Industry Insight: The Future of Personalized Payments
How consumers pay for appurtenances and services changes all of the fourth dimension. Betwixt east-commerce and digital transactions, point-of-sale (POS) systems in brick-and-mortar retail, and the emergence of smartphone-enabled, contactless, and wearable payment methods, businesses are faced with an overwhelming array of choices when information technology comes to methods to back up and date programs in which to invest.
That middle ground is where Rittenhouse Payment Solutions (RPS) lives. RPS is an all-in-i, customizable software platform for businesses that provides payments, rewards, loyalty and coupon programs, ticketing, access, and promotions. RPS is a business-to-business (B2B) solution that works between businesses and the POS systems, credit carte du jour processing services, and other payment providers to which they're connecting. The company's goal is to automate marketing and operations, facilitate transactions, and assemble a whole lot of consumer behavior and purchase data in the process. The company aims to do all of this while giving consumers choice and a expressionless-simple user experience (UX).
RPS CEO Todd Wrubel recently visited PCMag's New York Urban center office. Wrubel is a veteran in the credit space who has worked at Sears Fiscal, Citibank, and payment processor Comdata before founding RPS. His company at present powers branded payments experiences for customers including the Amend Business Agency (BBB), NASCAR, and numerous startups. We saturday down with Wrubel to discuss how their platform works, trends and fads in the payments infinite, and how payments are evolving to become more targeted and personalized despite the constant proliferation of new payment methods and technology.
PCMag: How does the Rittenhouse Payments platform work?
Todd Wrubel (TW): We do B2B. And what nosotros offering is, hither'south a platform and so literally a carte of all the things you can do with information technology. Then, here are APIs [application programming interfaces] to build onto it. Here'due south how nosotros can take your branding or your value and place it into in that location. So our rule is always that we're happy to exist in the background. Nosotros want that branding to be upfront. We desire you to discover a channel that maybe we don't know most. We've got people that come up to us saying, "Nosotros didn't know that channel existed, that's a great avenue to go through." So that's what nosotros facilitate.
Another example with the engagement office of it is: savings accounts attached to these kinds of programs. And then, imagine a kid is doing his chores, trying to salvage money for something. Well, instead of only handing in the money and trapping it, the system can track the chores and the money you lot're earning, your mother tin approve it and say "yep" or "no," see a picture earlier and after, then swipe, say "okay," and fund something. In that location is depth to the ecosystem, and people forget that, once you have certain rails available to yous, like a MasterCard or a Visa, there are so many ways to apply this technology.
PCMag: Even so, that depth is only feasible for the market place if you provide that simplicity on the other cease of it.
TW: You have to. Yous have to give them something that'south easy to sympathise and is not daunting like a credit menu or a large bank. Brand it fun. It could be loyalty, which could be a part of something that becomes kind of a Trojan horse to get you to the payments side, that drags you over to offset using this service and making purchases.
PCMag: Rittenhouse is all about enabling different payment methods and facilitating transactions. Simply how would you lot distinguish that idea of enabling versus upselling?
TW: That's a great bespeak. Nosotros want to enable payments, transactions, and loyalty. But we want to apply the B2B focus to say, "Here are the channels and here's why it'south valuable." You lot tin can take a actually great channel and say, "I don't accept the money to build in-house payments or pull this all together. How do I do this?" Information technology's not worth it; you put yourself in a hole. What we're saying is, "Hither'due south the box. Now allow's attach all these things to it and hither, information technology becomes your programme." Go on people engaged that way. Say hither's your plan, here'southward your channel, enable it.
Nosotros've taken things outside the bill of fare infinite. Debit cards are groovy, prepaid is groovy, but can you use the technology and connect it with security and access? Is it possible to go to an event and accept a wristband, a sticker, a wear, and take it connect with admission, security, and payments all in one? Yes.
Can you load funds and share them with another account person-to-person [P2P]? We can do that near, nosotros tin can exercise information technology with bracelets, cards, even by apps. Family programs are condign less of a fad and more than important equally well. Encouraging smart spending, talking with children about what it means to accept money versus giving them money. Even ticket purchasing: ticketing, seats, all of that can be on a wearable; it can be a prepaid program and everyone can sit together for an event.
