How consumers pay for goods and services changes all of the time. Between e-commerce and digital transactions, point-of-sale (POS) systems in brick-and-mortar retail, and the emergence of smartphone-enabled, contactless, and wearable payment methods, businesses are faced with an overwhelming array of choices when it comes to methods to support and engagement programs in which to invest.
That middle ground is where Rittenhouse Payment Solutions (RPS) lives. RPS is an all-in-one, customizable software platform for businesses that provides payments, rewards, loyalty and coupon programs, ticketing, access, and promotions. RPS is a business-to-business (B2B) solution that works between businesses and the POS systems, credit card processing services, and other payment providers to which they're connecting. The company's goal is to automate marketing and operations, facilitate transactions, and gather a whole lot of consumer behavior and purchase data in the process. The company aims to do all of this while giving consumers choice and a dead-simple user experience (UX).
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RPS CEO Todd Wrubel recently visited PCMag's New York City office. Wrubel is a veteran in the credit space who has worked at Sears Financial, Citibank, and payment processor Comdata before founding RPS. His company now powers branded payments experiences for customers including the Better Business Bureau (BBB), NASCAR, and numerous startups. We sat down with Wrubel to discuss how their platform works, trends and fads in the payments space, and how payments are evolving to become more targeted and personalized despite the constant proliferation of new payment methods and technology.
PCMag: How does the Rittenhouse Payments platform work?
Todd Wrubel (TW): We do B2B. And what we offer is, here's a platform and then literally a menu of all the things you can do with it. Then, here are APIs [application programming interfaces] to build onto it. Here's how we can take your branding or your value and place it into there. So our rule is always that we're happy to be in the background. We want that branding to be upfront. We want you to discover a channel that maybe we don't know about. We've got people that come to us saying, "We didn't know that channel existed, that's a great avenue to go through." So that's what we facilitate.
Another example with the engagement part of it is: savings accounts attached to these kinds of programs. So, imagine a kid is doing his chores, trying to save money for something. Well, instead of just handing in the money and trapping it, the system can track the chores and the money you're earning, your mother can approve it and say "yes" or "no," see a picture before and after, then swipe, say "okay," and fund something. There is depth to the ecosystem, and people forget that, once you have certain rails available to you, like a MasterCard or a Visa, there are so many ways to use this technology.
PCMag: However, that depth is only feasible for the market if you provide that simplicity on the other end of it.
TW: You have to. You have to give them something that's easy to understand and is not daunting like a credit card or a big bank. Make it fun. It could be loyalty, which could be a part of something that becomes kind of a Trojan horse to get you to the payments side, that drags you over to start using this service and making purchases.
PCMag: Rittenhouse is all about enabling different payment methods and facilitating transactions. But how would you distinguish that idea of enabling versus upselling?
TW: That's a great point. We want to enable payments, transactions, and loyalty. But we want to utilize the B2B focus to say, "Here are the channels and here's why it's valuable." You can have a really great channel and say, "I don't have the money to build in-house payments or pull this all together. How do I do this?" It's not worth it; you put yourself in a hole. What we're saying is, "Here's the box. Now let's attach all these things to it and here, it becomes your program." Keep people engaged that way. Say here's your program, here's your channel, enable it.
We've taken things outside the card space. Debit cards are great, prepaid is great, but can you use the technology and connect it with security and access? Is it possible to go to an event and have a wristband, a sticker, a wearable, and have it connect with access, security, and payments all in one? Yes.
Can you load funds and share them with another account person-to-person [P2P]? We can do that virtually, we can do it with bracelets, cards, even by apps. Family programs are becoming less of a fad and more important as well. Encouraging smart spending, talking with children about what it means to have money versus giving them money. Even ticket purchasing: ticketing, seats, all of that can be on a wearable; it can be a prepaid program and everyone can sit together for an event.
We're talking about cash back. We're talking about your typical signature purchasing or tapping and going. Digital offers are another. What I mean by that is, there are tons of offers out there and places you can get coupons. But what if you could do something that's real-time? You get 10 percent off when you shop here or there. You can tap your phone or wearable with a chip in it, and get a discount right then and there. That's the stuff people want. I think the coupon world has not come and gone, but everyone has a version of it and a big box way to get to it. So, 5 percent off at Target is 5 percent off; all these other brands can do, too.
PCMag: What about building in personalization into all of these offers?
TW: That's where this all ends up. Now there's data, all this stuff I saw you do. How do I use that purchase behavior and start targeting you in the way that you want? We always recommend to clients to have the ability to turn that on and off. You don't want to upset people with another offer for coffee. They had some today and they get three more offers for coffee. We want to tailor it that way, too, so it doesn't overburden people with information.
It's all automated, but in the transaction space, you're getting a lot of data. We're creating an account for you and you're running transactions through it. We are seeing transaction data—an offer, a discount, and then the lift—we would see that, oh, you did get 10 percent off but you were spending 30 percent more. On our side of the fence, we call that "driving aspirational spending." That's where gift cards used to be. I give you a $100 gift card to Best Buy and then you go in and spend $250.
What we've done also is say, "Let's get out of the gift card model. Why don't we have something that's reusable and can be reloaded?" If grandma wants to send you $20, send it to this account. That's your gift card now. You don't always have to go get a new piece of plastic. Now you can have an account that can be used with Visa and MasterCard, those acceptance marks, without only having to use it at Best Buy. Then you start targeting people with offers, promotions, data; starting to facilitate a total transaction.
PCMag: Security is also a huge concern, particularly when you're centralizing all of this information. How do you tackle that increasing complexity?
