TBT: Facebook hasn’t learned much since the Instagram fiasco in 2013

Originally posted Feb 12, 2013. Facebook had just acquired Instagram—and PR mayhem had ensued. I suggested five takeaways from the experience. Seven years have passed, and Facebook is still tripping on its untied PR shoelaces. I guess Zuckerberg doesn’t read my blog. Especially as regards Lesson 5 below.

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You know the tale: Facebook acquired Instagrammembers inferred from the revised agreement that advertisers could use their photos without paying or obtaining permissionFacebook replied, in essence, “No, no, no, you misunderstand, we would never do that”; Facebook changed (“clarified”) the user agreementInstagram subscribers left en masse; and pretty much no one blamed them.

A modicum of common sense PR-wise should be required for anyone working in any area of marketing communications. This should be especially true in interactive marketing, given its pervasiveness. But apparently someone at Facebook was running a modicum or two low at the time.

I offer the following lessons from the Instagram fiasco:

Lesson 1: When you acquire a company with high customer involvement, hold off on making changes for awhile. Customers don’t experience much angst when you acquire a coin-op laundry. When you acquire a company like Instagram, which people love as-is, and you’re Facebook, which has a reputation for pushing through unpopular changes, customers might just need time to develop a little trust that you won’t rush in and spoil their fun.

Lesson 2: Don’t expect people to believe the unbelievable. For all I know, Facebook really didn’t intend to let advertisers use member photos. Trouble is, the masses didn’t seem to buy the denial. Facebook would have done better simply to say, “We hear you, we’re sorry, we made the change you asked us to make, and we learned our lesson.” (More on showing “lesson learned” in a moment.) Recall that when the Coca-Cola Company unleashed fury upon replacing Coke with New Coke, they didn’t waste time whining about being misjudged. They apologized and brought back the original—with lightning speed. Only later, to the suggestion that they had masterminded the whole thing from the start, did they reply, “We are not that dumb, and we are not that smart.

Lesson 3: Imagine possible consequences before you act. On the other hand, suppose Facebook truly had intended to let advertisers use member photos. Not much genius would have been required to anticipate objections, re-think the decision and avoid a mass member bailout.

Lesson 4: Find a smarter way to the same end. Throngs routinely and willingly plaster their mugs all over the web. If Facebook really, really wanted to allow use of member photos in ads, chances are all they had to do was offer an opt-in with a modest spiff or payment in return. Participation could well have become the “in” thing to do.

Lesson 5: Show by your actions that you have learned your lesson. As mentioned above, Facebook has a history of making unpopular changes, user protests notwithstanding. In the wake of the Instagram fiasco, it’s not surprising that Facebook’s good faith claims are being met with skepticism.

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When do we want it? Now!

FastcashCrazy humans. Seems like we’re never satisfied.

If you don’t believe me, ask Abraham Maslow. According to his Hierarchy of Needs, which hardly needs introduction, as soon as we satisfy basic needs like air, water, and food, we up our expectations to things like security, revenue, health, and possessions. From there we seek friendship and belonging. Then respect and freedom. And then self-actualization. 

One human drive that Maslow seems to have overlooked, however, is instant gratification. When we want something, we want it now. No matter if only a couple of decades ago we were satisfied with a quaint “Please allow four to six weeks for delivery”; nowadays, every time industry figures out how to speed up delivery of that sweater, mug, pizza—or payment—we only want it faster.

Take, Amazon, which is getting really serious about same-day delivery. CFO Brian Olsavsky, as reported by PYMTS.com … 

… told investors that the costs of one-day shipping during Q4 had come in “slightly under” $1.5 billion, and noted that Amazon plans to spend $1 billion more on the initiative during Q1, and “again in [the second quarter].” He added that he fully expects that “we’ll start to lap this,” and costs will become more efficient as volume grows, new routes are put into place and additional delivery technology is added into the mix.

It seems that it was only impressive for a little while when Amazon could deliver that mug in a week, and later, in a few days. It will be interesting to see how online merchants who don’t have $2.5 billion to invest over six months toward speeding up delivery will compete.

There aren’t many industries that our desire for instant gratification hasn’t hit. 

We want our pizza now. And it better arrive hot. Not only that. We want to know how close the driver is to our home right now. It’s no wonder that, with its commitment to speeding things up and keeping customers informed, Domino’s has long claimed to be “a technology company that happens to make pizzas.” 

And we’re no longer content with just pizza delivery. DoorDash and Uber Eats have trained us to expect dinner of any sort, from any restaurant, ready to eat, and arriving in record time. This has brought about an unexpected problem for parents. A recent Wall Street Journal article highlights a new trend among teens—an annoying one, according to their parents—of ordering food online when the planned family dinner doesn’t appeal.

