Trust and Payments

by Patricia Hewitt 0

Reading an article about Tesco (a major UKretailer and provider of consumer financial services) acquiring asocial media company (Bzzagent) got us thinking about trust.Bzzagent works like a lot of social media companies, which is toexpand marketing strategies to include leveraging therecommendation aspects of social media. These companies generallywork by using consumer volunteers to sample products, thenencouraging them to post their opinions on social network siteslike Facebook, Twitter and YouTube.

Like many consumers today, checking out recommendations online isbecoming part and parcel of shopping, but what’s beginning to getfuzzy is how to determine which ones are unsolicited and which arenot? These are important questions to answer as more and moreconsumers are using social networks as shopping mall extensions.Understanding trust issues has a lot to do with safety, security,and privacy.

This past week, Netpop (a research firm focused on the onlineexperience) released survey results (http://bit.ly/kKBarZ)which indicated that 80 percent of consumers said that they feeluneasy or uncertain about the privacy of social network sites.These are the same social network sites that are rapidly movinginto the payments business, as either direct providers (likeFacebook Credits) or enablers (like Offermatic). Financialinstitutions in the U.S. should zero in on studies like this witheverything they’ve got to reinforce to their accountholders thevalue of transacting through a trusted source – their bank orcredit union.

But (and it’s a big but) it is these same FIs that also need toprovide an alternative product that is competitive and leveragesthe movement of spendable currency directly out of a consumersprimary cash account. Payment strategies like the one announced bythe big three banks, clearXchange, (http://lat.ms/m1bjXq) are not just important productdevelopments, they are essential to keeping the financialinstitution industry in the game.