The McGarvey Credit Union Podcast: CU2.0 Podcast Episode 23 Gabe Krajicek of Kasasa http://bit.ly/2SRxtRu

By Robert McGarvey

More of you lately have been asking me the same question: where to eat at Sky Harbor Airport, Phoenix – which, for the record, is the nation’s 13th busiest airport – just behind Newark (11) and Orlando (12) and ahead of Miami (14) and Houston (15).

Makes sense that the questions are getting asked now, too. This is Phoenix’s busy season, the town is hopping with meetings, events, and Spring Training ball. There also have been recent, big culinary changes in Terminal 3.

Mainly, too, Sky Harbor is a pleasant facility. I can rant about JFK and am no fan of BWI but Sky Harbor usually seems well run, even calm.  I cannot even complain about the TSAs at Phx.

Can similar be said about the food?

Commendable is the airport policy to nurture local chefs.  Certainly there are the national chains – sometimes I believe there is a law requiring Starbucks at all airports – but in Phoenix your best choices may be places you’ve never heard of, by chefs you’ve also not heard about.

Thus the real need for local guidance.

Sky Harbor has three terminals and they are not equal. Terminal 4 is the busiest by far, handling perhaps 70% of Sky Harbor’s passengers.  

The best food choices, not surprisingly, are found in Terminal 4.  

By far the best.

AZCentral.com reporter Lauren Saria even managed to file a piece on the top 10 dining choices at Terminal 4.  There actually are good options.

A top choice is Barrio Cafe via chef Silvana Salcido Esparza who may be cooking the most thoughtful Mexican food in Phoenix.  

Also a good idea is Zinc Brasserie. Wrote Saria, “Zinc easily exceeds most expectations for an airport eatery. For a starter don’t skip the French onion soup gratinee, and for a more affordable entree the Zinc Burger can’t be beat. It comes with your choice of bacon and blue cheese or truffled gruyere and a side of crispy shoestring frites.”

It’s breakfast time?  Lucky you. Eat at Matt’s Big Breakfast, the airport outpost of a downtown Phoenix classic that has won its fame by serving very good breakfast staples such as scrambled eggs and bacon, what I always order.  The execution just is precise.

Save room for a stop at Sweet Republic – an outstanding local ice cream maker.  Really good ice cream.

And have a cup of coffee at Cartel. Wrote Saria: “When it comes to craft coffee, you’d be hard-pressed to find a more serious operation in greater Phoenix than Tempe-based Cartel Coffee Lab.”

If you have to eat at the airport in Phoenix, you will do well in Terminal 4.  You will do less well at the other terminals but you won’t starve.

Terminal 3 is a lesser used terminal. I can recall flying out of it only a few times.  That is reflected in the dining options.  But the good news is that, lately, there’s been a rush to open new venues. That’s giving diners much better choices.

Right now I would recommend Shake Shack and the Parlor Pizzeria (the airport location of a much praised Phoenix pizzeria that has sometimes been called the town’s best and that means better than Chris Bianco’s joints which is something. I don’t agree with that but Parlor is very good indeed).

I am also a longtime Shake Shack fan – so I won’t grumble when I can eat there.

Otherwise, Terminal 3 has a lot of blah choices – Starbucks, Habit Burger, Panera, and you get the drill.  Here’s the complete list.  

My advice: flip a coin. Heads you go for pizza, tails for a burger.  Forget the other options.

Stay tuned however because shortly a new Terminal 3 restaurant created by James Beard award winner Christopher Gross – called Christopher’s – is slated to open. That will demand our interest. I know I will give it a try.

Also slated to open soon is The Tavern, a new restaurant via Mark Tarbell, a local Phoenix celebrity chef. Mainly a burger, sandwich and salad place but Tarbell will try to lift it beyond the humdrum. I’ll stop here too when it opens.