Our desire for instant gratification extends to music, audiobooks, and books. We want to download them now. And we want to stream movies now. We binge watch because we want the season finale now. Indeed, our society only recently coined binge watch with the advent of streaming. A related new term is Netflix cheating, which Urban Dictionary defines as “Netflixing a TV series with your spouse/friends/significant other, and watching episodes while the other party is out.” Apparently Netflixing as a verb has made its way into the lexicon as well.

We want McDonald’s to log our order before we arrive and start on it the minute we pull into the parking lot. We want grocery stores to fill a (literal) shopping cart, ring up the total, collect our payment, and have our groceries bagged and ready for pickup when we arrive.

Even home buying is going digital. Online real estate brokers like Prevu (which, if anyone cares, is French for “foreseen”) and Rex (while I’m at it, that’s Latin for “King”), whose home pages look remarkably alike, speed up the process by letting buyers browse properties online, involving an agent only when they’re good and ready. Agents are not commissioned but salaried employees. Both services return two-thirds of the buying agent’s standard commission to the buyer.

These days I am loath to declare any product or service impossible to buy and sell online. It wouldn’t surprise me if in time we figure out how to stream haircuts, pet grooming, and carwashes. 

Instant gratification in the payments world 

Not to be overlooked, we want our funds to show up in real time. No more of this two to three business days stuff. 

Hence services like Zelle, Venmo, Square, Quickbooks, and others are introducing instant or near-instant deposit services. This is, in fact, an opportunity for them to increase fee revenue, since these companies can tack on an additional fee for accelerating the process.

Not to be outdone, Mastercard has introduced its Bill Pay Exchange, which “which will enable real-time payment confirmation and automated reconciliation for the biller,” and Visa is promoting Visa Direct, which “enables fast payments to over a billion cards worldwide.”

Notwithstanding my leading the prior paragraph with “not to be outdone,” well, Fiserv may well be outdoing them. Its new CheckFree® Next™ incorporates intuitive suggestions and increased automation. Two top 10 U.S. financial institutions have already piloted it. According to a Fiserv press release,

The real-time capabilities of CheckFree Next [already] include instant notifications and, later in 2020, will include real-time money movement … 


… allow bill payers to receive enhanced notifications that allow payments to be made in real-time and instantly reflected in their accounts.

Same Day ACH transactions are steadily on the rise. They reached $51 trillion in 2018. Expect to see the momentum increase when per-transaction limits next month increase to $100,000. And in March of next year, a new rule will allow “Same Day ACH transactions to be submitted to the ACH Network for an additional two hours every business day.”

We haven’t yet reached a point where payments arrive before they’re sent. But at this stage I wouldn’t rule out anything.

Disclosure: I work for Fiserv. Who could blame you if you envy me?

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It’s time to own the payment relationship. But hurry. (TBT)


First posted May 28, 2015, adapted from my article for Credit Union Magazine.

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IT’S NO LONGER NEWS that payment relationships are a, if not the, wave of the financial services future.Experts have harped on the subject ad infinitum. People like me have harped on it, too.

Part of the message seems to have gotten through loud and clear. Financial institution decision makers are well aware that rising adoption trends attest to demand, and that being slow to supply risks losing business to speedier competitors. It is no idle threat. As mobile options supplant in-person transactions, it becomes easier for once-loyal clients to disengage and defect.

The reader needs no reminder of the value of sticky products, and payment options are proving themselves among the stickiest. Stickiness aside, they offer a wealth of behavioral data sure to make your marketing research people giddy with anticipation. Meanwhile, your CFO will delight in a new, substantial source of fee income, because clients don’t seem to mind ponying up for payment services. They’ll even gladly pay a little extra when they need a premium service like, say, a same-day transaction. I cannot recall another time in our industry when customers actually paid fees willingly.

So if the bottom line matters, you have plenty of reason to offer a full complement of payment services.

But the part of the message that doesn’t seem to have gotten through quite as loud and clear is the urgency not just to offer a full complement of payment solutions, but to out-and-out own the entire payment relationship.

The payments industry is splintering faster than a living room window in a fight with a baseball. And not just credit unions and banks have stepped up to the plate. A growing list of nonbanks like Google and PayPal and myriad merchants and utilities offer easy-to-use payment portals of their own. Every payment relationship a member sets up outside your portal weakens stickiness, and misses profit, longevity, and data mining opportunities.

It’s not too late. Clients still rate traditional financial institutions highest when it comes to payment providers. But that’s fast eroding. In its April 2014 North American Consumer Digital Banking Survey, consulting firm Accenture asked respondents how likely they would be to bank with nonbank companies if those companies offered banking services. Fifty percent said they would bank with Square, 41 percent with PayPal, and 31 percent with T-Mobil. Costco, Apple, Google, Amazon, AT&T, and Sprint all came in in the 26 to 29 percent range. Even at the low end, which isn’t all that low, this is sobering if not downright scary news for traditional financial institutions.

