Friday, January 13, 2017

Thinking Outside The Payment Transaction Box
By Mark Johnson (@ReceiptReliance)

Increasingly we are seeing the question, 'What kind of new services can be provided around the payment transaction?' Digital innovation in the retail payments space has opened up many new opportunities that didn't previously exist, and while the aim for cashless payments is to make them as easy and as fast as possible, there is also growing interest in identifying other ways to add value that is complementary to the payment itself.

Something that I've put forward many times and that I think would be of enormous value to all of us is itemised digital receipt management and storage via our bank. (See TechCrunch article here ) We are all well aware of the many reasons it's important to retain our itemised receipts and for most of us, dealing with them presents an onerous task. The payment transaction records the total amount for a purchase; the merchant receipt records the itemised list of products and/or services that were received for that payment. It makes sense to connect the two for many valuable reasons. (Read about the advantages here ).

In the past, merchant receipt issuance has been a fairly separate process to the payment transaction, but times and technologies are changing. Merchants are now looking for ways to improve the purchase experience and provide additional value to their customers. As the majority of them are not software developers or payments technology experts, they are turning to others to enable that innovation. 

Banks have a wonderful opportunity here; they are in a position that they've never had before to do something outside of the box. Many fintech companies are finding their footing and arguably starting to make an impact on some of the bigger players' bottom line. Whilst they may not be necessarily poaching customers lock, stock and barrel, they are certainly providing an incentive for banks' customers to take some of their business elsewhere.

To keep their position as primary financial provider, advisor, and to stay 'top of wallet', banks have to get more creative and begin making the most of the many advantages they have such as regulatory compliance, consumer trust and a large customer base. It is up to the banks to work collaboratively amongst themselves and with others in the industry if they wish to create something truly transformative; in fact they need to do this just to keep pace and remain competitive, or as I've heard mentioned many times, they 'risk being relegated to back-end pipes'.

Itemised merchant receipt storage and management is one idea that would open up a huge opportunity for banks to provide something new and useful that will truly make a difference to their customers' lives. With automatic POS integration the issuing of receipts becomes invisible. (Read more about it here)

The spin off services that can be built on top will be amazing. Product warranty monitoring, product manual access, product level loyalty and rewards, automatic accounting and insurance interfaces, to name just a few. With customer consent, perhaps at varying levels of access, the data will be able to be used in many other ways to the benefit of not only the customer, but also merchants, banks and the community. 

Why is it important for banks to be the custodians of our receipts and not an intermediary 'fourth' party?  

Well, from a consumer's perspective, there are three main parties involved in a purchase; the consumer, the merchant and the card issuing bank.  We need a solution that is automatic, seamless, secure and ubiquitous, and by introducing a fourth party those requisites will be hard to achieve.

For instance, a fourth party will need some way to identify a consumer. In many cases this would be via personal information such as a phone number, email address, credit/debit card number or maybe bank account details. Apart from the added friction of acquiring that information, there is also the additional security risk of storing that information. Will every fourth party have the necessary bank level security to look after our data? Our bank does, and they already have all the details needed as well.

A fourth party will have to develop a relationship merchant by merchant and therefore, theoretically, there could be as many fourth parties as there are merchants. This would mean our personal information could be unnecessarily stored here, there and everywhere, and our bank would have to interface with any number of companies in order to retrieve our receipts and display them against our transactions. That's provided the fourth party has not gone out of business.

With the three party solution, a bank is not compelled to have a relationship with a particular merchant, and vice versa. For example, if I use my OneSmartBank issued credit card for a purchase, whether I am local or travelling overseas, the information gleaned from the card enables the POS software to process a purchase and send a transaction back to OneSmartBank. If it was standard to attach the itemised merchant receipt at the same time and send that as well, then it would not be necessary for me to provide any further information to the merchant or register my details with any fourth party, in order to receive a digital receipt. The merchant will not be concerned who the particular card issuing bank is and likewise, the card issuing bank won't necessarily need to 'know' the merchant.

If a bank provides a digital receipt service their customers will place their trust in them to ensure that it will work every time and be safe and secure. If a fourth party has custody of the receipts and something goes wrong, it will reflect unfavourably on the bank, whether the fourth party is visible to the bank's customer or not. It will also be out of the control of the bank to rectify any issues.

Merchants are also acutely aware of their customers' security and privacy concerns. That is why not only consumer trust in their bank comes in to play, but also the merchants' trust in banks as well. Merchants will want to be assured that the receipt they issue is transferred securely from the POS to the customer's account, is not tampered with, and remains a true and original version.

It is also likely that interfacing with fourth parties will cost the bank unnecessary fees which could vary from company to company. Why should banks pay a fourth party when it is a role they can easily fulfil themselves? They already have the infrastructure in place in addition to working relationships with other payments entities and the retail community. In fact it is worth noting that some banks have already begun moves in this area by provisioning for the retrieval and display of receipts that their customers have manually uploaded and attached to transactions. (Find out what some banks are doing here)

Finally, I don't think this idea can be executed with a single piece of software or platform sitting between many merchants and many banks, which is what a fourth party would have to develop in order to make it work. Given the merchant by merchant proposition, and the variety of POS and Online systems, Apps, Mobile Pays and AI payment methods etc, it would be extremely difficult to do, if not impossible. The notion of a central storage location between the merchant and the bank lacks purpose and creates a point of vulnerability in the process. An idea can be acted upon in many different ways, and in this circumstance, instead of producing a specific product, I think creating awareness, and encouraging and facilitating collaboration between relevant parties in a position to implement it is the best strategy.