Terminal 2 also is a lesser used terminal.  The best choice is NYPD Pizza, and fans of chef Silvana will want to stop at Barrio Avion.  Other choices include Wendy’s and a grab and go.

Terminal 2 is a backwater. Obviously. But at least you can get a decent burrito.

At what cost? Excellent question. Consumer alert: in December the Phoenix City Council repealed a policy that set airport restaurant prices at street plus 10%.  Restaurants may now set their own prices. So regular airport diners almost certainly will detect higher costs.

Is the food worth it? Remember my rule about inflight food: just don’t. Don’t eat the stuff, certainly not on any domestic flight.  So that often means eating at the airport.

By Robert McGarvey

The big guns are blasting, consumers are switching to p2p, mega banks are cashing in and where exactly does that leave you?

Several reports now are out on p2p and the inescapable conclusion is that Americans like p2p.  A lot. Many billions of dollars worth.

In a report written by Cornerstone’s Ron Shevlin and commissioned by Q2, Shevlin said “Consumers will rack up roughly $478 billion in P2P payments in 2018—a little more than half of that going through their banks or credit unions.”

Hear more from Shevlin in his CU2.0 podcast here.  It’s a lively look at “Is the Party Over?”

Surprisingly, PopMoney – once written off as dead by many – is at least on life support, per Shevlin’s research.  He said 7% of consumers use it. Will that number grow? Hard to say but PopMoney does not look like a big winner in this race.

The big winners are financial institutions – account to account transfers – and also big bank owned Zelle and PayPal owned Venmo.  Also PayPal itself.

Per Shevlin’s numbers 48% of consumers use PayPal.  27% use bank p2p. 22% use Venmo. 12% use Zelle.

But money talks and in 2018 transaction volume Shevlin shows banks ahead at $172 billion in p2p.  PayPal logs $142 billion. Zelle comes in at $122 billion. And Venmo lags at $64 billion.

A Pymnts p2p report offers another calculation: “Venmo posted an 80 percent spike in transaction volume, hitting $19 billion in the fourth quarter of 2018, according to PayPal’s most recent financial earnings release. When it came to total P2P volume, including transfers sent through the core PayPal service, the Q4 volume hit $39 billion.

That last figure was ahead of Zelle’s reported payment volume of $35 billion during the fourth quarter of 2018, but there’s a hitch to that — that $39 billion was for the entire PayPal network, not just Venmo for that quarter.”

Slice the numbers as you wish, a clear takeaway is that a lot of consumers are all in on p2p.  

Another takeaway, per Shevlin, is that this is not a winner take all contest.   “Roughly half of consumers between the ages of 21 and 53 use three or more providers. In contrast, just about a quarter of Boomers do so,” wrote Shevlin.

Surprised? Don’t be. How many of us use just one credit or debit card? Personally I have three or four in active use and that’s a rather typical number.  Apparently similar shows up with p2p tools too.

Wrote Shevlin: “Banks and credit unions are getting a share of the [p2p] pie—and the expansion of Zelle may further drive volume to financial institutions—but they will have to operate in an environment where consumers make choices on which P2P provider to use on a transaction-by-transaction basis, and will have to learn how to provide value in a multi-provider world.”

Incidentally, credit unions and smaller community banks are in fact embracing Zelle.  The Pymnts report noted that, per Zelle, 77% of FIs in its network state assets equal to or less than $1 billion.

The bottomline action item that emerges from the new research is that your credit union needs a p2p strategy. Sitting on the sidelines is not a smart move.  Consumers, especially younger ones, want p2p but there is ample evidence that many Baby Boomers too are using the tools (if only to shift money to their young relatives).  

Is PopMoney alone good enough? So think both of the credit unions I belong to — it’s the only p2p tool on offer by them – but the reality is that I use PayPal multiple times monthly. I do not recall the last time I used PopMoney but it was many years ago.  I also have Zelle connected to a Chase account.

So my credit unions are sidelined from my p2p, except that one is used to fund some PayPal transfers. A thankless task.

