[Dave Birch] Gartner have published a report agreeing with Aneace that payment schemes need to offer merchants new promotional marketing capabilities at the POS to reduce pressure on interchange. They tend to be thinking about loyalty, receipting and that kind of thing. But I also wonder if one of the most obvious value-added services around payments isn’t, after all, a bank account? Perhaps an way to bring down costs is to provide limited functionality payment account rather than full-blown bank accounts that overshoot the needs of a substantial fraction of the customer base and don’t address the needs of the population of non-consumers of bank services, thereby matching the value offered more closely to the customer needs.

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Talking about non-consumers being converted consumers, here we are on the appointed “day to open eldest son’s first bank account”. He doesn’t really need a bank account, of course. What he needs is a “payment account”. A Visa or MasterCard that he can use in shops on the web and at ATMs, that I can transfer money to. The bizarre thing is that the bank will give him an account with a debit card for free and pay him interest on the balance, but will charge him (through the nose) for a prepaid card with no account and no interest on the balance. Odd. Anyway, he has some birthday money that he no longer wants to keep in cash under his pillow, he’s now a teenager and it’s time to enter the financial system…

Me: Have you got a letter or something with your address on it?
No.1 Son: No, who sends me letters?
Me: I don’t know, the school or someone…

[five minutes later] No.1 Son: I’ve looked everywhere, I don’t have anything. Anyway, why do I need it, I can just tell the bank what my address is.
Me: It doesn’t work like that. Now go away and find something.

[several minutes later] No.1 Son: I found this Lego magazine.
Me: Great. Let’s go.
No.1 Son: This is boring. Why can’t we do it on the Internet?
Me (in head): Good question.
Me (out loud): Get off the phone, shut down the computer, get your coat on and get in the car.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

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