We're talking well-nigh cash back. We're talking nearly your typical signature purchasing or tapping and going. Digital offers are another. What I mean past that is, there are tons of offers out in that location and places you can go coupons. Only what if you lot could do something that'south real-fourth dimension? Yous get 10 percentage off when you shop here or there. Y'all can tap your phone or wearable with a bit in it, and get a discount right then and in that location. That'due south the stuff people want. I call up the coupon world has non come and gone, but everyone has a version of it and a large box way to get to information technology. So, five per centum off at Target is 5 percentage off; all these other brands can do, too.
PCMag: What nigh edifice in personalization into all of these offers?
TW: That'south where this all ends up. Now there's information, all this stuff I saw you do. How practise I utilise that purchase behavior and start targeting you in the style that you want? We always recommend to clients to have the ability to plough that on and off. You don't want to upset people with another offer for coffee. They had some today and they go three more offers for coffee. We want to tailor information technology that fashion, too, so information technology doesn't overburden people with information.
It'southward all automated, but in the transaction space, you're getting a lot of data. Nosotros're creating an business relationship for you lot and you're running transactions through it. We are seeing transaction data—an offer, a disbelieve, so the lift—we would meet that, oh, yous did get 10 percent off merely yous were spending 30 percent more. On our side of the contend, we call that "driving aspirational spending." That's where gift cards used to be. I give you a $100 gift bill of fare to All-time Buy and then you go in and spend $250.
What we've done also is say, "Let'due south become out of the souvenir carte model. Why don't we have something that'southward reusable and can be reloaded?" If grandma wants to send you $xx, send it to this account. That's your gift card at present. You don't ever have to go get a new slice of plastic. Now you can take an account that can be used with Visa and MasterCard, those acceptance marks, without merely having to use information technology at Best Buy. Then you start targeting people with offers, promotions, data; starting to facilitate a full transaction.
PCMag: Security is also a huge concern, especially when you lot're centralizing all of this information. How do you tackle that increasing complexity?
TW: Security is paramount, especially data security given what only happened with Equifax. When you lot're setting upwards an account, we are sourcing processors and issuing banks that accept built-in capabilities for security, compliance—all those good things. At that place's a reason nosotros do that. In the outset, my first thought was, "I have to exist a processor. I take to own it all end-to-terminate." Well, then you exercise the numbers. You realize, "Am I really making that much coin per transaction? Are in that location other things that accept been invented that I tin tack onto and kickoff building off?"
So, that's why this is very secure. Because nosotros're using those backbones. So, when at that place's a compliance issue, when at that place's an issuing problem, we have those sources already lined upwards and all that security is handled. Now, when there is an issue, allow'south say someone stole my identity or my card, this is MasterCard and Visa. It still goes back to those aught liability rules. And, if y'all can bear witness this is not you, the safeguards are in that location.
Signing upwardly when you're talking well-nigh prepaid is different than the credit side of things. There are ways for you to use it as a tool for your payroll and have information technology loaded. You lot're going to have social security numbers and all that stuff. There are other ways that, if you exercise incentives, y'all don't need those things. There are means to blend it so that you lot're either fully secure or it'due south a i-off program. Then, to become back to ticketing, you don't need to put a whole lot of information in there unless you lot want to.
PCMag: That'southward been 1 of the exacerbating factors in a lot of these breaches. Companies are collecting far more personally identifiable data (PII) than they need. How practise you tread that line?
TW: In most cases, I don't want a lot of this information sitting around. We don't agree onto social security numbers. We don't hold onto a lot of data. That is done in systems dissever from u.s.. That's why we have linkage to all these processors and issuing banks. They're fix up in a PCI way to handle these sorts of things. Nosotros care non to store this kind of data. When it comes to customer service and things like your business relationship number, we won't validate unless we have to and, if we do, it'due south outsourced. We don't want to validate internally and take liability anywhere with anyone's information.
PCMag: Rittenhouse occupies a unique position in the payments space, where y'all operate in the middle of a lot of unlike parties. Given this perspective, I want to break downwardly a couple of trends nosotros're seeing now in the payments space and get a litmus test on whether the trend has staying ability. Permit's get-go with RFID and wearables.
TW: Wearables are going to grow; they're going to thing but merely in the way that their utility can exist used conveniently. You're not going to employ a bracelet at a bar or a eating house and tap your arm to pay for dinner or a potable. There'southward always going to be a payment method involved linked to a carte or plastic. If they do take a phone and yous can tap and pay, that'southward different.