The question for credit unions is simple. Do you want to be an active player in p2p – or do you want a minor role?  To go active my advice is to look hard at Zelle and definitely also PayPal and Venmo.

P2p has become a mainstream money movement tool.  It shouldn’t be ignored. Give your members the tools they want and will use. Ask them what they want. And listen to them.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto.

By Robert McGarvey

Have I stumbled onto Canal Street?

That thought popped into my mind on a recent flight as I witnessed attempt after attempt by the flight attendants to sell me stuff, lots of stuff. Everything from a credit card (note: I already have the thing!) to food (note: I don’t eat airline food) to alcohol.

Can’t a passenger get a little quiet?

The facial expressions of the crew are worth observing.  Some really get into this – presumably there’s a spiff system where the more they sell, the bigger the bonus – but the majority seem downright embarrassed.

As they should be.  I would not want to do the Canal Street hustle and I wouldn’t wish it on anybody else.

Then a Skift story popped into view: “In-Flight Pandering Erodes Airline Passenger Loyalty.” That’s because crews are turning up the heat.

According to Skift, “Several reports on social media share that captains and first officers on American are now making announcements on behalf of flight attendants while last week, a blogger on Boarding Area documented a credit card pitch that was flat-out wrong.”

Ouch.

It gets worse. On Frontier flight attendants now are actively soliciting tips. Bloomberg even asked the airline if, what the hell, is this sanctioned behavior and oh it is.  According to Bloomberg, “‘We appreciate the great work of our flight attendants and know that our customers do as well, so [the payment tablet] gives passengers the option to tip,’ said Frontier spokesman Jonathan Freed.”

Word of advice: just don’t. Don’t tip. I have long advocated – indeed lectured on — the importance of tipping hotel housekeepers, bellmen, et. al. but inflight is off limits in my mind. What, should we throw a deuce at the flight attendant when he/she bring us a glass of water? No.

Of course too we are getting ripped off when we buy stuff on a plane. The UK Independent, using data gathered by Kayak, wrote this about inflight purchases: “The report from travel search engine Kayak focused on the food and beverage offerings on Ryanair, easyJet, Jet2, FlyBe and British Airways, comparing staple items on the airlines’ menus with the equivalent at supermarkets Tesco, Asda and Sainsbury’s. Some of the biggest mark-ups were on drinks. A cup of tea on Jet2 was marked up by 8,900 per cent (£2.70 compared to 3p at the supermarket); coffee on a flight with the same airline had a 1,321 per cent mark-up (£2.70/19p).”

The report continued: “EasyJet were found to sell muffins with a 900 per cent mark-up (£2.50 compared to 25p) and chocolate bars for 260 per cent more (£1.80 compared to 50p).”

And then a tip on top makes sense?

You think it’s bad on United, American, BA, et. al.? It could get worse. Korea Air apparently wins the title as the most successful inflight shiller, garnering some $143 million in 2018 inflight sales.

Mainly Korea Air rings its cash registers selling cosmetics, booze and health supplements.

Don’t think this goes unnoticed in Chicago, Atlanta, or Dallas. The Big 3 US carriers have to be enviously eyeing this easy money. That’s why my guess is that more of this 30,000 ft retail is coming our way as carriers look for ever more “imaginative” ways to sell to a captive audience. Of course nobody reads the seatback shopping catalog anymore – is there still one? – and nobody reads the inflight magazine, so now the airlines have decided to put stuff to buy in our faces, literally.

But I can tell you this: I do not remember the last thing I bought on a plane.  I have a faded memory of buying a carton of Silk Cut smokes on a BA flight years ago but that was when smoking inflight was okay and also when I still smoked (I quit in 2001) so forgive my haziness.

If we don’t buy stuff they won’t try to sell it to us.

Say that again, say it loud, say it proud.

Just don’t buy and they will quit.

Eventually.

