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Given that I’m in the payments industry (and a certified nerd, according to many), it may not surprise you to learn that I thoroughly analyze my own personal transactions each week in an ongoing effort to improve my spending habits. I began using Finance Works recently in order to add some automation to the process. The application, similar to Mint.com, enables me to pull all of my transaction information into a single view, categorize individual transactions as I see fit, and track my categorical spend (Do I really spend that much at Red Box???).
The program is an amazing spend management tool, but, like any data mining tool, its effectiveness is constrained by the quality of the data it mines. In the case of Finance Works and Mint.com, the constraint is lack of line-item purchasing information consumers can obtain from a credit or debit card transaction.
For instance, I buy both groceries and dog food at the same store. But without line-item purchasing information about the transaction, I must “blindly” make the decision to categorize the $30.00 I spent at Sunfresh as either “Groceries” or “Pet-Related Expenses” (or refer to paper receipts and split the amount among the two categories, but even I have my limits). And assigning an erroneous category to the transaction undermines the accuracy of the pretty little pie charts I enjoy reviewing so frequently on Finance Works.
And that’s just me. Imagine the implications of missing out on line-item purchasing information if you were responsible for spend management at a corporation! It’s no wonder private label commercial cards and P-Cards that offer line-item transaction details have grown in popularity. Maybe one day this will even give way to line-item data for consumer card transactions. Until then, my pie charts and I will just have to do without.
Monday, December 21, 2009
Social Purchasing: The Next Big Thing?
On December 11, a new service called Blippy launched in beta. The premise of Blippy is to automatically push information regarding the transactions you make with a credit card online – for the world to see. CNet News has titled it “The Twitter of Personal Finance.” In theory, I assign a credit card account to my Blippy profile and each transaction I make with that credit card is updated to my Blippy stream and shared with my network. Eventually, Blippy plans to include a feature to automatically update your Facebook or Twitter accounts as well.
It will be an interesting project to watch. Certainly the idea of transaction tracking isn’t new – especially at the corporate level. Multi Service clients have been utilizing fuel cards to track driver locations and fuel consumption for thirty years. Fleet operations managers and business procurement managers utilize Level III transaction data and reporting to manage maintenance trends and business costs. Could a social streaming platform for personal finance management be the next big thing?
It will be an interesting project to watch. Certainly the idea of transaction tracking isn’t new – especially at the corporate level. Multi Service clients have been utilizing fuel cards to track driver locations and fuel consumption for thirty years. Fleet operations managers and business procurement managers utilize Level III transaction data and reporting to manage maintenance trends and business costs. Could a social streaming platform for personal finance management be the next big thing?
Giving and Receiving
I love eBay. Jenny introduced me to the site almost two years ago, and I have fallen in love with it – especially this holiday season. For the first time in my life I was done with holiday shopping two weeks before Christmas.
While paying for some of my purchases with my PayPal account, though, I noticed that I had the choice to either pay with my AMEX card or to debit my bank account directly. If you check the eBay site, it gives you all the clues that they prefer to debit your bank account directly – presumably to avoid the high fees that AMEX charges. It works similarly to the way our private label accounts do with much lower transaction fees for the merchants than accepting P-Cards, but there is a key difference. Many of our private label clients offer their customers incentives to utilize a private label card over a P-Card.
If PayPal would have offered an incentive to me to debit my bank account, I probably would have chosen to debit my bank account. Because they didn’t, my AMEX rebate was the clear choice.
Certainly, reminding customers that they have the option to use a payment method that is cheaper to the merchant to accept is a no-brainer, but actually incentivizing customers to utilize the cheaper payment method is something that is easily overlooked. So this holiday season, remember, to pass on (at least some) of those savings. You’ll likely earn more in the long-run.
SIDENOTE: The Payment Puzzle Box will not have a post on Monday, December 28th. Multi Service customer service will run as usual through the holidays, and Jenny will return with her next post on Monday, January 4. In the meantime, Happy New Year!
