Customer Self-Service in Payments: It’s Time Has Come


Ron Mazursky

Founder and Board Member, NYPAY and

Director of Strategic Initiatives, Jack Henry & Associates

Data breaches, which lead to the theft of credit and debit card account numbers, have continued to impact consumers. Fraudsters have demonstrated increasing sophistication that enable identity and payment card theft. Fraud at point of purchase with both card present and growing card not present transactions is growing.

This sets the stage. It is inevitable. Consumers will ultimately demand control. Consumers desire the ability to decide when, where and how they spend, they save, and how to protect themselves and their family.

In the US, the need to take control of savings and spending was seen more prominently in 2008 – the beginning of the Great Recession. We saw consumers begin to change their savings and spending patterns. Debit became the preferred way to pay because of the control it afforded the consumer. They started to reduce their usage of credit and began to spend their own money in their DDA account. Debit card ownership grew, as did debit card usage. This behavior change was all about control. Consumer control.

In 2013 another turning point was upon us. Merchant data breaches started to occur in rapid succession. Consumers found their debit and credit cards compromised. Financial institutions (FIs) faced growing counterfeit fraud as well as card not present (eCommerce) fraud. FIs fought this fraud with software tools such as Falcon, as well as the closing of potentially compromised accounts through the very expensive re-issuance of plastic. Other tools have come to market – as a result of consumer demand, financial institution demand, technological advances and the environment.

A combination of vendors, financial institutions and processors saw the need to build an on/off authorization switch for card transactions. In 2014 such companies as Ondot Systems, First Performance Corp., FICO, World PassKey, Tranwall (S. Africa), LockByMobile (Singapore) and others created mobile card control functionality. Processors, such as Vantiv, FIS, and Fiserv have come on strong offering similar capabilities to their community banks and credit unions.

In industry research, 40%-50% of consumers have said they want their debit and credit card issuing financial institutions to provide mobile card controls on their smartphones. These controls operate on mobile apps that enable the consumer to control their debit or credit cards by turning off various payment functionality – like one would turn on or off their TV sets.

Besides a simple on/off switch, various mobile card control apps control spend (by applying limits on transactions or spend by month), through geographic controls, channel controls (ecommerce, telephone, retail POS), or merchant category controls. New features are envisioned for the control apps in the near term, perhaps including such features as a budget control, merchant discounts or incentive coupons/alerts.

Consumers want this functionality – and small and medium sized businesses will likely desire this capability as well (think fleet cards). This aspect of customer empowerment is but one aspect of customers beginning to take control of their financial lives.

Financial institutions will benefit from this app, as well. Financial institutions have reported reduced fraud on accounts with mobile card controls. In addition, they are seeing increased usage and increased loyalty – along with a likely reduction in call center traffic.

Call center traffic can be reduced in several possible ways. Call-ins to the call center could be reduced. Possible call volume reductions could stem from eliminating requests for international usage to be blocked/permitted, or for ecommerce transactions to be blocked/permitted. Although customers would still be able to call-in for these blocks or releases, if that functionality is offered on their mobile phones, customers would prefer mobile control to calling-in.

Here is the big prediction. Mobile card controls are just now being offered by processors to financial institutions and ultimately to customers. It is expected that financial institutions will have some challenges in selling the adoption of this service to customers – and the right combination of marketing communications must be developed and offered. The demand is there – if the customer is made aware of the application and implementation is easy.

Key Take-Away

This service is a soon-to-be best practice over time. It just makes sense. Any financial institution offering this service in the next few years will have first mover advantage. This translates into increasing usage and retention for the protected account.

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