Meantime, earplugs will block the din out.  That’s my advice.

McGarvey on CU Technology: CU2.0 Podcast Episode 21 Ron Shevlin on “Is the Party Over?” http://bit.ly/2Dh1vDz #creditunion

By Robert McGarvey

Direct question: if you were opening a new account at a financial institution today, for yourself, perhaps for a child or another relative, where would it be?

It can’t be at your present employer.

That’s the only exclusion.  

So where would you open it?

A few months ago I opened a new account at a Phoenix credit union with a branch closest to my home and when I opened it, I did not bother to put a five-figure deposit into a savings account because the rate was pitiful,

Still is.  0.5%. I just checked.

A simple checking account pays exactly 0.0.

Oh, and opening an account using only online tools at this institution proved impossible. I had to visit the branch to conclude the process.

Yes, I was determined to open a credit union account. So I persevered. Will other consumers? 

Look at your institution through the eyes of a prospective new account holder. What do they see?

Do you like what they see?

Hold that thought and now focus on this: Today’s email brought a press release from MagnifyMoney announcing its rankings of the best online banks.

Many of these are institutions with robust advertising and marketing budgets. Consumers know about them. Will that consumer think of them – or of you – when they want to open a new account?  And when they compare the best online banks with your offerings, how do you stack up?

The best online bank, per MagnifyMoney, is Ally which of course dates back to 1919 and its former name GMAC.  Its longevity is as good as just about every credit union.

Ally pays 2.2% on its savings account.  0.1% on checking. 0.9% on a money market account.

How do you stack up?

Also high ranking in the MagnifyMoney scoring are Synchrony, Goldman Sachs, Barclays, and Capital One 360.

Vio won honors as the best new online bank. It’s a division of MidFirst bank.  Savings pays 2.39%. It promises online account opening in less than five minutes.

Again, the question is: how do you stack up?

A shrewd consumer just might find the smart move is to open a checking account at your credit union – and to park other money in savings at Vio.

Many executives at credit unions see free checking as the gateway relationship that leads to other relationships. But what if it isn’t?  Especially not today when it it is easy for a consumer to shop around online and to open new accounts at a variety of institutions. Maybe one for checking, one for savings, a third for a credit card, and a fourth for a car loan.

Then where is your business plan that revolves around free checking?

About now exasperated credit union executives will shout that the consumer should open an account at a credit union, instead of a for profit bank, because that is the right thing to do and it helps keep more money in the local community.

Yes, absolutely true. I agree.

The trouble is, not that many consumers agree.

In fact research reported by The FinancialBrand is adamant that consumers “know diddly squat about credit unions.”

64% of non members are not familiar with credit unions.

33% say there aren’t enough branches. 25% say there aren’t enough ATMs.

30% say it’s difficult to find a credit union they can join.

Sure, it is easy to say the consumers just don’t know – but we already stipulated they don’t know diddly squat.

They don’t and that is what makes the moral imperative argument ineffective.  It just can’t be counted to persuade that many consumers to go with a credit union.

Why aren’t the trades, the larger CUSOs, and the largest credit unions pushing the credit union advantage? Why haven’t they mounted powerful – effective – campaigns? Why don’t we see high profile influencers who are happy to act as evangelists for credit unions and the cooperative way?

I don’t know why but I sure would like to hear from the big players.

Another question: why are many of the largest credit unions yanking “credit union” out of their names?

The bottomline is simple. Credit unions, to win new accounts, need to work very hard to offer products that are competitive with the offerings from the online banks.

That’s not fair? It ignores the costs involved with brick and mortar?

True enough.  So what should your credit union do if in fact you cannot match the rates offered by online banks?  Double-down on the credit union advantages. Make them the cornerstone of your advertising/marketing. Educate consumers about credit unions. Make it an ethical argument. Go local, go self-ownership. Those arguments will resonate with consumers who just may want to open an account in an institution where they are an owner rather than with an online bank with better rates.

