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?'.

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: http://www.receiptreliance.com/share.html and tell me what you think.

www.receiptreliance.com

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. 

Digital Receipts at Your Bank: WIIFM?

(What’s In It For Me: Consumers, Banks, Merchants?)

Mark Johnson CEO Receipt Reliance Pty Ltd

In this digital day and age it is quite surprising that the practise of giving paper receipts for purchases is still the norm. The argument of paper vs. digital receipt has been the subject of many discussions in recent years and while some people would still like the opportunity to receive a paper receipt if requested, it seems the majority are in favour of receiving digital receipts. Determining the best way to deliver and store them is now the focus. 

In a previous article The Big Picture on Digital Receipts, I talked about some of the more common digital receipt solutions that have emerged to date and although these solutions are a welcome step forward, I feel they still fall short from a consumer perspective. I put forward an alternative idea whereby digital receipts are stored against their respective payment transactions at the consumer’s bank or financial institution.

Why is receipt storage at your bank more attractive? To answer that, let’s look at ‘What’s In It For Me’ for the three main parties involved; Consumers, Banks and Merchants.

From a Consumer perspective, this idea is invaluable.

The most immediate advantage would be that consumers can receive a digital receipt without any change to how they currently make a card purchase, other than not having to wait for a receipt to print.

They won’t be required to:

·         give out an email address,

·         have a smart phone and have downloaded any number of apps (depending on merchant choice),

·         ensure they have enough storage on their smart phone or PC,

·         register their  card number with a third party,

·         create a cloud storage account with a third party (depending on merchant choice),

·         join loyalty programs if they do not wish to do so.

This idea offers simplicity, security and privacy. It gives peace of mind knowing that receipts for tax and/or warranty purposes are always available; even those receipts that you may have discarded in the past but now find you need.  In the event of a tragedy such as a house fire, your bank would act as your fireproof box for all your receipts and could integrate with your insurance company to streamline and expedite the claim process.

It will allow for improved integration of receipt data with PFM (Personal Financial Management) tools and accounting packages, minimizing consumer effort therefore saving both time and money.

This idea provides consistency and reliability no matter where in the world you make a purchase. Consumers would be able to easily access all their card receipts by simply viewing their bank account from any device.

Current digital receipt companies offer a variety of receipt storage locations such as email, cloud, smart phone or combinations thereof. One thing many have in common is that they offer great tools for the merchant to design receipts that can include offers, coupons, dynamic links to promotions or feedback; a whole range of enticements for their customers. With a ubiquitous bank storage solution, these companies wouldn't have to hedge their bets on which storage solution will be the most popular in the long run; rather, they would be able to  focus on what differentiates them from the next company with regard to receipt design, marketing, loyalty and analytics functionality. Merchants would be free to choose from a range of solutions without being concerned about their customer’s approval regarding the receipt storage location. Consumers would have the best of both worlds; they could receive digital receipts stored in one secure and private location, without having to give out any personal information.

From a Bank’s point of view there are also many benefits. 

The flow on effect from enhanced KYC (Know Your Customer) data will be extremely valuable. Increasingly we are seeing banks becoming more customer-centric with a focus on providing ways to save their customers money. The more a bank knows about their customer, the better position they will be in to offer tailored products to meet their specific needs, while still offering their high level of privacy and security.

PFM tools offered by banks are designed to increase customer satisfaction and loyalty, thereby retaining and strengthening their customer base, however these tools have had a slower than expected take up over the last couple of years. People generally like the idea, but if they require too much work from the user they can be confusing and also become a chore - their shortcomings can outweigh their usefulness.

More and more we are seeing innovative companies like Moven partnering with banks to offer digital products that help customers track and manage their spending in real time; they provide automatic categorization of purchases along with a user friendly interface and relevant and timely advice. Whilst these tools are evolving and becoming more sophisticated, they could be even more effective if they were supplied with the merchant receipt detail of each purchase as well. Without it the financial insight provided can be flawed.

Take for example, a purchase at your local department store consisting of a couple of shirts, some DVDs and perhaps some glassware.  The purchase should be split into 3 categories; clothing, entertainment and household goods to give a true picture, however at the moment they would be put together into one category. Some banks and PFM vendors do offer users the option to split transactions across categories, but this is a manual process, and after the event; it does not allow for accurate real-time insight and advice which is key.  Digital receipt storage at your bank would certainly have the knock on effect of enhancing PFM tools.

Fraud detection could be greatly improved if this idea is implemented as it would increase a bank’s capability to quickly detect suspicious account activity; the additional savings to banks and ADI’s from reduced card fraud could be significant.

We’ve all looked at our transactions and now and again wondered what a particular payment was all about.  In many cases, the merchant information contained at the payment transaction level is not informative to either the consumer or the bank and as a result, consumers are inclined to call their bank to clarify payments associated with unfamiliar business names. Being able to quickly and easily identify the merchant via the receipt details will result in lower call centre volumes for banks and less interbank service fees.