The last few years have seen banks investing heavily in digital innovation. From core system upgrades and Big Data analytics to mobile banking, mobile payments, APIs and distributed ledger technology. In a number of cases the ROI is merely to stay in business and remain competitive. As some revenue doors close, banks will be looking for new doors to open and I do think a real opportunity will be missed if they don't move on ideas like the one outlined here. Banks are great followers, and in some circumstances that strategy works, but in others it is necessary to lead, especially now when consumers are more technologically engaged than ever.

Nowadays we are presented with many different ways to pay for goods and services. Regardless of which method is used - plastic, mobile, online, inApp, voice, or maybe an IoT smart device etc - the payment transaction is common to all and common globally. Associating the itemised merchant receipt with it is a simple, yet powerful idea.

It's time for banks to start thinking outside the payment transaction box!

Thursday, November 10, 2016

Bank Disintermediation
By Mark Johnson, CEO Receipt Reliance

Some time ago, Jim Marous from The Financial Brand wrote a great article titled “5 Ways Is Stealing Your Customers” and cleverly demonstrated how a product like Mint could over time disintermediate the banks, doing so right under their gaze, rendering them to nothing more than useful backend plumbing. They would become mere utilities.

Banks in Australia and overseas are now offering new APIs to third-party developers/providers. For example, according to an itnews article (ANZ Bank opens up its mainframe) , ANZ  "has opened up its mainframe with around 20 new application programming interfaces (APIs) tapping directly into its two main core banking applications”.

In another article from banking technology, (Deutsche Bank opens data store to developers), Deutsche Bank "is opening its data store to software developers from Germany and abroad as it looks for more digital solutions for its bank clients”.

European banks are now obligated under new PSD2 guidelines to provide for API access of financial data to third-parties, having two years from Jan '16 to comply. Banks in Australia will do so at the RBA behest, and also to take advantage of the NPP, particularly the overlay (convenience) services being introduced as part of the rollout (Read more about NPP here)

So here in lies a dilemma for banks; while there are many types of third-party apps enabled via open APIs that will enhance the banks' appeal to customers and facilitate as yet undiscovered utility and convenience services, there will also be those that can lead down the path as described via the link above.

Do banks resist the third-party invasion of “mint” type products by restricting the level of access, by hiding behind regulatory bushes or by discriminating? I hope not, as going negative will usually fail.

Or do banks roll their sleeves up and utilise some of that capital they have and compete? I think this is the most likely outcome and indeed that is what we are starting to see happen.

I imagine banks will become great aggregators for customers who have accounts with more than one bank and will provide useful, intuitive and contextual PFM front end tools for them. I imagine they will have the resources to invest in IP or purchase necessary IP protection, hire the right skills and expertise and will ultimately out-compete the majority of third- party start-ups.

Perhaps banks will lose some of their traditional revenue to these third-parties, but there will also be opportunity to introduce new revenue streams for new services they can provide around payments.

Those third-party start-ups that do succeed will do so via a killer app or two that is IP protected or is difficult to reverse engineer. Over time many of these apps may eventually be bought by the banks anyway and the status quo will return. Some disruptors will be successful, but for the most part banks will have out disrupted the disruptors and hopefully the real winners will be the banks' customers.


David Birch, a highly respected and followed commentator and advisor in the payments industry and world expert on digital identity suggests that in 2026 banks will be a place you store your digital identity, not your money. If this is true then banks are in for a busy but very exciting period in their history.

Monday, September 12, 2016

Mobile Payments & Digital Receipts
By Mark Johnson, CEO of Receipt Reliance Pty Ltd @receiptreliance.

The overall feeling within the payments industry seems to be that the uptake of mobile payments has been slower than expected. There have been plenty of articles expressing that sentiment along with trying to shed some light on why this is the case. Many include the results of consumer surveys that ask questions about, among other things, digital receipts, and the findings seems to suggest that they would help boost adoption. But I'm not convinced the digital receipt questions put to consumers are entirely relevant.

To clarify, I'm talking about itemized merchant receipts, not payment receipts or payment notifications that are typically received as push notifications to your mobile immediately after a purchase. These notifications generally have minimal information such as a total amount, the merchant name and time of purchase, and function as a form of security more than anything else. 
Often the generic term 'digital receipt' can be a bit ambiguous and misleading.

So regarding merchant receipts, when surveys ask a question such as, "If digital receipts were provided, would you be more likely to use your phone to make mobile payments?” a few points come to mind straight away.

Firstly, and most importantly, should receipts be stored on our phones?

Secondly, there is an implication that wallet developers have a say over the method with which merchants issue receipts and that it's just a matter of coding this feature in.

Thirdly, the question, in a subtle kind of way, implies that using a mobile wallet to pay is the only way to get a digital receipt and that when you use a physical card you can't.

To the first point, the answer is no, receipts should not be stored on our phones. They should be able to be displayed, but not stored.

