re from doesn’t make much sense. But most small to medium-sized businesses will benefit more from talking about their location than simply trying to be a faceless juggernaut.

Why? Because of that uniqueness factor. Everyone is selling everywhere these days, so touting your “everywhereness” (and hiding your location) doesn’t really buy you much as a business – unless you’re huge. Instead, a touch of local flavor is a great way to make your content unique and give visitors a sense of who you are. You don’t have to make it a dominant feature of your web presence, but talking a little bit about the region or city you’re in in your blog posts or “About Us” section is a good start. Even better, tie it in with your employees and let them tell a little story about themselves!

Tell More Stories

This one may seem obvious, but your customers are often your best storytellers, and you should put them on your site. But it can be hard to get a good customer testimonial, which is why they’re often dry and uninteresting. So, go beyond the “Linda went above and beyond” pull quote and actually let them tell a story – let them have some fun.

If they don’t have a good story to tell, you can always make one up and ask for their permission. Just don’t think about testimonials as a stuffy, prove-how-professional-you-are endorsement. In face, so many testimonials read that way that they’re frequently ignored. A fun testimonial, on the other hand – say, a “here’s how Jill saved my bacon at a tradeshow” kind of story – shows that you solve real problems for real people.

Make it Move

It’s hard to overrate the value of videos on your site. They make content unique, offer a means of introducing yourself to your customers, and can even kick up a little bit of social media awareness for your company if they’re done right.

A great way to do them right is to have fun with them; product usage and demonstration videos are a fabulous place to start. If you’ve got a fun product, have some real fun with it – toss a stress ball around, hit the sidewalk outside with an umbrella, or go drive a few branded golf balls and talk about them. Remember, you tell stories about your company and your people with these videos, and if you make them fun, you not only give your visitors something to enjoy; you also show them your expertise.

How’s that? Well, when you handle something with comfort and aplomb, you appear as an expert. It’s the dry, nervous, overly formal presentation that drives viewers away. The more fun you can have with product videos, videos introducing your staff and anything else that you care to put out there, the better. Start your own Youtube channel (it takes a few seconds), get out your smartphone and start recording!

Finally, while social media sharing for e-commerce is a decidedly mixed bag, having a bit of fun with your web site increases your chances of getting noticed – videos get shared, stories get likes, and you begin to build up an online character that customers enjoy. Those social signals help with search engine ranking, as does the originality of your content – there’s really no downside. So loosen up that tie and inject a dash of fun into your site!

A version of this article also appeared in Identity Marketing magazine.

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