Retailers Aim To ‘Swipe’ Rewards Cards

The Wall Street Journal: “Consumers have become addicted to credit cards with generous rewards programs. Retailers are trying to cut them off. Large merchants including Amazon.com Inc., Target Corp. and Home Depot Inc. are pushing for the right to reject some rewards credit cards, which typically carry higher fees for merchants.”

“The retailers are trying to end the card networks’ ‘honor all cards’ rule, which requires merchants that accept Visa- or Mastercard-branded credit cards to take all of them. If merchants could pick and choose among Visa or Mastercard credit cards, those with the highest merchant fees—and most generous rewards—likely would be on the chopping block.”

“Some 92% of all U.S. credit-card purchase volume is currently charged on rewards credit cards, up from 86% in 2013 and 67% in 2008, according to estimates from Mercator Advisory Group Inc., a payments research and consulting firm. Yet merchants say the most generous rewards credit cards with the highest fees are cutting into their profits … ‘swipe’ fees vary widely, but are higher on rewards credit cards—sometimes around 3% of the cardholder’s purchase price.”

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Branching Out: Former Banks = Cool Stores

The New York Times: “Former bank branches have been reincarnated as pizza parlors, fast-food outlets, health care sites, massage chains, credit unions, educational institutions, churches and mobile phone stores. Some serve as locations for Starbucks, CityMD Urgent Care, CVS and other chains.”

“Attributes that were attractive to banks in the first place are now selling points for the converted properties. Many occupy corner locations on busy streets with heavy retail traffic. The buildings are often free-standing and well maintained, with sturdy brick construction. Depending on municipal zoning restrictions, canopied drive-throughs can be converted to other uses, such as fast-food pickup, side entrances or patios.”

“Part of an Apple Bank in Manhattan was converted to condos in 2006, and CVS moved into at least two banks in New York with high ceilings and marble columns … In the small tourist community of Lake Tomahawk, Wis., Tina Rydzik saw a marketing opportunity after she found it impossible to remove the vault from a former bank she took over and converted into a pizza house. She christened the enterprise Pizza Vault, and named nearly all the entrees after famous bank robbers.”

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America’s Most Exciting Bank

The Wall Street Journal: “To Michael Daly, who runs Berkshire Hills Bancorp Inc., BHLB -1.22% banking is too often blasé. So Mr. Daly has adapted an unconventional rulebook meant to energize and empower his 1,900 employees. Suits are not allowed. Rock music must be played at every meeting. And ziplines are an acceptable form of transportation: Mr. Daly once arrived at an employee town hall on one, slinging $100 bills to the crowd below … In an industry built on numbers, Mr. Daly believes in emotions and that employees who feel good will do good work. He started calling his company ‘America’s Most Exciting Bank’ years ago, because workers told him they wanted jobs they enjoyed.”

“Since he became chief executive in 2002, the bank has grown to $11.5 billion in assets as of the first quarter, from about $1 billion. During acquisitions and their accompanying job cuts, Mr. Daly hands out his cellphone number freely and encourages employees whose jobs are on the line to ‘come get in my face.’ The ones that do call often prove worth keeping. ‘You would be shocked at how many high performers we find through that,’ he says.”

“Mr. Daly often hires from outside the banking industry, valuing scrappiness over pedigree. He likes to tell the story of two customers that he struck up a conversation with at a branch in Albany, N.Y. He liked their energy, and hired them away from the clothing store where they worked to do customer service for the bank … For all his swagger, Mr. Daly also likes to play the part of a small-town banker. He said he sends a couple hundred handwritten notes to employees every month, and replies to just as many employee emails.”

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Capital One Café Connects with Community

Business Insider: “Capital One’s latest venture, the Capital One Café, is … a move to win over their hard-won loyalty and lay a new foundation for relationship-based banking. The company is opening a string of cafés in some of the nation’s largest cities that function as co-working spaces open to the public. Anyone, regardless of bank affiliation, can grab a cup of coffee, sit on a couch, and, if they want, get coached through their money problems by professionals — for free.”

“Capital One partnered with Peet’s Coffee, a Bay-Area coffee roaster and retailer, to provide beverages and snacks for purchase in each café … All pastries are supplied by local bakeries — a nod to millennials’ penchant for supporting local businesses in their community … Though you don’t have to be a Capital One cardholder to hang out in the café and co-working space, your card will get you 50% off any drink purchase … With the coffee counter off to the side, the split-level space is open, airy, and lined with floor-to-ceiling windows, letting plenty of California sunshine in. But perhaps most importantly, there’s free Wi-Fi.”

“Indeed, it feels more like a co-working space than a bank or financial center. There are plenty of device charging stations, and comfy seating, to encourage an extended stay … Other tech offerings include iPads throughout the café that invite customers to click through short finance lessons or take a quiz to test their money knowledge … Small, closed nooks are also available for private conversations with a money coach. And there’s a larger conference room that seats about 10 people, which can be reserved online, free of charge, by local businesses and non-profits.”

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Bank of America Tests ‘Robo-Banks’

The Washington Post: “Bank of America has opened three mini-bank branches­ since the new year that have ATMs and video­conferencing but no people. Two opened in Denver and one in Minneapolis. In addition to the ATMs, the new robo-banks — called automated centers — allow customers to make a video­conference call to a Bank of America employee at another location to discuss more complicated money issues.”

Peter Fitzgerald, a former U.S. senator from Illinois, lifelong banker and founder of Chain Bridge Bank, comments: “This is the beginning of the end of the American bank branch. Bank branches are dead. They were killed by the iPhone. It’s like the horseshoe when the automobile came along.”

“Bank of America spokeswoman Anne Pace said live banking isn’t disappearing … She also said Bank of America is adding 50 to 60 traditional centers.” She also says: “We are simply following our clients … Mobile banking users increased to 21.6 million, and 19 percent of deposit transactions are done through mobile. That’s equivalent to 880 financial centers. We need to be there whether it’s through the mobile phone or inside a financial center.”

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