By providing receipt storage and management for their customers, there is also the opportunity for banks to charge a small fee for this service and thus introduce a new revenue stream. Most people don’t mind paying for something that is value for money.

For banks, improving and personalizing the relationship they have with their customers is paramount.  The last few years have seen a massive amount of innovation taking place in the financial technology space and if banks are going to survive and flourish in the long term, they must find ways to attract new customers and give their existing customers incentives to stay; offering a new and innovative product like digital receipt storage would help them do that.

Finally, let’s look at some advantages for the Merchant.

Imagine two merchants side by side offering more or less the same products.

They both offer digital receipts however at store A, in order to receive a digital receipt, the consumer must supply the merchant with some personal information (as listed previously), create a login for an online cloud account or download one of many mobile apps to their smart phone. 

At store B, they simply pay using their card as usual (whether that is with a physical plastic card or a digital one stored on their phone or wearable), and that’s it. Their receipt automatically goes with the payment transaction to the bank.

I know which merchant I would choose. 

This digital receipt storage idea would provide merchants with a new and innovative way to attract customers and improve POS efficiency. Merchants will also benefit from reduced liability by storing less personal consumer information that could be compromised in the event of a data breach.

There are several other advantages but firstly let’s look at some perceived obstacles. Merchants have traditionally been reluctant to disclose sales and marketing information to third parties without some contractual arrangements to back up the trust required in such a partnership.  A major concern would be the possibility of their competition getting access to their data and using it against them in a commercial sense. When a merchant engages with their POS vendor or third party supplier to deploy a customer loyalty programme, commercially sensitive information is revealed in return for data analytics that they can use to further enhance their business. Many of these programs rely on collecting personal information from customers by having them join a frequent shopper club or similar, in return for offers, gifts, discounts and privileges when shopping with that merchant. Of course many customers are deterred by the prospect of disclosing personal information and choose not to participate.

Currently there are a variety of receipt delivery and storage locations offered, depending on what each individual merchant has chosen, so it can be quite difficult from a consumer’s perspective, to keep track of it all. Once the receipt has been generated and is ready to be issued to the customer, does its final storage location really impact the merchant per se? It certainly matters to the customer from a convenience point of view. In any event, the point here is that the ‘customer copy’ of the receipt data is already leaving the merchant’s environment and can be used by the customer as they see fit.

 The key question then for merchants would be “What percentage of their card paying customers are willing to give out some personal information to receive a digital receipt?” I’d hazard a guess that the average would be a lot less than 100%; probably less than 50%. Surveys have shown that when it comes to consumer trust, financial institutions score well. Most people would acknowledge that their bank already knows where they shop and to an extent, the type of things they’re buying. This leads me to surmise that the majority of consumers would trust their banks to store their receipts.  Depending on the opt-in arrangements each bank may have, merchants would be able to get their offers and coupons to close on 100% of their card paying customers.

An interesting idea was presented in a recent article Using Digital Receipts to Facilitate Loyalty Program Enrollment, where the writer suggests joining a merchant’s customer loyalty program post purchase via a single button click. (It would utilise your bank’s potential ability to authenticate you). If you combined that 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 merchant’s loyalty program as a result?

With the advent of new apps like Square Register and offerings such as Pi, Albert and Leo from the Commonwealth Bank of Australia for example, smaller merchants who cannot afford to invest in a more comprehensive POS system or customer loyalty program will also be able to benefit. These products turn the mobile device into a combined sales register and payment terminal and would provide the digital receipt generating engine that will open the door for SMEs to offer this innovative solution to their customers.

I think merchants have little to lose and a lot to gain if they were to embrace this idea.

The concept of storing digital receipts with their respective payment transactions could be implemented globally to the great benefit of consumers, banks and merchants. Although ubiquitous, it still allows for merchants and banks to differentiate themselves by the choices they make regarding POS systems, receipt design and marketing companies, loyalty programs and PFM products. 

It’s a win for all parties involved.

The Big Picture On Digital Receipts

By Mark Johnson

What’s happening with digital receipts? The answer to that is – a lot. The last five years or so have seen an explosion of ideas surrounding the capture, management and storage of digital receipts. There has been a mad rush by start-ups and merchants trying to capitalise on the enthusiasm typically generated by a new and innovative concept and it seems, in the process, they have… Read More

Introducing EFRTS

Imagine a system where all your card payment receipts are sent to your bank account as digital receipts. Imagine being able to select any particular transaction and see all the details associated with it as a complete receipt, just like the paper one would have been in the store. Add in options such as 'Save', 'Print', and 'Email' to give you complete control and flexibility.

We trust banks with our money - lets trust them with our receipts.