One problem with stickiness is that it works both ways. When a client engages with an outside portal, winning back that piece of the client’s business becomes all but impossible—assuming you even know about it. The best strategy is to enroll members and exceed their demands early, rendering needless all offerings from competing institutions and nonbanks.

I admit that owning the entire payment relationship is easier said than done. It calls for vision, commitment, resources, expertise you may not currently have in-house, and aggressive marketing. But the gargantuan nature of the task does not make it any less imperative.

There remains for financial institutions a small window of time in which set up or purchase and then market payment systems that are easy for clients to adopt and use. Though small, a window it is. I recommend leaping through it poste haste.


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The well-worn payment device

SmartwatchNow and then a product comes along that, seemingly overnight, proves indispensable, even though we had seemed to manage quite well without it before. The automobile comes to mind. So does Egg McMuffin. And, for a while, fidget spinners.

But at least people could readily grasp what automobiles, McMuffins, and fidget spinners were good for. This year marks the ten-year anniversary of a now-ubiquitous device initially greeted with a mix of curiosity, enthusiasm—and bafflement—as to why, exactly, anyone would want much less need one.

I refer to none other than iPad. On April 3, 2010, Apple Stores throughout the country opened their doors to lines of customers who had camped outside, eager to score one of the new tablet thingies on Day One. Observers weren’t sure what to make of the campers or of the device. Exactly one week later, NPR news-quiz show Wait Wait Don’t Tell Me quoted Steve Jobs’s diminutive description of the device (surely one of many times Apple’s marketing department wished they could muzzle him): “I’ll let you in on a little secret,” Jobs had said. “It is just a big iPhone without the phone.” When the call-in participant revealed that she happened to number among the first wave of iPad owners, host Peter Sagal quickly followed up, “It’s amazing. Immediately we go from like, you know, posture of mockery to, ooh, you have one?”

All posture of mockery was short-lived. iPad, I hardly need point out, was a hit. Not that it was the first tablet to come along. Many a lesser creature preceded it. Among these were Kindle, whose functionality at the time was limited to displaying books; and Palm Pilot, which was cool because you could hot sync it to your computer. But iPad’s versatility readily eclipsed them all.

Then, for a followup, along came a new Why-On-Earth-Would-Anybody-Need-That product category. Namely, smart wearables—such as watches, wristbands, and earwear. 

A few weeks ago,  PYMTS.com said:

The wearables global market is on track to ship 305.2 million units in 2019, up 71.4 percent from the 178 million units shipped in 2018. About 69.3 million smartwatches are expected to ship this year.

The growth of smartwatches as a category is encouraging for the payments industry, because a growing number of them support contactless payment via Google Pay. Warable.com lists 23 of them. As for contactless payment via Apple Pay, the number of smartwatches that support it is precisely what you would expect: one. I bet you can guess which one that is.

Encouraging as the growth of smartwatches is, and with it the growth of contactless payment via smartwatch, the leader in the wearables category is—drumroll please—earwear. MarketWatch reports:

Accounting for the majority of shipment volumes throughout our forecast is earwear, which is set to reach 139.4 million units this year and nearly double to 273.7 million units in 2023.

By “earwear,” MarketWatch isn’t referring to any old pair of ear buds or headphones. Rather:

For an earworn device to be considered a wearable by [International Data Corporation]’s definition, it must offer functionality beyond audio, like a smart assistant, health and fitness tracking, or audio experience enhancement.

I regretfully observe that “contactless payment” is patently absent from the above list of earwear capabilities. Perhaps that’s because, for security purposes, RFID chips must hover within an inch or so of readers, and few shoppers wish to contort themselves in order to rest an ear on a scanner.

Eclipsed though the smartwatch may be by earwear, MarketWatch projects that its future is nonetheless favorable:

69.3 million smartwatches will ship in 2019 and total volumes will reach 109.2 million units worldwide in 2023. Apple’s watchOS will remain in front throughout our forecast by a wide margin and function as the measuring stick against which all other smartwatch platforms are compared. Still, there is room for other platforms to grow: Android will have a strong following with kid-focused smartwatches; Samsung’s Tizen will cater to Samsung smartphone owners with features rivaling watchOS; and Google’s WearOS will benefit from having the longest list of hardware partners and the addition of Fitbit OS’s health and fitness capabilities.

For those inclined to ask what will they think of next?, perhaps it will be the contactless payment ring. In 2014, Hackaday writer James Hobson reported on a fellow who dissolved his RFID card in acetone, removed the chip, and reinstalled the chip with a new antenna on a ring. But don’t hold your breath. Until banks start issuing payment rings, anyone who wants one will have to DIY it. Not that I recommend trying. Indeed, more cautious DIY sites suggest obtaining—just in case—a duplicate card for experimentation purposes.