To illustrate why I think this, let me talk about Apple for a moment.

Apple has been very vocal about the privacy and security of our data and has demonstrated their commitment to those ideals on many occasions. With regard to Apple Pay, they have made it clear that they do not collect any user identifiable transaction information and that our device specific card details (Device Account Number (DAN) and other data - read more about this here), are encrypted and stored in the phone's Secure Element. So, what if our phone is lost, damaged or stolen? Well, that payment information can easily be set up again on another phone because it is supplied by the card issuing FI.

What I'm getting at here is that information stored only on our phone needs to be replaceable (or can be regenerated). Receipts are sensitive information, have value to us (returns, warranty and expense claims etc) and are not easily replaced. Some merchants may be in a position to reissue a receipt but that may require some time and effort to make happen, and what a chore even just figuring out what is missing.

You might ask "What about cloud backup?"  Well, there is always the risk that our data could be compromised, and the risks that we will not have a recent enough backup of our phone to ensure all receipts are saved. No doubt at one time or another we've all experienced the loss of some hard work by not backing up as we go; consumers can't always be relied upon!

If you have read any of my previous blogs, you will know that I'm promoting the concept of attaching receipts to their respective payment transactions, automatically via POS integration, and having them transferred and stored together at your bank (EFRTS™).  We trust banks with our money, why not with our receipts?  This is not to suggest that there is zero risk with banks, but they are regulated institutions that survive on their reputation for keeping our money and data safe, secure and private.

Using this method of managing digital receipts, we would be able to view them at anytime from anywhere. Banking apps on your phone can display them and if given consent, mobile payment wallet providers and/or financial transaction aggregators can also display them allowing you to consolidate your view of them whether payment was made via a mobile, physical card or a voice command. This may come in rather handy when searching for a particular receipt and you're not sure which card or payment method you used.

Speaking of voice, imagine getting your voice assistant, say Siri for instance, to order some groceries, arrange delivery and make a payment with your preferred debit or credit card account. How does Siri get the merchant receipt and where does Siri send it for storage, should we have to compromise our privacy and anonymity by supplying an email address or phone number? It would seem absurd, especially if the payment system has just used some form of tokenization so as not to have to give out our real card details. I would suggest that the POS system will produce the merchant receipt which is then sent to your issuing bank along with the payment transaction. Applying this process for plastic, mobile, wearables, voice and other payment mechanisms would lead to a global, ubiquitous, standard system.

Connecting the merchant receipt to the payment transaction has so many advantages not only for the consumer, but for the merchant and bank as well.  A previous blog Digital Receipts at Your Bank: WIIFM? outlines some of those advantages in more detail.

Regarding my second point, at the moment a wallet developer doesn't really have any control over how digital receipts are issued from a merchant and this will vary from one merchant to another. They are faced with the same dilemma consumers are experiencing right now when it comes to digital receipts. How many digital receipt systems do I have to or want to support? How will the receipt get into the wallet, will it rely on NFC, WiFi etc?

The number of different third party methods currently in use makes it a bit chaotic (see our previous blog The Chaos of Digital Receipts in 2016). Some merchants are also developing their own 'pays' and could capture their digital receipts, but the receipt feature may have limited use elsewhere.

One thing that can be relied upon that is consistent globally in the payment process is that a payment transaction is created and delivered to the card issuing FI. We need a similarly ubiquitous method for the transport and storage of the itemised merchant digital receipts.

To my third point, when survey respondents are asked if they would switch to mobile pay if digital receipts were on offer, it is promoting digital receipts as an added benefit to mobile use. But actually, many consumers are already receiving digital receipts using plastic! How are digital receipts going to be an incentive to change paying behaviour when many merchants provide them already to physical card users? (Albeit in no standard way).

Mobile payment adoption will continue to rise but it is going to take some time. Consumers are worried about the security of using their mobiles to pay but in fact those fears are for the most part misplaced. As outlined here,  ISACA Challenges Mobile Payment Security Perceptions , the use of tokenization, device specific cryptograms and two-factor authentication really make it difficult for fraudsters. This increased security also has benefits for the merchant. According to the ISACA guide A key benefit for merchants is that enhanced security should lower fraud and thereby lower costs,” More needs to be done to educate consumers on the safety of using their mobile phones to pay.

Loyalty integration will also help boost adoption. Consumers won't want to download a loyalty app for every merchant they frequent. The common factor across their shopping experience will be the payment mechanism so it makes sense for loyalty to be part of that.

Ensuring a seamless, consistent customer experience that 'works' every time will really drive further adoption. Here in Australia NFC is widely used and from the personal experience of  a colleague of mine who uses Apple Pay, merchants where Apple Pay doesn't work are the exception rather than the norm. Some other countries however, are still bogged down in older legacy POS systems so will no doubt take a bit longer to become commonplace. Typically merchants will want to get their money's worth out of the technology in which they’ve already invested.

With digital receipts the payment mechanism is, and should be, irrelevant. Having the ability to view your receipts on your mobile, tablet or desktop however is a must, whether via a banking app, a payment wallet or some sort of aggregation service. Whether or not mobile payment survey questions concerning digital receipts are valid or relevant in relation to the big picture of digital receipts may be a matter of opinion, but one thing is certain; the results give a strong indication that consumers are in favour of some form of digital receipt.

