Square and Navy Credit Union win September TV advertising

Television commercials will always have a special place in our hearts. From the Super Bowl to media awards ceremonies like the Oscars and Emmy’s, companies fight to get their ads in front of their target audience, paying a pretty penny along the way. Banks and credit card companies are no different, spending millions of dollars a month on commercial spots.

In the month of September, 33 bank and card brands spent $133.5 million on 132 spots that ran over 30 thousand times. Some of the biggest spenders included JP Morgan, Capital One, and Citi.

The theory goes that the more money you throw at advertising, the more people see your product and buy it. So it would make sense that those who spent the most money or had the most ads got the most impressions, while outliers should be noted.

Here is the list of September’s top 10 impressions for banks and credit card companies, gathered by Fabric Media:


Square and Navy Credit Union stand out in the list of incumbents as small players sitting at the big kids table. Smaller players like Square and Navy Credit Union need to come up with better strategies in order to gain impressions with competitors that can spend tens of millions of dollars a month on ad spending and not blink about it.

Square found itself in the top 10 with more impressions than MasterCard while spending a fifth of the cash. Square’s strategy seems to have been to use the debate to get the most bang for its buck. Around 40% of placements were during primetime, and most ads ran on Fox News, CNN, and Spike.

“It’s definitely unusual for Square to be in the top 10 of impressions; they don’t appear on the leader board at all other than in September,” said Jon Capetta, entertainment specialist for Fabric Media. “In fact, they’ve only spent about $10.5 million all year.”

Square had two ads, each one pitching its new credit card reader, standard fee structure, and faster deposits.

Navy Credit Union was also low in terms of relative spending and had only a total of 47 ad airings during the month. Its marketing campaign was directed at turning solders into real people who can access specialized financial services by using the credit union.

The strategy was similar to Square, optioning to have ads during NFL games. Navy Credit Union may be a niche market provider, but it’s been gaining in impressions over the past few months.
“This is their first time Navy Credit Union was in the top 10 of impressions through the summer, but they have been increasing their ranks steadily so will be interesting to watch for next month for sure,” said Capetta.

Wells Fargo planned to air an ad on special benefits when opening up an account with them, but decided to pull it in the end.

Hurry up and wait: Chip and PIN payment technology in the US

emv stalls in the US

U.S. retailers are increasingly unhappy with how the adoption of so-called chip and PIN credit cards is playing out in the market, and it’s not simply because the uptake has been slow. It’s because retailers feel the card companies themselves, worried about competition and profits, haven’t actually been encouraging the use of PINs, which allows for the most secure processing of card payments.

Last month Walmart, the largest U.S. big-box chain, sued Visa for allowing customers to simply sign their names rather than enter PIN numbers when using a microchip-enabled debit card.

In its lawsuit, Walmart says that by not requiring those using chip-enabled debit cards to enter a PIN, Visa, the largest issuer of credit cards in the United States, is robbing customers of added security. Walmart also accuses Visa of taking financial advantage of merchants, as transactions processed via signature often have a higher fee than those processed via PIN code, according to media reports.

Retailers have invested in chip technology

Walmart’s concerns are felt by merchants across the board, especially after they have invested in the new equipment required to read the chip cards. The Merchant Advisory Group, a trade organization that represents large U.S. merchants and is dedicated to improving the payments field, recently asked federal auditors to look into the legality of card-issuers, including Visa, of not requiring PINs for purchases made with chip-enabled debit cards.

“Merchants want issuers to enable PINs on all financial products because they are a form of multi-factor authentication that only the account-holder knows, and that ultimately helps prevent against fraudulent transactions,” said Liz Garner, vice president of the Merchant Advisory Group. “Not having a PIN associated with a card or an account would be like asking someone to sign into their email with just their email account and no password.”

Chip and PIN credit cards, also called EMV cards, which have been in use in Europe for a decade and a half are still relatively new in the U.S. market, which only began switching to the model last year, when new regulations shifted the liability for fraud damages to the party with the lowest level of security technology, whether that be the merchant or bank.

How chip and PIN works

In addition to the traditional magnetic strip across the back, the cards contain a small, embedded metallic-looking microchip, which can be read by a special machine. To complete the purchase, customers must also input a four-digit PIN or sign their name while the card is being read. The chip is more secure than the magnetic strip because it allows information to be encrypted and less accessible to hackers. The PIN then adds another layer of security.

According to the U.S. Federal Reserve, chip transactions accompanied by a PIN are seven times more secure than those processed with a signature.

The Retail Industry Leaders Association, another trade group representing merchants, is also pushing for the required use of PINs, calling the use of chip-and-signature cards “a half step.”

The pressure seems to be up on card companies, with the CEO of Discover Card stating at a conference in May, days after Walmart sued Visa, that the card-issuer would consider requiring PINs, even though its website currently states there is “no PIN required except at ATMs.”

