Data Dive

Venmo Says Yes To QR, Everyone Loves Rewards And Wells Fargo's Saga Carries On

There was not much in the mainstream news this week to cheer for — between a terrifying situation abroad in North Korea and a tragic situation Charlottesville, Virginia, somberness was more or less the order of the week. The main bright spot in the news seems to be that no one won the Powerball jackpot on Saturday, so millions of Americans will get to think hard about what they will do when they win the $430 million jackpot when the numbers are drawn Wednesday.

In payments and commerce news, things were thankfully a bit brighter. Well, except for Wells Fargo, which has found itself tangled up in another kerfuffle over products packaged to their consumers. But Venmo managed to make its next leap forward this week, while giving QR codes their latest important thumbs up from a major player.  And both Verizon and Bank of America this week decided to see how they could make the world a more rewarding place for the loyal.

Venmo Goes QR

Between demonetization in India and wholesale dominance in China (the world’s largest mobile payments market) QR codes have had a very good year. And it seems they have their latest high-profile sign-on.

Venmo has launched a new QR code feature to make it easier to find friends with its mobile payments app.

The aim, according to reports, is to free the P2P payments process of friction by making it easier for users to add connections to the lists of people they can pay — and who can pay them. To access the new feature, consumers on iOS or Android can find it under a new menu option called Scan Code.

Venmo users can then tap their camera to either scan a friend’s QR code — or to scan a unique Venmo code.  Users can post their P2P QR codes to messaging apps like iMessenger or embed them in their social media accounts or emails. They can even save a code as an image to use on their phones in the future.

The code also appears next to a user’s photo within the Venmo mobile app — tapping it makes it larger for easier scanning.

Venmo finds itself following Snapchat, which added Snapcodes in 2015 to make it easier for users to connect via the app. Messengers Kik, WeChat, Line and Spotify have also embraced QR codes, and Apple is reportedly testing a QR code scanning capability that would function directly from the phone’s camera.

The QR code revolution is here — and gaining steam.

Speaking of things gaining mass popularity...
Loyalty And Rewards Big Week  
When in doubt, find new ways to entice consumers with rewards — especially the right consumers.  Both Bank of America and Verizon had some high profile loyalty and rewards announcements this week.

Verizon Wireless announced news on Monday of a new loyalty program geared toward things people use every day.

In a blog post, the mobile carrier said the new loyalty program — Verizon Up — is meant to be an easier-to-use rewards model than ones that rely on users accumulating  thousands of points only to exchange them for small items.

“Customers were seeking real rewards that had real value, and, most importantly, they wanted rewards that were rooted in experiences. That’s how Verizon Up came to life. Verizon is upping their game and listening even harder to their customers. It’s digital only, simple to use and connects you with the brands and access to experiences you know and love,” Verizon Wireless said in the post.

Under the program, for every $300 spent on a Verizon wireless bill, the consumer earns one credit that can be redeemed for rewards and/or consumer experiences. Customers earn credits for paying their bill, and every month customers get six new customized rewards to choose from — so there is a constant stream of rewards, said Verizon.

Taking a different tack, Bank of America is making a play in the high-end rewards credit card battle, rolling out the Bank of America Premium Rewards credit card in September.

Card holders will get two points for every dollar they spend on travel and dining and one and a half points per every dollar spent on everything outside of those two categories — with no cap on the amount of reward points a credit card user can earn.

And more affluent consumers get more rewarded — customers keeping over $20,000 in a checking, savings or investment accounts with the company have a shot at more points. Those with $20,000 to $50,000 get 2.5 points for every dollar spent on travel and dining and 1.875 points on every other purchase.

Customers with $50,000 to $100,000 in a Bank of America account earn 3 points for every dollar spent on travel and dining and 2.25 points for all other purchases.

To entice more customers on board, BoA is offering a signup bonus of 50,000 points to customers who spend $3,000 in the first three months of opening the Bank of America Premium Rewards credit card account — $3,000 to get 50,000 rewards points is the lowest spending requirement of the premium rewards credit cards.

That might be crucial, as BoA is now wading out to compete with Amex and Chase in the high-end, high-reward card market, and it remains to be seen if the target millennial consumers looking for those big travel rewards are looking for another premium rewards card in their wallets.

Well Fargo’s Latest Headache

They say it never rains, it pours. And since there's been a monsoon over Wells Fargo this whole year, we imagine they are getting good at stocking up on umbrellas at this point.

Reports this week indicate that Wells Fargo failed to refund customers unused GAP insurance.

GAP — or guaranteed auto protection —  pays the difference between what is owed on the car and the insurance payout on the car (if there is a gap). Consumers are not required to carry the product — which tends to cost $400-$600 — but dealers tend to favor it during auto-sale negotiations.

Should borrowers pay back their loans early, they are entitled to a refund on their GAP insurance because they paid for a longer term than they used. It seems Wells Fargo forgot to refund that money when it ought to have.

“During an internal review, we discovered issues related to a lack of oversight and controls surrounding the administration of Guaranteed Asset Protection products. We are reviewing our practices and actively working with our dealers and have already begun making improvements to the GAP refund process. If we find customer impacts, we will make customers whole,” said Jennifer A. Temple, a Wells Fargo spokesperson.

Temple was not able to offer any information on when the problem began and said the bank is still trying to determine the number of customers affected.

“We are focused on ensuring that the root causes of a firm’s compliance and controls breakdowns are understood and addressed,” said Darren Gersh, a spokesman for the Federal Reserve Board in Washington, before adding, “the Federal Reserve Board will take any regulatory and supervisory steps we feel are necessary to ensure the firm’s attention to compliance.”

This follows reports in July that Wells had forced unnecessary and expensive insurance on auto-loan customers — and least year’s scandal that revolved around Wells Fargo’s opening millions of accounts illegally using customer information.

Wells — as noted in a regulatory filing last week — continues to work on these issues.

“The board recognizes that there is still work to be done, and, in response to feedback received at our annual stockholders meeting in April 2017, the board is engaging in an ongoing comprehensive review of its structure, composition and practices,” it said.

So what did we learn this week?

Consumers like getting stuff — and it seems there is an ongoing race to see how much stuff consumers can be given. The corollary: consumers don’t like it when you take stuff from them, hence Wells Fargo’s ongoing public relations problems.

And everyone, it seems, likes QR codes — the retro hit of the last 18 months.

Have a good week.



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