The Search for the Credit Card’s Replacement: Part Two

by Alex Johnson 0

In Part One of the search for the credit card’s replacement, I evaluated Square’s payment product—Square Wallet. Before I dive into my next analysis, I must provide full disclosure. Moven is still in Beta and all of my impressions and opinions of both products are based on using them for a short time in a comparatively rural city (Bozeman, MT).

Moven was founded by Brett King, the author and frequent keynote speaker best known for his compelling arguments against the future of branch banking. In place of the branch-centric model of banking, Brett has built Moven—a digital front-end banking service that promises a smarter, more convenient way for consumers to “spend, save, and live.”

Account Opening and Set-up

Moven was a little harder to set-up than Square. I downloaded the app to my iPhone, but I was forced to complete the account opening process on a computer, which seemed a little weird given how passionate Brett King is about the potential of mobile devices. I filled in my personal information and answered a few out of wallet questions and…wasn’t instantly approved. I had to email Moven a picture of my driver’s license and wait for a week for them to confirm I was who I said I was. Not exactly the instant account opening experience I was hoping for.

Once my account was created, I had to link in my checking account because Moven (unlike Square) works like a debit or prepaid card where you actually transfer money to the account. The additional two days it took to confirm my linked checking account was annoying, the additional ten days it took for my transferred funds to show up as available in my Moven account was stupefying. It made my interactions with my traditional bank seem like light speed in comparison.

Mobile App Design and Usability

The Moven app is beautiful and easy to use. The app required me to log in every time I opened it (with a username and password or Facebook and a PIN), which is reasonable given that it is actually a deposit account. The only usability concern that I had was that the app didn’t show me which nearby merchants accepted the contactless PayPass feature (more on that feature below).

Using the Product

Moven provides a couple of different ways to pay. You can use a standard MasterCard debit card or a MasterCard NFC PayPass sticker, which you stick to your phone and tap the register to pay (as long as that register is compatible with near field communication technology). Moven also provides a sophisticated personal financial management (PFM) capability that enables you to manage your finances—both online and directly on your smartphone. This includes a realtime spending feedback feature that automatically notifies you on how your purchase impacts your overall financial goals.

I used both the Moven debit card and the PayPass sticker to make payments. Both payment methods were easy and straightforward, but unremarkable. I still had to get something out of my pocket and enter a PIN. The near field communication sticker was kind of cool, but not nearly as seamless as the Square Wallet. Additionally, the PayPass feature wasn’t accepted at the majority of merchants I wanted to use it at (much like the Square Wallet). The more innovative part of Moven seems to be the integrated PFM functionality. I found the realtime spending feedback feature quite useful, especially for helping me “police” those small luxury purchases like lattes.

A Comparison of Square and Moven

It’s important to remember, I didn’t get a chance to use all of the features included in my Moven and Square accounts. I didn’t make any P2P payments. I didn’t get to play with Moven’s PFM capabilities as much as I wanted to. And, most disappointedly, I didn’t get a chance to use either product in a more urban setting, where I undoubtedly would have had more opportunities to pay for things using their novel payment approaches.

With that said, I did get enough experience using Moven and Square to form some initial impressions. From my perspective, Square is dreaming bigger and is focused on providing a more futuristic consumer experience. Paying for something just by saying my name was radically more convenient than any payment method I’ve ever used, but it was also less convenient given the small number of merchants currently participating. Moven seems to be taking almost the opposite approach, sacrificing some convenience during the actual payment process in order to ensure the compatibility of their product with multiple payment technologies (NFC and magstripe cards). This approach makes their product more useful on a day-to-day basis, but ultimately less revolutionary.

Going back to my “Jurassic Park test,” if the question is which product should become the next credit card, I would say that the Square Wallet is the more deserving of the two. However, if the question is which product will replace the credit card, I think the answer is still unclear.

Alex Johnson is marketing specialist for Zoot Enterprises Inc., a provider of loan origination, account acquisition and credit risk management solutions for large financial institutions. You can follow him on Twitter @ZootAlex or Google+. Visit Zoot’s Credit Strategy Session and its Merchant Acquiring Strategy Session on PaymentsJournal.

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