What We’re Reading: Payday Loans, the Mobile Wallet and Online Banking
Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom.
- Take Two on BB&T Deal for BankAtlantic
BB&T Corp. has answered the question whether it still has a stomach for a deal with BankAtlantic Bancorp. Affirmative. BB&T on Tuesday said it will assume BankAtlantic’s obligations to holders of about $285 million of trust preferred securities. A judge had blocked the original deal on the grounds that it was unfair to those bond holders of BankAtlantic, which is based in Fort Lauderdale, Fla. BB&T also would receive a 95% preferred interest in a newly established entity that will hold a $423 million pool of loans and $17 million of other assets. The pool of loans, which has an unpaid principal balance of approximately $500 million, represents a portion of the loans that BankAtlantic would have retained under the original agreement, BB&T says.
- Strands Seeks to Stand Out in Crowded Financial Management Space
To stay relevant in the hypercompetitive personal financial management space, tech companies like Strands Inc. are trying to distance themselves from the PFM standard of a one-size-fits-all approach to online budgeting. PFM tools, which allow users to track their cash flow visually through charts and calendars rather than just a plain ledger, were developed as a way to improve the appeal of account aggregation, which simply gathered transactions from multiple accounts on one screen. In recent years the PFM space has gotten very crowded, leading some players to hunt for underserved audiences. In the case of Strands, a PFM provider that counts Bank of Montreal, Banco Bilbao Vizcaya Argentaria S.A. and ING Group NV among clients, “we find that some users have a gap between retail banking and online banking; and what they have in investments,” says Edward Chang, CEO of Strands, who discussed the company’s future plans in an interview with Bank Technology News.
- Inside the mobile wallet: How does it work?
The number of people using mobile payments is on the rise, and this number will only grow over time as new technologies and advancements are introduced. Today’s consumers increasingly expect a shopping experience that seamlessly crosses online and offline channels. They use multiple channels and information sources to make buying decisions and expect an integrated experience that’s timely and consistent wherever they are and at any time—a concept First Data calls Universal Commerce. In addition to providing consumers with a new way to make payments, mobile devices represent a new channel for financial institutions to communicate with their customers.
- The Free And Easy Way To Reward Debit + Online Banking Users
How can financial institutions reward debit card users who use online channels — i.e., the best customers? Cardlytics has a solution which costs banks and credit unions absolutely nothing. Sound too good to be true? Here’s how it works. A typical consumer — we’ll call her Karen — stops into a home improvement store to pick up some items for her kitchen remodel job.
- Amazon Apple Facebook Google-Which is Most Innovative?
Apple is ranked the most innovative company, placing it ahead of Google, Facebook and Amazon, and many other brands in Javelin’s latest survey of over 5800 consumers. As laid out in our new report The Gang of Four (and Possibly Five) Apple, Google, Facebook, Amazon – and PayPal: Positioning for Payments in the New Mobile-Social Technology Era, Apple iOS is engaged a fierce battle for dominance in the smartphone market with Google Android – as platforms which gain the greatest numbers of consumers tend to be the big winners in each new tech cycle. Ground-breaking products are one of the ways that Apple determines its edge, and the release of the new iPad tablet continues in that tradition. Tim Cook laid out Apple’s Post-PC numbers: the firm sold 172 million iPod, iPhone and iPad devices last year.
- Cashing in on payday loans
Payday loans, for years a fixture in poor, working-class neighborhoods, are increasingly being offered by local banks and employee credit unions — triggering concerns by consumer groups that more Americans will be trapped in high-interest loans that could take years to pay off. More than two dozen regional and community banks now offer versions of these loans, most starting their programs since 2007. The biggest increase, however, has come at credit unions. Nearly 400 of them now are in the market, attracted by a 2010 change in regulations that boosted the maximum interest rate on payday loans to 28% from 18%. But many people can’t repay the loans when they come due.
- Many consumers not ready to adopt mobile banking, says survey
Growth in mobile banking and payments is being driven by younger consumers, but most adults are more reluctant to adopt mobile banking, said a survey cited at cuna.org.In an online survey of 504 U.S. debit cardholders conducted in January, Auriemma Consulting found that younger consumers are more likely to download a mobile-banking app — 43 percent of respondents under 45 had downloaded a mobile app from their financial institution within the previous year, while only about 22 percent of those over 45 had done so.Of 40 percent of respondents with mobile-banking capabilities, about 75 percent used their smartphone to check their account balance, 36 percent paid a bill, 32 percent received a bank notification, 31 percent paid by phone and also made a deposit, and 3 percent transferred funds. Some 17 percent of respondents said they made no mobile payments.
- How mobile payments might drive health behavior change
So long, wallet? That’s right, this summer may be remembered as the beginning of the era of mobile payments, services that let consumers pay for things in-person through their smartphone rather than with cash or a credit card. Isis, a joint venture between AT&T, Verizon Wireless, and T-Mobile USA, is the mobile operators’ answer to Google Wallet, a similar service launched by Google last year. Google Wallet currently counts more than 25 big brand chains as partners: Gap, Macy’s, Toys R Us, Office Max, RadioShack, Sports Authority, Foot Locker, among them. More relevant for this publication’s readers, however, are the restaurants, coffeeshops, and convenience stores that have signed up. Peet’s Coffee & Tea, Jamba Juice, Jack In the Box, Einstein Bros.
- Trusteer: SIM Card Fraud Schemes Target Online Banking
Many banks use OTP (one-time password) systems to validate online transactions. After a user logs in with a standard password, the site texts a one-time password to the phone that’s registered for the account. The user can’t complete the transaction without entering the OTP. This two-factor authentication, more secure than simple password protection, may be required for larger transfers. That makes it a target for fraudsters, and they keep finding new ways to subvert the system.