Data Dive

Transitions Edition: Venmo, Equifax and Nordstrom

Data Dive: Intuit, Zillow And Amazon

 

Baseball season is winding down as the playoffs loom (Go Red Sox), football season is warming up (Go Pats) and the transition to fall is upon us. Warm gives way to the cold, green leaves give way to reds and golds and T-shirts give way to sweaters and hats.

Shifts and transitions were a theme in this week’s payments and commerce news, too. Venmo launched a debit card powered by Shift Financial, Equifax tried to shift some blame for its horrific breach and Nordstrom decided to transition to a store design without inventory.

The times, as Nobel Laureate Bob Dylan sang, they are a-changin’.

Venmo’s New Debit Groove

Their emerging bank-backed rivals over there at Zelle may have gotten the jump on the headlines with the announcement of its forthcoming standalone mobile app for iOS and Android, but Team Venmo had a few interesting items to keep the news cycle’s attention.

First up was the announcement that Venmo is testing a free debit card linked to users’ accounts. Currently in beta, the program allows consumers to use their Venmo debit cards in stores, online or as part of a mobile wallet.

“We have started sending a limited number of beta invitations to test a physical Venmo card to some of our users,” Venmo wrote in a statement. “While we’re excited to hear what people think, beta features are not guaranteed to see general release.”

Like the similarly conceived Square Cash card, the Venmo card comes fee-free and must have a backup reload method, such as a bank account, in case their Venmo account overdraws. The Visa-branded debit cards are issued by Metropolitan Commercial Bank via Shift Financial, a YC-backed company that provides physical and virtual debit cards to payment providers.

And Venmo wasn’t quite finished with the splashy announcements. Later in the week, the company underscored its mobile commerce ambitions with the news that going forward, its users will be able to use the card to pay for purchases at Williams-Sonoma.

Last week, Chief Operating Officer Mike Vaughan noted at a conference in New York City that the move comes as Venmo looks to expand its footprint outside of P2P and into more traditional retail use cases.

“That is very much a traditional retailer that is very innovative that comes from a traditional retail world,” Vaughan said at the conference. He noted that Williams-Sonoma CEO Laura Alber was discussing how physical stores are part of its strategy, but that digital and mobile pay options also must be in the mix.

Equifax: Blame It On The Software

In a post-hack refrain that consumers are getting a bit used to at this point, Team Equifax has an explanation for how they managed to out 143 million customers’ private credit information to hackers: Software design flaw.

Specifically, they claim it was a weakness in open-source database software developed by Apache Software Foundation.

“My understanding is the breach was perpetuated via the Apache Struts flaw,” Robert W. Baird & Co. analyst Jeffrey Meuler noted after reviewing details released by the company.

Exploiting that flaw allowed hackers to gain access to names, Social Security numbers, birthdates, addresses and, in some instances, drivers’ license numbers, as well as 209,000 U.S. consumer accounts, including dispute documents with personal identifying information for approximately 182,000 U.S. consumers.

It should be noted that the Struts open-source software system is very commonly used. According to reports, 65 percent of Fortune 100 companies, including Lockheed Martin, Citigroup, Vodafone, Virgin Atlantic, Reader’s Digest, Office Depot and Showtime all make use of it.

But we bet that only one of them had “admin” and “admin” as the user name and password.

News of the cyberattack prompted outrage from consumers and lawmakers alike. Two committees in the U.S. House of Representatives have already said they would hold hearings, reported Reuters, citing a committee spokesman. “This is obviously a very serious and very troubling situation, and our committee has already begun preparations for a hearing,” Rep. Jeb Hensarling, who chairs the Financial Services Committee, said in a statement reported by Reuters. “Large-scale security breaches are becoming all too common.”

Another Reuters report cited Moody’s Investors Service as saying the breach will hurt its growth prospects for the next three to four quarters and could tarnish the company’s reputation. Moody’s said that Equifax could face litigation, regulatory action and higher cyber insurance premiums.

Nordstrom Goes Inventory Free

Generally, one thinks of a store as a place to purchase items – but Nordstrom is rethinking that concept a bit.

The upscale retailer is experimenting with a new format: Smaller, more intimate and with a greater focus on services than goods, the new store will feature offerings like tailoring, manicures and even spaces to get a drink. And most of all, personal stylists who come bearing items that their customers have requested or they think they will like.

What the store won’t feature? Inventory.

There is no such thing as store customers or online customers, said Erik Nordstrom, the retailer’s co-president – just customers who are more empowered than ever to shop on their own terms.

The new design, dubbed Nordstrom Local, is set to premier in early October in West Hollywood.

At 3,000 feet, it is less than 25 percent of the size of a regular Nordstrom. Although there will be clothes and accessories to try on and try out, the location won’t stock them. Instead, after getting a customer’s look straight, Nordstrom can either send a personal shopper to retrieve the goods from nearby locations or arrange to have them shipped directly to the customer’s home.

“Shopping today may not always mean going to a store and looking at a vast amount of inventory,” said Shea Jensen, Nordstrom’s senior vice president of customer experience. “It can mean trusting an expert to pick out a selection of items.”

The store will also feature a bar – because shopping is thirsty work – and will function as a pick-up and drop-off station for consumers. Orders in before 2:00 p.m. can be picked up on the same day.

So, what did we learn over the last seven days?

A little change to go with the transitioning season seems to be the order of the week. Venmo is doing more than P2P, Nordstrom is changing into a new look and Equifax will see a lot of change in its future – of that there is no doubt.

Happy Monday!

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New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.

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