Meanwhile, Amazon is fast at work on the ultimate wearable. Ultimate, in that it’s a device that most of us already wear. Partnering with Visa, Mastercard, JPMorgan, and Wells Fargo, Amazon “plans to enable customers to connect their credit card information to their palms,” reports Finextra, “so they can complete purchases with a tap of their hand rather than their card.”

That’s palm as in hand, not tree. Though who knows? Maybe smart potted plants are next.

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TBT: In celebration of tax season and the 19th Amendment


Perhaps you heard: 2020’s tax seasons is upon us. You may also be aware that August of 2020 will mark 100 years since the adoption of the 19th Amendment, finally acknowledging women’s right to vote. It’s an issue that, like many, today makes us shake our heads to think it was ever hotly contested. It seems fitting, then, to share this post from last year.

In celebration of tax season:  How alcohol and women’s suffrage helped create the IRS

Toasting the IRS

I’m going to go out on a limb here and suggest that one of government’s brand values is not “up-to-date office equip­ment.” If you don’t believe me, ask if a PDF will do the next time your local government requests a fax. There’s a good chance the answer will be, “What’s a PDF?”

But when it comes to collecting money, the United States government keeps fairly well up with the times. In an age where our best prospects for digital payment adoptions are Millennials and younger, the folks in charge of the Internal Revenue Service introduced electronic filing way back in 1986. (Little known fact: Many working at IRS headquarters back then were not spring chickens.) Though taxpayer convenience may have been a motivator, I would suggest, at the risk of cynicism, that speeding collections and lowering costs may also have played a part.

Of course, you knew the IRS uses direct deposit. Here’s what you may not know:

The curious tale of how alcohol and the women’s movement led to the IRS

In 1913, a scant 73 years before the IRS began accepting direct deposit, the United States ratified the 16th Amendment, permitting Congress to impose an income tax.[i] Congress had already taxed incomes from time to time, but the 16 Amendment made its authority to do so official.

Ratification, however, had taken four years. During that time, the “income tax amendment” found a pair of allies who might, at first glance, seem unlikely: the Prohibition Movement and the Women’s Suffrage Movement. Indeed, passage of the “income tax amendment” laid the groundwork for Amendments 18 and 19, which, respectively, banned the manufacture, sale, import, and export of alcohol and gave women the right to vote.

It was largely women, with the support of sundry male Protestant ministers, who championed Prohibition. But before they could persuade the then all-male Congress to ban alcohol, a practical problem would have to be solved: Alcohol taxation, permitted under the Constitution as an indirect tax, accounted to a good 30 to 40 percent of the nation’s revenues. Before it could pass Prohibition, the government would need a new revenue source. Decades earlier, the Women’s Christian Temperance Union (WCTU) had already championed an income tax as the answer. Author Daniel Okrent cites it in his book Last Call: The Rise and Fall of Prohibition:[ii]

 … to those in the dry movement who understood political and governmental reality, imposition of an income tax was also an absolutely necessary step if they were going to break the federal addiction to the alcohol excise tax. This had been obvious to the leadership of the WCTU as early as 1883, when the editors of the organization’s official organ, The Union Signal, coyly asked their readers, “How, then, will [we] support the government” if the sale of liquor is prohibited? The editorials had a ready answer for their own question: an income tax, they wrote, was “the most just and equitable arrangement ever made for the equalization of governmental burdens.”

The 18th Amendment, ratified in 1919, took effect in 1920. Chances are it was not lost on members of the U.S. Congress that Prohibition might displease a good deal of men, who now had the power to vote them out of office in retaliation. This was thanks to the 17th Amendment, passed two months after the “income tax amendment,” which took the election of the U.S. Senate and House out of the hands of state legislatures and placed it in the hands of voters. So perhaps giving women the vote with the ratification of the 19th Amendment in 1920, which just happened to be the same year Prohibition went into effect, was for Congress an act of job retention as much as or more than of fairness.

Prohibition, as you surely know, was an abject failure. About 11 months after the 19th Amendment accorded voting rights to women, the newly ratified 21st Amendment repealed the 18th Amendment. Once more, alcohol flowed freely through the land. The repeal, however, wasn’t a complete reversal. Congress left the federal income tax in place. So it is that the United States Treasury is able to have its tax and drink it, too.

I for one am grateful for the 21st Amendment. The Super Bowl just wouldn’t be the same without the Clydesdales.

[i] Utah, where I live, is one of six states never to have ratified the 16h Amendment. The other holdouts are Connecticut, Rhode Island, Virginia, Florida, and Pennsylvania. If you happen to live in one of them, I recommend against letting that stop you from paying.

[ii] Okrent, Daniel. Last Call: The Rise and Fall of Prohibition. Scribner, 2011.

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