A slow rollout

While most European and Asian markets almost always require PINs, the EMV chip system was designed to be flexible, according to each region’s needs, leaving it to regulators and market forces to decide if signatures or PINs should be required.

“The EMV Chip Specifications provide a comprehensive toolbox to help payment networks and other industry participants throughout the world,” Sarah Jones, a spokeswoman for EMVCo, an organization made up of six major credit card companies, including Visa and MasterCard, to facilitate worldwide acceptance of secure payment transactions, wrote in an email. “The specifications are designed to be flexible and can be adapted regionally to meet national payment network requirements and accommodate local market needs.”

EMVCo. is not involved in setting policies about whether PINs should be required, Jones wrote.

Other concerns about the change-over to such cards include the fact that most people have not even upgraded to these cards, and questions linger about their ultimate relevance in a world where mobile phone payments may be just around the corner to becoming mainstream.

Only 1% of card transactions in the United States in 2015 were with chips, compared to 97% of transactions in Europe, according to EMVCo., an industry organization comprised of credit card and other payment companies. And only 37% of merchants in the United States have purchased the equipment to process the cards, according to a survey by The Strawhecker Group.

The U.S. market accounts for about half of all credit fraud, and this is mainly due to the lack of chip-enabled cards in the market there, according to the Nilson Report, a trade newsletter covering the payments industry.

Competing technologies

The change-over to chip cards also comes at a time of increased volatility in the sector, with new mobile and contactless payment methods being introduced. So in addition to the migration to chip and PIN, credit card companies are occupied with figuring out whether these new systems are threats or opportunities, and are investing heavily in developing their own innovation, according to analysts.

“The next five years are likely to see rapid changes in the nature of the payment business as cards are slowly replaced by electronic payment methods,” Jim Sinegal, an analyst at Morningstar Equity Research wrote in a recent report on Visa.

But the adoption of these mobile and other alternative pay systems has been slow, with cards still remaining the most common way to pay. Because of this, and the rising stakes in preventing fraud, merchants say the use of PINs in place of signatures is more important than ever, and they would like banks and credit card companies to work harder to increase the use of PINs.

“At the end of the day, a transaction where a PIN is entered is way more secure than signature,” Garner said. “And if Walmart or any other retailer wants to require a customer to enter a PIN when it’s available on the card, they should be able to do so as it will help mitigate overall fraud in the system.”

Photo credit: Miradortigre via Visualhunt / CC BY-NC

How MasterCard Labs fosters a culture of payments innovation

Mastercard Labs fosters a culture of innovation

Selfies that authorize credit cards, laundromat washing machines that call when they’re free and distributing food assistance in Africa by debit card are all steps on the path toward one common goal, according to MasterCard CEO, Ajay Banga.

“Our vision is a world beyond cash,” Banga explained in a recent interview at the Stanford Graduate School of Business. “85% of the world’s retail transactions are cash and check. Only 15% are electronic.”

To realize that vision, Banga has transformed MasterCard over the last five years by making technology and innovation critical to MasterCard’s identity, and the results are paying off.

Banga, an Indian Sikh who wears a black turban, was previously the Chief Operating Officer at Citibank, a protege of banking mogul Sandy Weill’s, and was being groomed as a potential CEO. But he chose to leave all that behind for a different kind of job:

Citibank had 290,000 — 300,000 employees around when I was leaving. And at a point of time, 200,000 of them used to work for me. And it’s impossible to make change with 200,000 people in your 3, 4, 5 year span. But if you’ve got 5,000, 2,000, 10,000, 15,000 people working for you, you can touch them, feel them, put your arms around them, they know who you are, they can understand you, you can make a difference. You can actually change things in that company. […] [W]hen I joined MasterCard, we had 9% of our population was millennials. It’s now four and a half years later, we closed last year with 34% from millennials. I could never have done that at Citi. I just could not.

Banga has made innovation a priority by forming MasterCard Labs as a center for developing new technologies that reports directly to him. Banga approves the division’s overall budget himself, but doesn’t provide any oversight. “So I told them, here’s the money, you choose the projects. I need commercially viable two products after two years. If I don’t, I’ll fire the whole lot of you and start again.”

At Work at MasterCard’s NYC Technology Hub
At Work at MasterCard’s NYC Technology Hub

One example of using technology to push the boundaries of existing payments is MasterCard’s Identity Check mobile app, which uses selfies as a form of biometric identification. The app addresses the problem that people typically choose weak passwords for authenticating online payments.  As reported in The Verge, users will have to actually blink while taking their pictures to prove that they are not merely presenting a photograph, and MasterCard algorithms can detect the use of video.