While paying for some of my purchases with my PayPal account, though, I noticed that I had the choice to either pay with my AMEX card or to debit my bank account directly. If you check the eBay site, it gives you all the clues that they prefer to debit your bank account directly – presumably to avoid the high fees that AMEX charges. It works similarly to the way our private label accounts do with much lower transaction fees for the merchants than accepting P-Cards, but there is a key difference. Many of our private label clients offer their customers incentives to utilize a private label card over a P-Card.
If PayPal would have offered an incentive to me to debit my bank account, I probably would have chosen to debit my bank account. Because they didn’t, my AMEX rebate was the clear choice.
Certainly, reminding customers that they have the option to use a payment method that is cheaper to the merchant to accept is a no-brainer, but actually incentivizing customers to utilize the cheaper payment method is something that is easily overlooked. So this holiday season, remember, to pass on (at least some) of those savings. You’ll likely earn more in the long-run.
SIDENOTE: The Payment Puzzle Box will not have a post on Monday, December 28th. Multi Service customer service will run as usual through the holidays, and Jenny will return with her next post on Monday, January 4. In the meantime, Happy New Year!
Monday, December 14, 2009
Decentralized Billing: Supporting Personal Romance and Good Business Practice
My husband Aaron, a culinary instructor, took a trip to Korea to study Korean cuisine this past summer. Aaron had planned a wonderful surprise for me while he was away. He coordinated with my closest girl friends and my mother to arrange for a scavenger hunt that would lead me to a beautiful antique ring. And it all would have worked exactly according to plan, had it not been for one minor detail – I noticed a rather large debit transaction to a jewelry store post to our bank account.
The situation spurred me to consider how we could rearrange our finances to allow for increased independence (and future surprises!). It dawned on me that this is precisely the appeal of decentralized billing for commercial customers. Decentralized billing allows for one customer to segment a single account into various “children” to accommodate different offices, regions, departments, and more. As a result, each child account can access a particular portion of the customer account’s credit line, receive individual bills for the purchases their specific child account makes, and even pay for those bills independent from other children accounts.
In the commercial trucking industry, and many other industries as well, this decentralized billing is in high demand. Fleets request decentralized billing in order to allocate larger portions of their credit lines to groups of drivers who have longer hauls than local teams, for instance, or to enable regional offices to review, approve and ultimately pay for purchases that employees within their jurisdiction make.
In my humble opinion, a commercial accounts program without decentralized billing is a bit like a truck without a trailer. It may drive like a charm, but it won’t allow you to realize the full potential of your investment. And as for my connecting a gift from my husband to decentralized billing? Well, I guess no one will accuse me of being a romantic on this one.
The situation spurred me to consider how we could rearrange our finances to allow for increased independence (and future surprises!). It dawned on me that this is precisely the appeal of decentralized billing for commercial customers. Decentralized billing allows for one customer to segment a single account into various “children” to accommodate different offices, regions, departments, and more. As a result, each child account can access a particular portion of the customer account’s credit line, receive individual bills for the purchases their specific child account makes, and even pay for those bills independent from other children accounts.
In the commercial trucking industry, and many other industries as well, this decentralized billing is in high demand. Fleets request decentralized billing in order to allocate larger portions of their credit lines to groups of drivers who have longer hauls than local teams, for instance, or to enable regional offices to review, approve and ultimately pay for purchases that employees within their jurisdiction make.
In my humble opinion, a commercial accounts program without decentralized billing is a bit like a truck without a trailer. It may drive like a charm, but it won’t allow you to realize the full potential of your investment. And as for my connecting a gift from my husband to decentralized billing? Well, I guess no one will accuse me of being a romantic on this one.
Monday, December 7, 2009
Charging Fair Prices
I came across this article the other day and thought it offered some great advice for companies struggling to monetize the intrinsic value of their products.
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