Thursday, June 2, 2016

The Chaos of Digital Receipts in 2016
By Mark Johnson, CEO of Receipt Reliance Pty Ltd, an Australian company promoting digital receipts(

The interest surrounding digital receipts continues to grow with a sense of expectation that a universally accepted solution will emerge soon. Currently the market is going through a 'try and test' period resulting in a myriad of solutions for consumers and merchants alike. Unfortunately, having so many choices has created its own set of issues. Because of the many methods in use, the digital receipt space is fractured and there is no clear winner in sight.

At the moment, from a consumer perspective, it's not just a matter of choosing one solution over another and then having all your receipts issued to a single location. 

Instead, consumers are being dictated to by the selection each merchant makes, so when making a purchase you never know what you're going to get.  

On one hand, a few of these ideas might gain traction - if they were the only idea and brand being deployed. But the reality is there are many companies vying for market share resulting in a multitude of apps/solutions being utilized.

On the other hand, if some of these solutions are replicated at every merchant we visit, in particular those that require our payment card details, not only personal data but also our sensitive financial data could be held at any number of locations. Is the burden of keeping those details secure really what merchants want?  Given the significant data breaches some major retailers have experienced over the last couple of years it is a risky path to take and could lead to the downfall of some businesses.

While there are many apps and third party companies available for converting receipts into a digital format by taking photos, scanning or sending paper receipts off somewhere to have the data extracted, our aim should be to develop a solution that gives us the choice of not having to print a receipt at all. What we want from a digital alternative is to automate the process of receiving receipts and to unburden ourselves from the storage and management of them.

So let's look at some of the solutions currently in use that give us the option of not having to receive a paper receipt. There are many ideas emerging and a lot of merchants and receipt companies are offering combinations thereof.


Email is probably the most common solution to date. Initially, providing for this option involved some kind of POS add on or integration supplied by a third party receipt company, however many POS vendors themselves are now  incorporating email address capture and email receipt issuance as part of a maintenance upgrade of their POS software. Vendors new to the market include it as standard. I think consumers are divided as to whether divulging some personal information as a trade off to receive a digital receipt is acceptable.  There is also privacy, storage and management considerations, the increased risk of fraud, phishing scams and unwanted marketing material to consider.

SMS to mobile
This requires an app, cloud account and/or loyalty membership to set up phone details.

Consumers scan a QR code or barcode to receive a digital receipt.
Consumers use NFC to 'tap n go' a receipt to their mobile.
Merchant app that allows you to pay and then store a receipt accessible via the app or cloud account.

Consumers scan a loyalty card to receive a digital receipt via email or sent to a cloud account.

Payment Card
Solutions that require the consumer to register their payment card details with a third party so that when that card is used at participating merchants the digital receipts are automatically sent to the consumer's digital post box, a cloud storage account, or sent to an email address.
With so many different approaches to providing a solution, new problems of added friction, management, storage, consolidation, privacy and security present themselves for consumers. Additionally, there are no guarantees that a merchant or third party providing a receipt facility will remain in business; they could cease operation at any time. Maybe the old shoebox wasn't so bad after all! 

It's becoming obvious that for any digital receipt solution to be successful it must be all about the consumer, and for the most part current solutions are all about the merchant. They are marketed to the merchant as a tool for post sale communication with their customers, however from some customer’s  point of view this tack can come across as aggressive and invasive, and why should consumers have to trade off some personal information just to receive a digital receipt anyway? They don't have to do that to get a paper version. 

If we stop thinking from the merchant’s perspective, “These are my customers”, but instead think from the customer’s perspective, “I share my business with many merchants”, then the direction we should take becomes a lot clearer.

An idea that's been around for a while now is a concept whereby the digital receipt is generated at the POS, linked to the originating payment transaction and then made available to consumers via their online/mobile banking transaction history.  It's an interesting prospect to think we could just make a card payment and that's it; no email addresses, phone numbers, user ids, passwords, apps or payment card details required - nothing. The receipt would be available to us whenever we needed to access it - and only when we needed to access it - a pull solution which puts the customer in control rather than a push solution which puts the merchant in control. The issuing, storage and management of receipts would effectively become invisible. Banks store our financial information securely and privately, maybe it's the best place for our purchasing history as well.  They are certainly a trusted partner for both consumers and merchants, more so than many new third party companies.

This solution also works independent of the payment device used.  In the same way a payment transaction is processed regardless of whether you're paying by physical card, virtual card, mobile, or wearable etc, so the receipt would be too.  It doesn't depend on providing an email address or having a smart phone in your hand. Everyone should be able to enjoy the convenience of digital receipts.

I've seen a lot of articles talking about shopping in a Virtual Reality mall, shopping via an Internet of Things  connected device, shopping using wearables, and while watching some pretty neat videos showcasing how these applications might work, one thing jumps out at me immediately; what about the itemised merchant receipt? It made me wonder why merchant digital receipts are for the most part absent from the payments industry dialogue.  