TW: Security is paramount, particularly data security given what just happened with Equifax. When you're setting up an account, we are sourcing processors and issuing banks that have built-in capabilities for security, compliance—all those good things. There's a reason we do that. In the beginning, my first thought was, "I have to be a processor. I have to own it all end-to-end." Well, then you do the numbers. You realize, "Am I really making that much money per transaction? Are there other things that have been invented that I can tack onto and start building off?"
So, that's why this is very secure. Because we're using those backbones. So, when there's a compliance issue, when there's an issuing problem, we have those sources already lined up and all that security is handled. Now, when there is an issue, let's say someone stole my identity or my card, this is MasterCard and Visa. It still goes back to those zero liability rules. And, if you can prove this is not you, the safeguards are there.
Signing up when you're talking about prepaid is different than the credit side of things. There are ways for you to use it as a tool for your payroll and have it loaded. You're going to have social security numbers and all that stuff. There are other ways that, if you do incentives, you don't need those things. There are ways to blend it so that you're either fully secure or it's a one-off program. So, to go back to ticketing, you don't need to put a whole lot of information in there unless you want to.
PCMag: That's been one of the exacerbating factors in a lot of these breaches. Companies are collecting far more personally identifiable information (PII) than they need. How do you tread that line?
TW: In most cases, I don't want a lot of this data sitting around. We don't hold onto social security numbers. We don't hold onto a lot of data. That is done in systems separate from us. That's why we have linkage to all these processors and issuing banks. They're set up in a PCI way to handle these sorts of things. We care not to store this kind of data. When it comes to customer service and things like your account number, we won't validate unless we have to and, if we do, it's outsourced. We don't want to validate internally and have liability anywhere with anyone's information.
PCMag: Rittenhouse occupies a unique position in the payments space, where you operate in the middle of a lot of different parties. Given this perspective, I want to break down a couple of trends we're seeing now in the payments space and get a litmus test on whether the trend has staying power. Let's start with RFID and wearables.
TW: Wearables are going to grow; they're going to matter but only in the way that their utility can be used conveniently. You're not going to use a bracelet at a bar or a restaurant and tap your arm to pay for dinner or a drink. There's always going to be a payment method involved linked to a card or plastic. If they do take a phone and you can tap and pay, that's different.
Now, if I'm out jogging or something and don't have my wallet, there it makes perfect sense. Wearables also matter for clients when we're working with ticketing. You're going to a show or an event, and you have your payment and your identity linked into a wearable; that makes sense. Think about even somewhere like the VA [veteran's affairs] of all places. They could use this immensely because they do pay people to come back and forth for checkups. A lot of these people are homeless and don't have places where those checks go to. You can literally have the money sent to them where it's on a wearable or sticker, and they can go pay for transit and things like that. That ability is I think where wearables work situationally.
PCMag: What other payment trends have you seen an uptick in or what fads have you observed that are starting to fizzle out?
TW: In general, from a payments and spend perspective, credit is on the downturn. It always has been dripping but now it's going downward. Millennials, kids that have the ability to take payments now and get money here and there, credit is not cool. It just isn't. If you've been through any financial trouble in your family and you're hearing about credit card bills, it has a taint to it.
Having a debit card is always hot. However, year-over-year growth, prepaid debit has gone through the roof. People like that control. I'm getting my value put on here, I'm using it for these circumstances, I'm laying out. Here's my slush fund for this, here's my fund for that. We call it multi-pursing. I've got a purse for everything I do. You can say I'm loading this much to my prepaid credit or debit card account, and start to use this as a budgeting tool.
That's the other cool factor. You get out of this cycle of paying at the end of the month and now you've got one tool, one way to justify your payments, and one place to look at it. In credit, we used to call it the Hangover Effect. "Oh, that was such a fun weekend. I bought this, I bought that" and then you get your bill and say, "Who the heck bought all of this?" With prepaid, that's gone. You get a text message saying here's what you just spent and here's your balance.
PCMag: Finally, in looking at payments trends, what are your thoughts on the mainstream viability of cryptocurrencies?
TW: We have clients doing prepaid programs with us that want to convert Bitcoin and cash out onto a wallet or exchange. I like the idea of it. But, for the general population, it's going to take a very long time. It's hard enough to get people out of cash. Moving people from cash to plastic in the 60s, 70s, and 80s was a huge deal. Things like loyalty points didn't catch on until the 90s or later. With Bitcoin and cryptocurrencies, it's tough to explain it to people because, if it's not in your pocket, people don't feel like it's real.
PCMag: Looking at the bigger picture, how do you see payments evolving in both the short term and longer term?
TW: Payments in the short term is going to be all about convenience. What's in front of you, what's not going to slow a purchase? What can I do to trigger decisions and buy something? I keep going back to you're in line at a grocery story. Those last purchases at the end. "Why do I need this? Whatever, I'll buy it." Done. That's what we need with payments now, and that means thinking about what device you're using. Apple Pay has not been as successful as they hoped.
PCMag: So, what's the tech solution for the impulse buy?
TW: I think that's when you have a sponsor that's already provided you with something as a result of loyalty. I get $10 back on my wearable and I don't have to use it only at Walgreens or CVS. I can go buy gas or gum or whatever. That's where the impulse buy will come in because it feels like free money. I worry about Apple Pay and Samsung Pay because people are still not focused on their phones for the whole payment process; they get nervous about it. Having something in your wallet or in your pocket like a wearable somehow disconnects them from that.
From a future standpoint, I think you could wind up having one account. Underneath that parent account are all the sub-purses, if you will, that will trigger your purchase behavior from there. There might even be credit under there, but there's one master account and you'll hook in all these things that you pick. So you can say under this, I want my Citi debit card, and over here is credit, and here is prepaid. And when you make a purchase, you can choose how you want to pay. From there, you could do things like hook it into your QuickBooks and it becomes your own ledger. I think that kind of mass personalization is where payments will end up.