U.S. Bank Details Its Mobile Pay Plans, Pre- and Post-Apple Pay

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PHOENIX — U.S. Bank has been trying to get iPhones to make contactless payments for a long time, but most of its efforts didn't pan out. The launch of Apple Pay and the rapid advancement of mobile technology may breathe some new life into the bank's old ideas.

The key difference with Apple is it launches with the support and enthusiasm of several influential merchants, said Pamela Joseph, U.S. Bancorp's vice chair of payment services, during a presentation at SourceMedia's PayThink conference this week.

"We've tried over the years to do things with [Near Field Communication] and we haven't had success because we haven't had the merchant community in lockstep," Joseph said.  "While Apple has started with a key number of customers … it will grow quickly and rapidly."

NFC adoption has also benefited from the spread of EMV-chip technology, she said. The devices merchants buy to support chip-card payments already have NFC built in.

But even with more merchants capable of accepting NFC payments, much of what the bank does boils down to experimentation. One experiment, which began in 2009, was a contactless payment sticker paired with a mobile app to simulate the process of making a payment from an NFC-capable phone. That approach was "really clunky," she said. "The app was really bad, but even worse, the sticker looked weird."

So U.S. Bank shelved that offering. It next developed a payment-capable iPhone "skin" that it sold through Apple stores. Joseph spoke more highly of that approach, but ultimately the bank shelved that offering as well.

"It was great; we just never advertised it, so about 4,000 people in the U.S. had it," she said.

In 2010, U.S. Bank offered a payment-capable bracelet, and this idea may be worth revisiting, particularly because the product was relatively cheap to make, at just $2 per bracelet, Joseph said. Today, many other large banks such as Barclays and CaixaBank offer their own payment-capable bracelets, and half of its Disney World visitors use the theme park's payment-capable MagicBands.

U.S. Bank is currently experimenting with voice technology and digital watermarking.

With voice, U.S. Bank has found the banking world benefits from the limited vocabulary it applies to customer interactions. Using technology from Nuance, U.S. Bank is up to a 96% recognition rate of spoken commands, based on the specific words and phrases it supports.

U.S. Bank is also working with Monitise to develop an app called Peri, which operates somewhat like the Shazam music-recognition app or Amazon.com's Firefly. Peri uses digital watermarks to recognize products in printed, TV and radio ads.

The bank will test Peri in the first quarter with a magazine and several large retailers, Joseph said.

"The time that we're in right now very much resembles, to me, the time that the Internet was exploding … there's so much going on," she said.

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