One reason for this may be about the perception of what is the end point of the payment process. For payments entities the issuance of the payment receipt is the conclusion of the transaction, whereas for consumers, receiving the merchant receipt signifies the end of the shopping experience. Technically, the merchant receipt has nothing to do with the payment transaction, but in a consumer's mind it has everything to do with it. While providing this functionality has not been within the purview of the payments industry in the past, the wave of digital innovation sweeping over the globe has perhaps changed our expectations. 

The notion of having receipts connected to the payment transaction is percolating throughout the payments industry. Several examples are:

American Express OPEN offers ReceiptMatch for their business cards. It works by allowing users to upload photos of receipts and email receipts and then it attempts to match them to corresponding transactions. If it is unable to determine a match the user has the option to manually match it to a transaction themselves.

Capital One allows users to capture receipts via their Capital One Wallet by snapping a photo of a paper receipt to connect it to a payment transaction in the app.

JPMorgan Chase (JPM) allows for receipt capture via their Ink from Chase app. The user can snap and save a receipt right after their purchase.

Royal Bank of Canada (RBC) is adding digital receipt functionality to their mobile wallet according to NFC World. Royal Bank of Canada’s Jeremy Bornstein says “We know that there’s a number of companies that are trying to do truly digital receipts. We think it will be an incredibly powerful tool that completes the cycle of commerce".

 Mondo allows customers to attach a photo of a receipt to a payment transaction via their app.

 Pleo is introducing a company payment card (physical for in-store purchases and virtual for online) along with supporting mobile and web apps which allow the matching of receipts to transactions.  In-store receipts are captured by taking a photograph of them right after a purchase, and for online purchases Pleo keeps track of email receipts arriving in your inbox.

Consumers and financial institutions are seeing the value in connecting the receipt with its corresponding payment transaction but the real advantage will come from this being automatically done via POS integration. This is the key to reducing friction, the possibility of error and fraud, and will truly make a difference to our daily lives.

There's no denying that all of us, at least once in awhile, and for any number of reasons, wish we could drill further down into a transaction. Many financial institutions are now seeking to add enhanced transaction data functionality to their software and although there are improvements, they cannot give you the full itemised details of each transaction. Connecting the receipt however, gives us all the information we need.

Today there is an increased focus on tools to help us manage our finances and monitor our spending patterns in a real time and contextual way. The feedback provided by these tools is only as good as the information fed into them so the more granular the information, the better. Receipts will supply a rich source of detailed information that can be analysed to give us a more complete and accurate picture.

An advantage that stands out for businesses relates to expense management. Many accounting systems already receive bank feeds to automatically load transactions. Now imagine how useful it would be to have the receipt already attached to the payment and transferred at the same time. Instead of separating them at the POS only to have to match them again later, why not keep them together from the start thus maintaining data integrity;  a trusted and true source of information from the POS to accounting.

The convenience, simplicity and universality of paper receipts has contributed to the longevity of their use and these factors will certainly be the key to what will eventually prevail in the way of a digital receipt solution. If it is customer oriented, can remove friction, have the potential to become ubiquitous, and offers security and privacy from the moment of creation by the merchant through to delivery and place of storage, then we may be looking at the future of digital receipts.

Wednesday, April 13, 2016

Will a time come when banks pay us for our data?
By Mark Johnson – CEO Receipt Reliance Pty Ltd

For some time now I have been talking about a concept of digital receipts being stored at your bank where we utilise the prevailing global payment rails to transmit digital copies of merchant receipts back to a customer’s issuing bank and make those receipts available as an attachment to the payment transaction that we already get on our bank statements/ledgers.

We have envisaged that a bank would levy a fee for providing the receipt service and certainly all the research suggests that customers are more than happy to pay for a real and tangible service, something which improves the quality of their lives. No more lost receipts are a great incentive.

There are also many benefits for all three participants involved (the customer, the merchant and the bank, as I have outlined in a previous blog “Digital Receipts at Your Bank: WIIFM?” and banks in particular are turning their attention to direct, contextual, location based marketing that could become available to them by accessing line item data as can be sourced from a digital receipt.

Now queue privacy and trust!

To date,  banks have enjoyed a strong position of trust and I would suggest a lot of that is to do with the low profile banks currently take in relation to how they market to their customers.

Banks aren’t in your face with their marketing, unlike other platforms that follow you around for what seems like forever, because you happened to do a bit of window shopping and look at some products. I recently had a look at a Seiko watch online and was subsequently bombarded with adverts for Seiko and other watches despite the fact I was no longer interested. Personally I find this sort of marketing intrusive and it heightens my concern about privacy on the web.

So far banks don’t do this in any significant way and if they do, it is pretty low-key. As a result, customers don’t really appreciate the massive amounts of data banks already have on our day to day life. This softly behind the scenes approach has instilled trust and loyalty in us.

Nevertheless, banks are now looking to get into the direct marketing game in a bigger more targeted way. This article by Chris Skinner from the Financial Services Club The top ten trends in banking innovation makes some interesting observations about predictive analytics at item 6 and I quote:

“It’s funny how I’ve about banks being disintermediated since the 1990s and yet they’re still here and they’re now bigger.  I don’t believe banks will be disintermediated or, as we now call it, unbundled.  Banks instead are reintermediating and rebundling everything and this trend proves it.  There are various examples of this, specifically the idea of predictive analytics and partnering to remind you that you that it’s your partner’s birthday today, for example.  The idea here – a stretch for most banks – is that the bank will not only know it’s their birthday, but will tell you what you brought them for Christmas and for last year’s present, and suggest things they might like this year.  I can’t believe this one right now, but apparently Alfa Bank (Russia), CBA (Australia), Santander (Spain) and Caixa (Brazil) are already well on the road to making this happen”.

