Feb 16, 2006

A new and fresh advertising theme: the payment experience

What impact does an enhanced payment experience have on advertising?

Today, all banks advertise the same “old way to pay” features. The same low rates and no annual fees, free sign-up gifts, protection against lost or stolen cards, purchase protection, extended warranties, theft protection, and numerous other features which all banks are able to offer. You almost never see a card being used at the moment of payment, which is nevertheless the main, if not only, purpose for which the card exists. Today’s payment experience is just too dull and boring. Try asking your advertising agency to do an ad showing a customer paying at a POS terminal – they’ll probably think you’ve gone crazy.

When the payment experience is new and different, bank card advertisements can focus on a fresh new theme, the experience the customer enjoys when using the card to pay. For example, click here to see an ad from Chase, for their Blink contactless card. Or click here to access the ad directly.

The Chase Blink ad shows customers enjoying a fresh, new payment experience, thanks to the card’s contactless feature. Customers are seen buying a burger, buying a movie ticket and buying groceries. “Blink a burger. Blink a movie. Blink a bagful.”

The ad’s promise is clear and simple. “Introducing Blink. The newest thing in credit cards. It’s built right into your new Chase card. Just one quick flash of your card … and you’ve paid. No more lines. No more fumbling. Fast, easy and safe. Blink. Only from Chase.”

All of a sudden, we are back at the heart of payment, with a new feature that is central to the card’s payment purpose, as opposed to all the other bank ads that focus simply on low price, free sign-up gifts and non-payment features like extended warranties and purchase protection. The energy and visual creativity in the ad shows that the advertising agency was excited about this one.

I see this as an early attempt at enhancing the payment experience, and I see the excitement around contactless as an indication that banks feel a deep need to re-invent the payment function to make it fresh, new and relevant to modern consumers.

However, contactless in and of itself will not deliver the benefits promised in the ad. One of the major benefits, no more lines, will be particularly difficult to achieve. Chase’s 6 million Blink cards represent well under 1% of all credit and debit cards in the US. For the foreseeable future, most of the people standing in the queue in front of you will be paying by cash, cheques and traditional bank cards. Unless most people stop using cash and cheques, and most banks convert their cards to contactless cards like Blink, shaving a few seconds off of a few transactions here and there will not have a noticeable impact on the size of the queue.

Shorter queues may be achieved faster if the signature is not required for any transaction under $25, regardless of whether the card is contactless or not. This is something Visa is promoting strongly in the US (see Accelerating card acceptance at cash-heavy retailers).

The main benefit of fast transactions is achieved by eliminating the need to sign a receipt for low value purchases. Knowing this, the ad’s promise of speeding up grocery purchases doesn’t make sense. When was the last time you spent less than $25 at the grocery store? It is not clear how a Blink card will work for a normal grocery purchase of over $25. Will you tap the card then sign the receipt? If you sign the receipt, do you then have to hand the card over to the cashier so your signature can be checked? Will you tap the card only to learn that it has to be swiped instead? Blink really makes sense in retail outlets where the transaction is almost always well under $25. Concession stands at sports arenas. The drive through lane at a fast food outlet. Coffee stands in an office lobby. Stretching Blink into other formats like grocery will only cause confusion.

Banks are clearly searching for ways to re-invent their payment cards. It’s about time we focused on enhancing the customer’s payment experience, something that hasn’t changed in several decades. This is becoming increasingly vital as banks are under more and more pressure from merchant associations and government authorities to reduce the fees they charge merchants for a payment product which is seen as a pure commodity with little incremental benefit to merchants.

I’ll try to do a similar post on branding, hopefully in the next few days.

Check out other ads that focus on the payment experience in the media section of Welcome’s website.

Prior posts on contactless cards:
Addressing contactless security concerns
Contactless opportunities and challenges
Accelerating card acceptance at cash-heavy retailers

Prior posts on the importance of enhancing the payment experience:
Protecting interchange fees: what alternatives to litigation?
Key success factor #1: Focus on enhancing the payment experience
Key success factor #4: Show merchants how your payment brand can help solve major problems
Finding hidden revenue in electronic payments data
A preferred checkout experience
A preferred checkout experience, part 2
Payment services that are irresistible, not just nice-to-have
Customer experience market research
Why is enhancing the payment experience so important?

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