Amex Sync launched this week. It is billed as a way of paying online, using a special hashtag. Their website describes it as “unique and seamless”. To use it, first you must sync your card at the designated website.
Do retailers and customers want another way to pay? Many online retailers are charging to use anything other than a debit card.
How about Paypal?
Paypal is a common way to pay online and despite a few hiccups here and there, is well-trusted. Set up a payment card and/or bank account and huzzah – you can pay online.
Even Paypal customers are now incurring fees to use it though – online train ticket retails www.thetrainline.com now charges over £2 to use Paypal. I’m sure they’re not the only ones.
There are lots of providers for retailers to choose from, whether it’s one provided by their bank or perhaps Worldpay, Sagepay, Paypoint or one of their kin. Paymentsense will accept £250k of transactions for £15 a month. There are a lot of choices.
Capgemini, RBS and Efma produced a report in 2012 that showed non-cash payments growing worldwide by 7.1% in 2010, with 2011 looking like a further 8.2% growth period. In 2010, more than one in three payments was made by debit card.
Mobile payments showed 2.1% growth, with the report suggesting that significant further growth in m-payments was likely. Much like recent reports from membership organisation The Payments Council, business small and large are wise to invest in mobile and online payment methods.
But are customers interested, if their chosen payment method works for them?
There have been (and continue to be) some fairly odd payment methods. With few exceptions they are essentially systems whereby the customer pays for some sort of currency with their usual online payment card and then has some sort of currency or voucher to use.
One more layer that I believe customers do not want. Some, such as Bitcoin, are real currencies with fluctuating values. Is that really a useful online currency or is it a gimmicky investment?
Is Amexsync really a payment gateway?
AmexSync is much closer to something like Groupon or Wowcher than something like Paypal.
It could be that it will evolve significantly – American Express are certainly the sort of organisation that have the power to mould it into a genuine contender in the online payments sector. For now, it is being used to promote a small number of special offers (have a look at this though more will be released this week).
If I’m on Ebuyer.com and I see a nice NAS that will help me out of a storage pickle, I’ll probably click “buy” and then use my debit card. I can’t see myself (or many others) checking a list of hashtags in case I can buy it for a tenner cheaper using a convoluted chain of Tweets that my followers will have to put up with until I have completed my transaction.
Even an Amex customer is surely going to pay with their Amex card rather than check some hashtags and use Twitter to use their Amex card, aren’t they? What if retailers love this and there are thousands of hashtags to check? It’s hard to find good things to say about this odd newcomer.
Then there’s the capacity for fraud. Airlines are heavy users of online payment systems, with multi-currency high-value transactions happening regularly. They see approximately 1.5% of their booking revenue to fraudulent transactions (according to Worldpay’s Perfect Passenger Payments report).
On February 2nd 2013, news reports of 250,000 Twitter accounts being hacked exemplified the fragility of using a social network (where people may be less disciplined when selecting a strong password) to facilitate payments (where people typically use a much stronger password).
Now, it could be that the system will be used for lower-value transactions but imagine receiving an Xbox 360 you didn’t order but did pay for (that’s one of the early deals available on AmexSync. Right now, criminals are defrauding consumers by intercepting deliveries paid for using dull, old fashioned debit cards.
If your Twitter account has been hacked, I’m betting they’ll find it relatively easy to figure out when you’re home and when they can await the postman knowing you’re at work. They’ll know which accounts to target because they will have searched for Tweets that reveal AmexSync purchases.
I’m not suggesting that AmexSync is uniqeuly or especially risky – I’m sure the levels of security are commensurate with an organisation of that size.
I’m just saying that while it’s important for business to invest in new technologies and make the most of opportunities to drive sales, it can’t be assumed that customers, with their ingrained behaviours and security concerns, will be as enamoured as those businesses hope.