This week, the biggest names in financial technology were at a conference in San Francisco, showing off products and services to journalists, potential investors/partners and one another. Meanwhile, 8.9% of Bay Area residents are unemployed according to official numbers, meaning the actual percentage is likely substantially higher. Despite the booming tech industry, Bay Area residents have the same unemployment rate as the rest of the country — even a little bit higher. What is the use of all this technology if we have no money? This week’s news has some answers.
We started off the week with the sobering news that one in four millenials does not make enough money to afford the essentials. WSL Strategic Retail conducted the survey, as a way of estimating whether the retail industry should even be betting on millenials to be the consumers of the future. If we don’t ever make any money, perhaps it’s unwise for retailers to assume that we will one day. Graduating into a recession has a way of depressing lifetime earnings. Retailers might be wise to start taking out ads in AARP instead of Nylon Guys, or whatever.
Really no one knows just what to do with us, it seems. Prepaid appears to be one solution. American Express released a prepaid card specifically for college students this week. It will be sold through Barnes and Noble bookstores, and has a competitive fee schedule. Chase also got in the game this week, with a reloadable card of its own, called Liquid. Liquid has the convenience of a nationwide ATM network for users to deposit cash and checks on, for free. This might actually be unprecedented in the prepaid market, and could prove transformative — how is this different from a checking account?
But because banks care less about revenue from borrowing your money to originate loans with, and more about revenue from fees, they’re about as interested in finding ways for you to spend your money as they are in finding ways for you to save. In that vein, we learned that CapitalOne acquired BankOns, a merchant-funded coupon program that works through your bank account. And, Visa will bump up its no-signature swipe limit on debit and credit cards to $50.
As much as banks have tried to leverage technology to help their customers spend, customers have been leveraging technology to help them not spend. We wrote about the scourge of “showrooming,” where would-be customers use physical retail locations as showrooms for online shopping, by using smartphones to comparison shop. We also took a look at a mobile app called Urge, which tries to help users save toward financial goals they have. Instead of making your phone into a wallet, it turns it into a virtual nag — a reminder that you shouldn’t fritter your money away on worthless goods.
Finally, there’s ISIS, the carrier-backed mobile wallet, which added American Express credit cards and the Serve payment platform this week. Already with Chase, Capital One and Barclay, ISIS continues to make progress over Google Wallet, which currently only has one card-issuer locked down — Citi.