At present, if I'yard out jogging or something and don't have my wallet, there it makes perfect sense. Wearables also matter for clients when nosotros're working with ticketing. You're going to a show or an effect, and you have your payment and your identity linked into a wearable; that makes sense. Call up about even somewhere similar the VA [veteran's affairs] of all places. They could utilise this immensely because they practise pay people to come up back and forth for checkups. A lot of these people are homeless and don't take places where those checks go to. You lot tin literally have the money sent to them where information technology'southward on a clothing or sticker, and they can go pay for transit and things like that. That power is I remember where wearables piece of work situationally.
PCMag: What other payment trends accept you seen an uptick in or what fads have y'all observed that are starting to fizzle out?
TW: In general, from a payments and spend perspective, credit is on the downturn. It ever has been dripping but now it'due south going downward. Millennials, kids that have the ability to take payments now and go money here and there, credit is not cool. It just isn't. If you've been through any financial trouble in your family unit and you lot're hearing about credit carte du jour bills, it has a taint to it.
Having a debit carte du jour is always hot. However, year-over-year growth, prepaid debit has gone through the roof. People like that control. I'm getting my value put on here, I'm using it for these circumstances, I'thousand laying out. Here's my slush fund for this, here's my fund for that. We phone call it multi-pursing. I've got a handbag for everything I do. You can say I'm loading this much to my prepaid credit or debit card account, and beginning to utilise this every bit a budgeting tool.
That's the other cool factor. You lot get out of this cycle of paying at the cease of the month and now you've got one tool, one mode to justify your payments, and one identify to look at it. In credit, we used to call it the Hangover Effect. "Oh, that was such a fun weekend. I bought this, I bought that" and and so you get your pecker and say, "Who the heck bought all of this?" With prepaid, that'south gone. You get a text message saying here's what you merely spent and here's your balance.
PCMag: Finally, in looking at payments trends, what are your thoughts on the mainstream viability of cryptocurrencies?
TW: We have clients doing prepaid programs with u.s.a. that want to catechumen Bitcoin and cash out onto a wallet or exchange. I like the idea of information technology. But, for the general population, information technology'south going to take a very long fourth dimension. It's hard enough to get people out of cash. Moving people from cash to plastic in the 60s, 70s, and 80s was a huge deal. Things similar loyalty points didn't catch on until the 90s or later on. With Bitcoin and cryptocurrencies, it'southward tough to explain it to people because, if it'southward not in your pocket, people don't feel like it's real.
PCMag: Looking at the bigger picture, how exercise you lot come across payments evolving in both the curt term and longer term?
TW: Payments in the brusk term is going to exist all almost convenience. What's in front end of you, what's not going to slow a purchase? What tin I do to trigger decisions and buy something? I proceed going dorsum to you lot're in line at a grocery story. Those last purchases at the end. "Why do I need this? Whatever, I'll buy information technology." Done. That's what we need with payments at present, and that means thinking about what device you're using. Apple Pay has not been equally successful every bit they hoped.
PCMag: Then, what'south the tech solution for the impulse buy?
TW: I remember that's when you have a sponsor that's already provided you lot with something every bit a effect of loyalty. I get $10 back on my wear and I don't take to use it only at Walgreens or CVS. I can become buy gas or gum or whatsoever. That'due south where the impulse buy will come up in considering it feels like gratis money. I worry well-nigh Apple tree Pay and Samsung Pay because people are still non focused on their phones for the whole payment procedure; they get nervous about it. Having something in your wallet or in your pocket like a clothing somehow disconnects them from that.
From a time to come standpoint, I think you could wind upward having one account. Underneath that parent account are all the sub-purses, if you lot will, that volition trigger your purchase behavior from there. In that location might even be credit nether there, only there's one master account and you lot'll claw in all these things that you lot pick. So yous can say under this, I desire my Citi debit menu, and over here is credit, and here is prepaid. And when you brand a buy, you can choose how you want to pay. From there, you lot could do things like claw information technology into your QuickBooks and it becomes your ain ledger. I recall that kind of mass personalization is where payments will end up.
About Rob Marvin
Source: https://sea.pcmag.com/feature/17625/industry-insight-the-future-of-personalized-payments
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