Banks will need to tread very carefully if they want to avoid breaking that significant trust bond with customers, something they have spent many years cultivating. However, if we get back to the premise of this blog it would seem that banks might be able to have their cake and eat it too!

What if, instead of perhaps thinking about charging customers to keep their receipt data for them, banks actually paid customers to use their data? Because it is now becoming very obvious that there is a strong business case for banks to monetize this data in a variety of ways particularly as line item data from merchant receipts goes a level deeper than Metadata currently being exploited.

There will of course be a group of customers who will have strong privacy concerns and would not want to have their receipt data available for purposes other than their own personal use. But the great majority would like to enjoy some benefit from the use of their receipt data.

Let’s imagine in a brave new world there are several levels of receipt access via your bank. For example:

1.       Only customer sees their own data  
2.       Anonymous data is available to bank  
3.       Full receipt data is available to bank

In exchange for various levels of data, banks will reward customers. This could be in the form of a payment, reduced or zero fees, product discounts etc or whatever works for both the bank and the customer.

The obvious benefits for banks would be KYC enhancements, PFM tools for their clients, fraud detection and prevention, reduced interbank fees from client queries, revenue generated by data monetization to name a few, all of which can be extremely profitable for the banks and certainly outweigh the cost of  rewarding customers for their receipt data.

The customer relationship and loyalty enhancements alone will have a long term financial gain for the banks. It will make their customers extremely sticky and as we all know it is far more costly to get new customers than to retain existing ones.

Monday, December 7, 2015

Invisible Digital Receipts
By Mark Johnson – CEO Receipt Reliance Pty Ltd

The payments space is seeing an extraordinary amount of innovation taking place. Now there are many ways for consumers to pay for goods and services and it's still evolving. One thing many payment providers are striving for is the best customer experience possible; the least amount of friction the better. In fact the word 'invisible' is now being used to describe the ideal payment experience, the objective being that no sooner you've indicated that you wish to purchase something than it just happens in the background. Wouldn't it be great if the final part of the transaction, the receipt, was invisible too?

Arguably, the most common way to receive a digital receipt is via email. Apple pioneered this method back in 2005 and is still doing it. With this idea in mind, receipt companies have emerged with add-on solutions whereby after some software integration at the POS, consumers are required to give out an email address in order to receive an 'e-receipt'. POS vendors themselves are now following this lead and building customer email address capture and email receipt issuance into their software, often delivered as part of a maintenance upgrade.

While email receipts have started to gain traction, they haven't taken off as might have been expected and are just one of several methods trying to gain market share.  Consumers are wary about giving out personal information knowing they run the risk of their inbox being inundated with unwanted marketing material, as well as concerns about  fraud and phishing scams, and at the end of the day they are still responsible for the storage and management of their receipts.  

Another type of digital receipt solution that has begun to gather pace is cloud based receipt storage accessible via an app on your PC or mobile device.  What is transformational about these new cloud based solutions is that many are now embracing POS/data integration where the app talks with the merchant's POS system to collect the receipt.

While this is an important step forward, it raises another issue that may not have been fully appreciated; If a lot of cloud based solutions with POS/data integration start to appear, won’t they still present the customer with the dilemma of multiple logins etc and perhaps some consolidation tasks for filing receipts from different cloud based apps into one place? Not to mention the loss of valuable screen real estate on your mobile device, tablet and/or PC as you would have to download multiple merchants' apps just to get a digital receipt!

The objective is to simplify our lives and it's just not practical to expect consumers to download a new app each time they visit a different merchant. It could be argued that perhaps digital receipts should not be app related at all; that what is required is a common method, rather than a common app.

If we have POS/data integration with merchant receipt linked to the bank payment transaction via banks' own payments pipes or via a bank accessible cloud storage location, the customer will win. They will win because whether its cloud or bank pipes, the customer need not worry that they don’t have a particular merchant's app; they will just go to their familiar banking portal (app or internet login) and the receipt will be there, no friction and no lost receipts.

Think of it this way:

·         Digital receipt app per merchant    = many merchant receipt apps per customer device
·         Digital receipt via your bank portal = no merchant receipt apps on customer device

There are some companies moving in this direction but they only have part of the equation.  While they have the POS/data integration triggered by a bank card payment, they are lacking the link to the bank payment transaction and thus not taking advantage of all the value that doing so offers. They also require the disclosure of your payment card details which creates another point of vulnerability should the Digital Receipt company suffer a data breach. Others have provided for digital copies of paper receipts and email receipts to be matched and/or manually linked to a bank payment transaction but again the opportunity is there for error, fraud and friction because it relies too heavily on customer input to make it work. Having a digital receipt captured and then stored by your bank at the time you make an EFT payment avoids all the above concerns.

