Mobile banking may be Telecom’s killer application
With increasing consumer familiarity and growing ease of use, mobile applications for financial services companies could become the new “killer application” for telecommunications.
Read MoreTag: Bank of America
Capital One, USPS in NSA dispute
The Postal Regulatory Commission may rule in August on the dispute between Capital One Services Inc. and the US Postal Service, regarding the issu¬ance of a contract between the USPS and the mailer that would provide customized pricing incentives.
Capital One filed a complaint about the negotiated service agreement (NSA) with the PRC on June 19, alleging that the Postal Service “unduly discrimi¬nated” against the company because it was denied a NSA under the same terms as one granted to its competitor, Bank of America Corp.
Terms of the Bank of America NSA, which went into effect April 1, required multiple operational commitments from the company, including implementing the Intelligent Mail barcode and other auto¬mated sorting tools, as well as waiving the physical return of certain First Class Mail and Standard Mail pieces.
The USPS claims that Capital One’s proposed NSA was not identical to that of Bank of America, and that Capital One had not exhausted all good faith negotiations for an NSA before filing the complaint.
A Capital One spokesman declined to comment beyond the company’s com¬plaint filing, which states that the company was denied a NSA that was “functionally equivalent” to that of Bank of America.
Capital One further alleges that the NSA between Bank of America and the USPS used thresholds for mailing dis¬counts based on industry rates from 1998, rather than current NSA baselines.
The USPS has approved a total of nine NSAs, with one extension, since the opportunity began in 2002. Capital One received the first NSA, which was approved, in May 2003. The agreement granted the bank a discount rate on mail volume above an annual total of 1.225 billion pieces for a three-year term. The USPS receives between 50 and 100 requests for NSAs each year, according to a USPS spokesman.
Small financial services using e-mail to compete: Mintel survey
Many large financial services firms are experimenting with a blend of direct mail and e-mail marketing to communicate with their current customers and merchandise their new products and services. In contrast, many smaller financial services have turned to e-mail to attract new customers with acquisition offers.
According to Mintel Comperemedia, a competitive intelligence service in Chicago that analyzes direct mail, e-mail marketing and print media, several smaller companies are emerging as more frequently tracked entities in the e-mail marketing arena.
“E-mail marketing has been able to serve as a more affordable option for smaller, lesser-know companies that need to reach new consumers,” said Carmen Curran, analyst for Mintel Comperemedia, in a statement. “Major financial services companies continue to take advantage of e-mail as well, but they have stronger resources to market through direct mail and other key channels. They are also concentrating more on marketing to current customers through e-mail rather than acquiring new ones.”
Mintel Comperemedia said that as the e-mail sector evolves, companies such as Metabank in the banking sector and First Premier Bank in the credit card sector have been identified as key players, flooding consumer mailboxes with acquisition offers and promotions. However, on the direct mail front, these companies are distributing a significantly lower share of offers than their larger competitors.
As reported March 13 on DMNews.com [http://www.dmnews.com/cms/dm-news/direct-mail/40362.html] in the direct mail category, the top 2006 overall mailers for acquisition financial services direct mail pieces were Chase (1.7 billion), Capital One (1.2 billion), American Express (1 billion), Citibank (980 million), and Bank of America (920 million). While many smaller companies turn acquisition efforts to e-mail marketing, larger companies are opting for e-mail marketing to cross-sell their products and communicate with their customers about their services.
Read MorePostal Service seeks Bank of America NSA
The U.S. Postal Service has filed a negotiated service agreement request for Bank of America with the Postal Regulatory Commission, the first NSA request based purely on cost savings rather than requiring a volume threshold for the incentives. NSAs are special service and rate arrangements between the USPS and a mailer or group of mailers. Proponents say NSAs encourage greater volume by rewarding postal customers with discounts and premium services.
“We intend for this NSA to produce cost savings for both the postal service and Bank of America,” said Mike Plunkett, USPS acting vice president for pricing and classification.
The Feb. 7 filing said this NSA aims to provide incentives that will encourage an individual mailer to engage in voluntary changes in mail preparation that will reduce the costs to the postal service of handling the mailer’s mail.
The NSA would encourage Bank of America, one of the world’s largest financial institutions, to undertake certain activities to reduce the cost to the USPS of processing its First Class and Standard mail, including mail that is entered into the mail stream by or on behalf of a Bank of America subsidiary or affiliate.
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