Blog Archives

Users are not ready for this. Which key player will win?

Hello all,

A quick post to introduce two important articles and one video that resumes well the slow or conservative point of view to this “revolution”.

Today the market is not ready for the revolution both from a consumer and a merchant side:

http://www.americanbanker.com/issues/176_184/google-wallet-mobile-payments-isis-lightspeed-1042421-1.html

The second one is to discuss what is usually forgotten into that revolution – payments is not really painful as it is but this revolution will need to bring a whole set of value added services (Offers, Coupons, what else?) to the ecosystem to make a real dent into the current modus operandi:

http://gigaom.com/2011/09/26/mobile-payments-mobilize-2011/?utm_source=social&utm_medium=twitter&utm_campaign=gigaom

Again, I like the approach here. You ll here it more and more, consumers and merchants are not ready for this. Even the professionals are saying it. What they are also saying is that they are all working to make this happen and make happen this faster in their own way using their own strengths.

List of questions and random thoughts from me:

– Will PayPal be right at assuming that NFC will be too slow to deploy and that merchants will try to embrace added value services experiences through players like themselves?

– Will the giants that are Visa, MasterCard and others be able to digitalise fast enough their offline offering?

– Will hardware deployment be the determinant limiting factor?

– Can we look at Google, Facebook, Apple and other non traditional payment players to be completely disruptive into their approach and leverage their data at payments to provide the best added value services both for merchants and consumers?

All I can say is it does look like a race and a pretty bloody one too.

Another thought is that I think that people still try to ameliorate a system that in the US and other mature markets works pretty well already. But what about emerging markets? What about the billions of people who are still un-banked/un-carded and don’t have access to that vast world of choice, depth and breath of products that mature markets do. Maybe the future winner will be the one(s) that will bring those two worlds together.

Happy to talk about it, let me know,

Sincerely,

David Pardo

The payment players and their positioning

Hello all,

I have been quite impressed with how much coverage there has been about the recent Payment related announcements these past couple days and in fact, it is funny to say but I don’t see any surprises in any of them, or at least not much. Let me try to explain and unroll that as I see it (completely open for debate though):

PLAYERS

PayPal:
https://www.thepaypalblog.com/2011/09/paypal-unveils-the-future-of-shopping/

Mr Thompson was kind enough to share with us the fact that PayPal didn’t see much of a future in NFC. Well being a company with most of their presence in the cloud, truly no presence a Point Of Sale, I don’t think how they would say otherwise.
The coffee use case is interesting though: One thing that this video unveils is that PayPal still plan to go to the Point Of Sale (POS) but though their own mean. Meaning that they will still need to find away to be of an appeal to offline merchants. This doesn’t say how they are thinking about reaching out to the thousands but their use case would show that they would tackle chains first and then expand slowly from there. This wouldn’t be playing their own advantage which always have been SMEs but who knows?! It would also be a very slow global roll out as chains even as powerful as Starbucks will never be giving them relevance in China, India or even Europe for that matter.
A big announcement with Facebook is apparently coming up. I hope the audience is captivated. I know I am…

 

MasterCard:
MasterCard has announced that, at the contrary, they believe in NFC. Again no surprise here, a company that has such a strong POS presence can only capitalise on that. MasterCard has already expanded quite aggressively their acceptance for NFC and they ve been at it for couple years now so the only thing that will change is the use of mobiles instead of cards.
MasterCard war battle will be to convince that 1)NFC is secure. 2)merchants and consumers are willing to use NFC – which all their competitors would not agree with (see Square below)

 

Google:
Google announced that they will open their wallet to the wider audience beyond MasterCard / Citi Bank cards. Again no real surprises here, a player that wants to be mainstream has to play with everyone.

We probably have to pay attention to their Offers offering to merchants and consumers. Google data span is HUGE even compared to a PayPal or a MasterCard it could get scary/interesting (depending on who you are :)).

 

Visa:
No real news besides the above.
Of course a Digital Wallet in in the cooking and has been announced to launch in US and Canada soon.
I want to also circulate this that not a lot of people are aware of. Visa in Australia had launched a Wallet already called PayClick. It’s an interesting positioning itself as it calls on the youth segment and Digital Goods. now I don’t think it is very successful but it does give them grounds into a new positioning that would hopefully have taught them a lot.

We ll definitely keep an eye for the “fall” announcement as well.

 

American Express:

Wallet announced and launched. It’s called Serve. It positions itself mainly on Personal Payments through Mobile but with an eCommerce and mCommerce posibility… Meaning…we don’t have merchant acceptance online yet but when it comes, the wallet will work with that.

 

Square:

I am sure you got it by now, Square doesn’t believe in NFC, as they use proximity payments already and that they don’t intent to get back to the traditional way of doing POS payments. Their positioning is also SMEs but from the POS stand point and so their strategic fit with PayPal is more and more prevalent.

 

[I know there is a lot of other important brands but I kind want to stay under 100 words…I ll get back to them at some point, I promise.]

 

ECOSYSTEM

OK now that we looked at them independently. How does it look like in the ecosystem.

First one prediction:

Every main player will play the advantage in the next couple months and covering its gaps:

PayPal will try to create Offers online and offlien and will try to bring them to customers, they will reinforce their entry into POS use cases.

MasterCard, Visa, AMEX will most probably enter e/mCommerce aggressively, one way or another, PayPal plays in their turf now so the logical reaction will be to play in PayPal’s. Moreover, I am surprised to not see more activity on SME front by these guys. Sure enough they know that SME are willing to pay more than Large Merchants by now…

Square can limit itself what they have already and re-inforce that but I see them getting either acquire by PayPal (but it would be expensive but a real good strategic fit) or concentrating on creating value for a segment that no one really touches upon now. POS for SME. It could be unique enough to be stand alone.

 

What do you think?

 

Sincerely,

David Pardo