The adoption of a digital receipt solution like this may take time however I feel that any reservations some merchants might have will be resolved by natural competitive market forces; merchants, and banks, will not want to miss the opportunity to attract new customers and strengthen their existing customer base. When EFTPOS was first introduced in the US in 1981, merchants and consumers were initially slow to accept it, however that soon changed and today it is widely used around the globe. I think the same will happen for a digital receipt solution such as this. When consumers and businesses experience the convenience and added value it will afford,  the only thing they will be asking is 'why has it taken so long?'.

Tuesday, November 3, 2015

Are retailers shooting themselves in the foot?
By Mark Johnson – CEO Receipt Reliance Pty Ltd

Every now and then, when discussing my digital receipt idea EFRTS™ within the finance industry,  the feedback I receive is  that retailers will not be willing to disclose detailed customer purchasing information (itemised retailer/merchant receipts) to a third party such as a bank, even though they are considered to be a trusted partner of the business.
They say retailers are reluctant because the data that they supply may be used against them by competitors who have signed up for a marketing intelligence campaign. If this proposition is true, then perhaps retailers are shooting themselves in the foot!

There may have been some foundation for this view in the past, but I believe that has now been outweighed by the advantages to retailers if they are willing to make receipt data available to a consumer's bank or financial institution.

In fact, whether retailers like it or not, there is a proliferation of apps available that allow consumers to photograph, scan and receive receipts to their smart phones via NFC or cloud, and of course don’t forget email. While these receipt capture methods are not friction free (as we have talked about in earlier blogs and publications) once captured, this data can then be massaged for a whole range of marketing applications.

There are companies already analysing customer spending habits from data supplied by banks to formulate an advertising campaign for potential new customers. They see customers purchasing habits via a link to their bank issued card and then target advertisements through the customer’s online or mobile banking app. How more effective would the retailer campaign be if they could analyse down to line item level and focus their advertising accordingly?

A completely frictionless concept like EFRTS™ which links the retailer’s detailed receipt to the bank payment transaction would fit in nicely (i.e. giving a customer access to a digital receipt on their online or mobile banking app) and retailers would clearly have an upside through a very powerful advertising campaign if they deployed the right digital advertising solution.

An interesting idea was presented in a recent article Using Digital Receipts to Facilitate Loyalty Program Enrolment, where the writer suggests joining a retailer’s customer loyalty program post purchase via a single button click. It would utilise your bank’s ability to authenticate you, and therefore automatically fill in the blanks on the customer loyalty application form. If you combined this idea with storing digital receipts at your bank, how much easier would it be for the consumer and how many more customers would join the retailer’s loyalty program as a result?

So instead of perceiving such an idea as a threat, retailers should embrace this new digital age and at the same time give their customers access to a convenient digital receipt storage solution like EFRTS™ where their receipts can be stored safely, securely and privately.

By the way, if you are reading this blog and you are a retailer and you have an opinion about releasing receipt data to someone other than your customers, like a bank for instance, please get in touch at: and tell me what you think.

Friday, June 12, 2015

Some Frequently Asked Questions about EFRTS™
By Mark Johnson – CEO Receipt Reliance Pty Ltd

Following on from  TheBig Picture On Digital Receipts and Digital Receipts At Your Bank WIIFM  (see below) - articles that outline the concept of EFRTS™ and the major benefits for consumers, merchants and banks – here is a list of Frequently Asked Questions that I have received to date.

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Q: What is EFRTS™?

A: EFRTS™, or Electronic Funds & Receipt Transfer System is an idea for a system and a method of capturing receipt data electronically at point of sale, either in-store, online or in-app, and then transmitting that digital receipt data to a storage location at the customers bank or to another storage location that can be accessed by the bank. When implemented, the digital receipt will be linked to the payment data that is already available to customers now via their online/mobile banking facilities and could be viewed, sorted, printed or emailed as required.

Q: What happens with cash tenders?

A: EFRTS™ does not cater for payments made with cash; a card transaction (physical card, mobile or in-app) must occur if a digital receipt is to be sent to your card issuing bank. If cash is used, then as is the case currently, a paper receipt may be issued if requested. If you don’t favour any particular means of payment, then you may be inclined to adjust your habits and use less cash and pay with your debit or credit card more often so that you can have the convenient access to a digital receipt which is safely and securely stored at your bank.

Q: If I have multiple bank accounts, will I have to look in more than one place for my receipts?

A: Yes, though generally most people have a limited number of accounts to keep track of whereas trying to remember every merchant you purchased something from and what digital receipt solution they use , would be much more difficult.

Q: What happens if I switch banks, how will I access my old receipts?

A: This is a common question I receive. Currently, if you close an account with a particular bank, you typically no longer have access to your transaction history for the account you had, and as your receipts would be stored against those transactions, the ability to access those receipts via online banking may also be unavailable. However, I expect that banks will enable the export of receipts in much the same way as they do for transaction history today.

Q: What do I mean by ubiquitous with regard to EFRTS™?

A: For EFRTS™ to be effective it needs to be everywhere - ubiquitous. Regardless of what POS (point of sale) system a merchant is using, or even what country you’re in, when a non-cash purchase is made your payment transaction finds its way back to your bank, and with EFRTS™ implemented, so would your receipt.