Groceries by MasterCard
Groceries by MasterCard

MasterCard is also working with established businesses to develop new products and services. The company partnered with Whirlpool to create an app called Clothespin that helps washing machines and dryers tell customers when machines become available and operate without the use of piles of quarters. Working with Samsung, Groceries by MasterCard is another project of MasterCard Labs that integrates a program within the “family hub” refrigerator. Groceries will learn family shopping habits and “suggest” re-stocking and new products. Over the last five years, the company has worked with partners such as the World Food Program to distribute aid to the poor in developing countries, and recently they’ve given cards to Syrian refugees.

Innovators at MasterCard Labs are also turning to the creative community for a source of ideas outside of the kinds of workshops and hack-a-thons designed to generate ideas from engineers and programmers. This weekend, MasterCard Labs will host its first “Fashion and Design Hack” with students from the New School’s Parsons School of Design. MasterCard executive Sherry Hammond explained to Finextra that the company wants to, “integrate design-led thinking into payments innovation and tap into the creativity and ingenuity of the school’s design students.”

MasterCard Labs executive John Sheldon recently told Fast Company that his division’s job is “looking ahead three to five years, taking risks, failing smart, quick, cheap, and learning something along the way.” MasterCard Labs strives to “be the company’s own disrupter,” hosting 48-hour “Innovation Express” events to create new products such as the pre-payment and ordering app Qkr, which has been taken up everywhere from Yankee Stadium to restaurants all over the US to school lunch programs in Australia. Despite all his team has accomplished, one challenge remains for Sheldon, “I also want to solve for giving the tip to the guy at the garage who brought my car back without a scratch – because it represents the barrier between where we are now and the cashless society we envision.”

MasterCard’s commitment to innovation seems to be paying off for investors, too.  The company’s share price is up over 250% over the last five years.

photos courtesy of MasterCard

5 trends we’re watching this week

5 trends in finance this week

[alert type=yellow ]Every week at Tradestreaming, we’re tracking and analyzing the top trends impacting the finance industry. The following is a list of important things going on we think are worth paying attention to. For more in depth trendfollowing, subscribe to Tradestreaming’s newsletters .[/alert]

  1. Oscar Health raises $400m, said to be valued at $2.7b in Fidelity-led round (Bloomberg)
    Health insurance startup, Oscar Health was valued at $2.7 billion in the startup’s latest round of funding, according to a person familiar with the matter. That’s about $1 billion more than when the health insurer raised funds in September. In the latest round, the company said it took in $400 million from backers led by Fidelity Investments.
  2. Oops, Vanguard sent 71 account emails to wrong investor (TheStreet)
    The tweet by a Vanguard Group customer went out on the morning of Feb. 11.
    “Just got 77 e-mails from @Vanguard_Group detailing how much money people withdrew from their accounts along with names,” he wrote. “Yay security.”
    With the rising sophistication in hackers targeting global financial systems, it’s kind of disappointing to see such an established player like Vanguard making such rookie mistakes.
  3. Should roboadvisors be regulated like investment companies? (Michael Kitces)
    Ultimately, then, the question of whether robo-advisors are in violation of Rule 3a-4 really highlights a broader question of whether any investment adviser that heavily leverages technology to standardize their investment process is coming too dangerously close to mimicking an investment company.
  4. How Curve is changing the nature of physical credit cards (Tradestreaming)
    The way we use credit cards is changing and many of the solutions, like UK-based Curve, are hardware/software hybrids. But much of the technology-enabled change doesn’t require major changes from a user’s point of view.
  5. Jon Steinberg launches ‘CNBC for Millennials’, Cheddar (Business Insider)
    Jon Steinberg, former president of BuzzFeed and CEO of Daily Mail US, is launching a startup called Cheddar. Steinberg is focused on attracting a smaller, savvier audience — business-minded millennials. Cheddar will stream one to two hours of live content every day, primarily from the NYSE trading floor, and distribute them across the web on platforms like YouTube.

How Curve is changing the nature of physical credit cards

curve credit card

The days of thumbing through your wallet, trying to figure out which credit card you want to use are nearing an end. That time is coming quickly if Curve takes off. It’s a new super credit card that’s a lifesaver for people who use many credit cards.

Curve uses its smartphone app to essentially lift the information stored on various credit cards. It then transfers this information to its own single Curve card. The result is a software/hardware hybrid that gives Curve users the choice of which card they’d like to use at the point of purchase without the need to carry multiple cards. Holders of the Curve card just choose which underlying credit card they’d like to use via the app and present their Curve card.

If you carry a card that isn’t accepted as broadly as some other cards, like Amex, Curve improves your acceptance rate. The Curve card is a prepaid MasterCard and consequently, even if your underlying card is Amex, it’s accepted anywhere MasterCard is accepted. The app is designed to help Curve holders track their various purchases and loyalty points across multiple cards.

Curve also boasts that it doesn’t charge any currency conversion fees — card holders only pay the MasterCard wholesale rate + 1%, a relatively low rate according to the LA Times Currency Exchange study.