Talk about the Rochdale Principles.

Sell cooperatives and credit unions because – really – they are the better way. And many consumers will get that message. But first you have to tell it to them.

Read here: http://bit.ly/2UG9OQx

By Robert McGarvey

Don’t mind me, I’m only yawning.

The headline in trade pub Travelmarket Report triggered yawns in me: Major Airlines Duke It Out For Free Live TV Supremacy.  

For a brief second I was puzzled: what year is this?

I remember maybe 10 years ago when Continental, with much fanfare, introduced DirecTV and since I was flying business class in that era, it was free. In coach it apparently cost $6 and I’m sure I wouldn’t have paid for it because TV remains Newton Minow’s vast wasteland.  The less I watch the happier I am.

So of course I am not thrilled that now United, American and Delta apparently are battling to see which can offer free TV to more passengers. Call this the airline homage to Juvenal, the first century AD satirist who said the masses could be sated with bread and circuses —

iam pridem, ex quo suffragia nulli / uendimus, effudit curas; nam qui dabat olim / imperium, fasces, legiones, omnia, nunc se / continet atque duas tantum res anxius optat, / panem et circenses

Translation:  Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People who once upon a time handed out military command, high civil office, legions — everything, now restrains itself and anxiously hopes for just two things: bread and circuses.

Call more TV at 30,000 feet circuses and even tho in coach free bread is but a memory, the executives at the carriers must think that maybe we’ll be sated with the circus, at least placated enough not to notice how dismal back of the bus carriage has become.

And I also scratch my head at how, well, primitive free TV on the seatback is. As Travel Market Report noted, “some airlines are choosing to remove seatbacks [that is, screens] altogether; after it acquired Virgin America, known for the quality of its inflight entertainment, Alaska Airlines said it would ultimately phase out the seat back screens in favor of better WiFi and streaming choices vis passenger devices.”

Many other carriers are said to be kicking that idea around, especially as they confront the coming era of pricier jet fuel. When fuel is expensive weight matters and, yes, a screen weighs little but multiply it by the number of seats and the weight begins to exact a fuel toll.  Thus the interest in eighty sixing seatback screens – and putting the onus on passengers to tote their own devices (iPads, laptops, even smartphones) and to watch them.

Makes sense to me.  Other than some glances at DirecTV on Continental a decade ago, I cannot recall even noticing the seatback screen on flights.  My m.o. is to bring an iPad with a loaded Kindle app and to use flight time to read.  

But that’s only after handling accumulated email because a principle I travel with is arriving home with a clean desk – and that means responding to all emails received when on the road during the homeward bound flight.  If I have working WiFi – always a question and, yes, I’d be all in on an airline campaign to upgrade WiFi into a usable tool but we seem rather far from that — I’ll send off those emails from the air. But if not I’ll just backlog then and send when I land. Either way I’ve abided by my rules.

Which brings us to something that genuinely needs fixing: Most flights continue to lack WiFi and few have WiFi that is better than a nuisance.  If carriers touted a rollout of usable WiFi – not free TV – I’d be first to applaud.

But, apparently, carriers think we are so dimwitted that we’ll be sated by the flickering TV screen and may even forget that we still don’t have WiFi worth spit.

Sigh, at least I have my iPad with roughly 1000 books downloaded. I know I won’t be watching the free TV and if enough of us don’t, will carriers get the message that TV is not an adequate substitute for working WiFi? Nah, I doubt it.

But it’s pretty to wish as much.

http://bit.ly/2DKib86

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Buckle up for a fast journey into the world of cooperatives with branding guru Robert MacDonald who will tell you why she is optimistic about a world where cooperatives are delivering local – relevant – solutions created by people for people. Be prepared to listen again and again because this is a podcast with a lot of rich content. Along the way you’ll even learn how Cabot got its name – and how many cooperatives there are in the U.S. Do you know? Take your best guess and listen up to get the answer.

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