Q: Why is it important for the digital receipt attached to my transaction to look just like one the merchant might have printed in store rather than a generic list of items?

A: There are a number of reasons why this is important:
Ease of identification of the merchant via their unique receipt design or store logo, Ease of identification by the merchant when a customer wishes to make returns or exercise warranty rights. Marketing opportunities for the merchant via receipt design plus offers, vouchers and coupons will be preserved as part of the receipt to enrich the post sales experience for both the shopper and merchant. Tax Office requirements (Refer next question). Data for linking, PFM (Personal Financial Management) and analytics purposes can easily be extracted separately and sent back to the bank along with the digital receipt image. Alternatively, once captured, the data could be taken from the digital receipt image back at the bank.

Q: Are digital receipts accepted by tax offices?

A: Yes, subject to certain conditions common to most tax offices such as provided they are a true and clear re-production of the original receipt as generated by the merchant, flow directly to the owner or the owner’s nominated custodian of the receipts (in this case the bank) without modification. For example refer to Australian Taxation Ruling TR 2005/9 in particular sections 25, 35, 36, 57 and 58 via this link.  Many other countries have similar rulings.

Q: Apart from being a tax office requirement in some countries, why is it important for the digital receipt attached to your transaction to be unmodifiable once it leaves the POS?

A: For any new system like this to be adopted by consumers there must be a high degree of trust in it. Currently, when a customer is handed a paper receipt after a purchase, that is their proof of what they bought and it cannot be modified or changed by anybody else once they have possession of it. Customers (and merchants), will want the same for a digital version of their receipt. When a digital receipt is generated at the POS (whether that be a physical POS, or virtual as in the case of an online purchase or via a payment button in-app), it should not be able to be manipulated or changed in any way once issued. This reduces any opportunity for error and/or fraud to occur. 

Q: Would I have to pay a fee for this digital receipt service from my bank?

A: Ultimately that decision will be made by each bank. In my experience though, most people don’t mind paying for something as long as it is value for money. Unlike many bank fees and charges that are often perceived as concocted with no real link to the cost of providing a service for the fee charged, this digital receipt solution is a real and tangible product banks could offer their customers to make their lives easier.

According to research conducted by Dan Gellar on behalf of MRI (Market Rates Insight) and referred to in this article, and as stated by Dan Gellar on a previous episode of the radio show, Breaking Banks, approximately 50% of bank customers are willing to pay up to $120 per annum for a range of new and useful services that improve and add value to their lifestyle. The EFRTS™ digital receipt solution would certainly fall into that category.

Alternatively, banks may wish to offer this service free of charge with costs offset against savings in fraud losses, inter-bank fees and customer service inquiries to name a few. Early adopters would attract new customers and give their existing customers incentive to stay with them, thereby strengthening their customer base.

Financial industry experts predict that the next ten years could see banks relegated to ‘back end pipes’ if they don’t remain agile and embrace and adapt to the incredible amount of innovation taking place in the payments landscape. New offerings must solve a problem or address a pain point without adding friction; the storage and management of receipts is an issue in need of an innovative solution like EFRTS™.

Q: Will I have to register my credit card number anywhere to receive digital receipts?

A: No, you will not have to register your card details with any third party as your bank already holds all the necessary information.  Understandably, consumers want to guard their online privacy and are increasingly reluctant to give out personal and/or financial information that could be compromised via a data breach.

All you’ll need to do is let your bank know that you wish to ‘opt in’ to receiving digital receipts. Of course depending on the merchant, you will still be able to receive a printed receipt if requested, but you would also receive a digital copy stored safely and securely at your bank.

Q: What sort of spin off services do you foresee banks being able to offer customers as a result of implementing EFRTS™?

A: Immediately I think of enhanced merchant information with perhaps a link to the merchant website, enhanced product information with a link to the manufacturer’s website, and perhaps warranty alerts when a product warranty is nearing expiration or a product recall is in effect. Imagine including receipts in bank feeds to your accounting software already attached to their respective transactions with 100% accuracy…saving time, reducing friction, adding convenience.

In the future, POS systems will become commonplace in all businesses where a receipt has to be issued. Banks will offer new sorting and classification tools, will build stronger alliances with solution vendors and it will be another major step towards a completely paperless financial system. This is what going digital is all about.

Q: How did you come up with the idea for EFRTS™?

A: EFRTS™ was inspired by a dream I had back in 2009. In this dream I had been shopping and upon leaving the store I was questioned by security staff about my receipt. The receipt was not in my shopping bag with the goods which prompted the security person to ask me to step back inside the store for further investigation, the implication being that I may have stolen the goods.

In my dream, there was a public computer terminal available and I was able to log into my online bank account and find the payment transaction I had just made in the store. Then by ‘double clicking’ on the payment details a digital image of my store receipt appeared on screen and from there I was able to print it. I showed the printed receipt to security staff and I was allowed to leave the store.

As I lay half asleep contemplating what a bad experience it had been, I remember thinking “thank goodness for digital receipts”. However, as I woke up and reality hit, I realised that we don’t have digital receipts stored at our bank.  Given that we have the internet, email and digitisation of all sorts of documents already, it seemed only logical to have digital receipts too. My thoughts were that we trust banks with our money, why not our receipts as well.