Curve all-in-one credit card
Curve all-in-one credit card

Curve joins a group of credit and banking offerings that sit on top of existing financial technology infrastructure. It provides a new interface for users to use to connect to their accounts and cards. And with its app tie-in, it provides a user experience that captures much of the traditional interaction between consumers and their financial institutions. Solutions like Curve and all-in-one credit card competitors Coin and Stratos aren’t competing as substitutes to existing financial products — they’re complements that aim to make the existing banking and credit ecosystems easier and more enjoyable to work for today’s demanding consumers who are want their financial apps to be as easy-to-use as the ones they use to travel, order a cab, and go shopping.

“We’re not another new bank or extra service to deal with, we transform your existing fragmented financial world into somewhere crystal clear, designed for the user,” Curve founder, Shachar Bialick told VentureBeat. “Mobile payments have the potential to bring similar benefits, but cards work everywhere and people are used to them. So we’ve created the best of both worlds — all the benefits of mobile payments via a groundbreaking card.”

Bialick believes users will be more likely to adopt his solution versus other options on the market. And it’s precisely because of its old school/new school aspect that users may find it appealing — Curve’s sole product at this point is a physical card. It looks, smells, and feels like the other cards in your wallet. But while competitive offerings look like credit cards, Coin and Stratos are both battery-powered bluetooth devices that tether to mobile phones; Curve is a standalone credit card and can be used without its accompanying app.

London-based Curve first made waves when, in stealth mode, it closed an investment round that included Taavet Hinrikus, co-founder of money transfer startup TransferWise, Ricky Knox of challenger bank Tandem, Ed Wray of Betfair, and former members of the Google Wallet team.

Photo credit: orphanjones via Visual Hunt / CC BY

Wallaby optimizes loyalty points by making personalized credit card recommendations

Matthew Goldman, Wallaby

Wallaby bills itself as an intelligent every day spending assistant. The app, available on both iOS and Android, recommends which credit cards users should hold in their wallets to maximize loyalty point accumulation. It also makes recommendations as to which credit card a user should use on specific purchases.

Matthew Goldman, CEO of Wallaby, joins Tradestreaming to talk about how users are maximizing their loyalty points by using Wallaby, how credit cards can be used responsibly to save money and provide smart buyer protection, and where Wallaby is taking its product in 2016.

What is Wallaby? What’s the genesis story — where did the idea for the app come from?

Matthew Goldman, Wallby
CEO of Wallaby, Matthew Goldman

I’ve always traveled extensively for business – as much as four nights a week, every week. With all of the business travel, I became interested in optimizing my travel points and acquired a few cards. One day in early 2011, after landing at the Burbank airport following a business trip, I stopped at a gas station to fill my tank. I swiped my preferred card (SPG) and then the gas pump TV came on and advertised that if I had the Chase Freedom card, I would be able to earn 5% cash back. I did have the Chase Freedom card – it was in my wallet; I had forgotten about the rewards. I figured there had to be a better way to keep track.

How are people inefficient when it comes to maximizing their credit cards (examples)?

People are inefficient in many ways. From a rewards perspective, people often forget about changing categories, such as Chase Freedom and Discover it, which have different categories each quarter. People also forget about ongoing earnings. For instance, if rarely go to a drug store, but have a card with that drug store, you get bonus earnings.

In addition, people often don’t know the true value of a particular point. Wallaby calculates its actual value to understand that five Hilton Points may be worth less than three American Airlines miles and recommend cards based on that. People not only use their cards wrong, but they also rarely have the RIGHT cards in their wallet to begin with.

How does Wallaby make its users more efficient?

We understand your goals: maximizing rewards, minimizing interest, optimizing cash flow. We track your balances, spend limits, rewards and more. This way we can do the math for you and boil it down to a simple “just use this card” so you don’t have to track so many factors. It’s fast and simple and requires a one-time setup.wallaby-wallet-diagram

There’s been pushback on credit cards — why are they smart financial tools for consumers?

Credit cards are smart when you always pay on time and don’t use them to overspend. They provide incremental short-term cash when you really need it. When you don’t immediately need cash, they can save you money and provide protections. Cards enable you to be protected by warranty extensions, travel insurance, roadside assistance and more.  They also build credit, which is important to save you money on bigger purchases like auto loans and mortgages.

Can you really get more without spending more?

See above, but a card has many legal and product protections and amenities just for carrying it (free wifi, hotel status, etc.) that don’t require you to spend more money.

Where are you headed with the product? What does the future have in store for Wallaby?

This year we expanded our capabilities around more than just maximizing rewards or making the app smarter, to provide background alerts at the right time so you don’t even have to remember to open the app. Next year, we’re going to expand our capabilities around more financial services products and improve the ways we help you manage your loyalty points.