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PYMNTS Voice

Prepaid Tips for 2012: Why Fees Aren't Always the Answer

Posted by Gloria K. Colgan (Managing Director, Market Platform Dynamics) on 20 January 2012 | 2 Comments

Tags: Payment, 2012, Prepaid, Mobile, Cards, Innovation

More from the "Tips for 2012" Series

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New Global Payment Schemes: Imitation, the Sincerest Form of Flattery?

Posted by Margaret Weichert on 13 December 2010 | 0 Comments

Tags: Payment Networks, MasterCard, Visa, American Express, China Union Pay, CUP, Debit Cards

Throughout the 1980s and 1990s payment network consolidation in the US and Europe, resulted in a world with only 3 global credit card brands – Visa, MasterCard and American Express, supported by a host of regional/ local debit solutions. However, the desire to avoid the dominance of US brands and expand their domestic card markets, has driven players in China, India and Europe to contemplate their own competitive card schemes to compete with the global dominance of Visa, Mastercard and American Express.

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Will 2011 Be The Year of the Opt-In?

Posted by Tim Attinger on 9 December 2010 | 0 Comments

Tags: holiday, retail, shopping, consumers, payments, eCommerce, payment cards

As we press into our few remaining days before the holiday, many of us are taking the time to log on to retailer websites (most often at work) to take care of some last-minute shopping. If you're like most consumers, there are a handful of online sites where you shop frequently. You've probably registered with those merchants, giving them your payment, billing, and shipping details tied to a username and password. Maybe for some of those folks for whom finding the right gift is always a challenge, you might log in to an online search site to look for gift ideas, ask for suggestions from friends in your social network site, or you might even respond to an inbound e-mail pitching a new product idea.

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Slow and Steady Just Might Not Win the Contactless Race

Posted by Karen Webster on 18 October 2010 | 5 Comments

Tags: Contactless payments, New York Times, Payments, Mobile, Credit Cards, Karen Webster

Our long-held view that contactless cards were going to fizzle has really gone mainstream. Take a look at Randall Stross’ piece in yesterday’s Sunday New York Times.

His piece, “Maybe Your Old Card is Smart Enough” makes the point that those [contactless smart cards] emperors really have no clothes. The promise of faster check-out (one of the touted consumer benefits) and lower fraud costs (one of the touted merchant benefits) never materialized – contributing to why there are so few point of sale terminals that accept contactless smart cards in the US, which contributes to why there is so little consumer adoption. He also makes the point that we have been making for years now too – the longer it takes for contactless to ignite in the US, the more likely it is that a better and more beneficial solution will emerge. And, Stross points to a PIN-based card that is but one example of a technology that will make contactless obsolete before it ever gets ignited.

Speaking of ignition, that is really one of the important “lessons learned” here. Many simply underestimated the what it takes to ignite a new product in a complicated ecosystem like payments. I’d love to have $1 for every time an analyst or consultant swore that contactless was the “next big thing” worth betting the farm for. We don’t think that distinguishing between “blips” and “bellwethers” is hard. Getting the rest of the world to listen when you’re going against the grain, often is. Thanks, Randall!

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Why Every Payments Product Needs an Ignition Strategy

Posted by David S. Evans on 26 August 2010 | 10 Comments

Tags: Payments, Ignition Strategy, Startup, New Businesses, Cardholders, More Than Money, Dick Schmalensee, David S. Evans, Contactless Cards,

Hard data are not available but based on my experience billions of dollars each year go poof in the payments industry from investments in products that crash and burn soon after launch. These products didn’t have a sound ignition strategy which should be the foundation of all payments innovation. This series describes what an ignition plan is, why every entrepreneur inside and outside of major corporations should have one, and why investors and directors should insist on seeing one.

Failure itself is hardly surprising. Most new businesses die young and few products become hits. Unless someone really does invent a working crystal ball that’s the way it will always be.

But a lot of money gets wasted in payments because of the failure to deal with a difficult coordination problem. Many payments products provide value only if they are adopted by both buyers (such as consumers) and sellers (such as merchants). They have to achieve a critical mass of these buyers and sellers to provide a valuable product. If they don’t, they will crash and burn, after early adopters lose interest. If they do, they may ignite as an increasing number of buyers attract sellers and an increasing number of sellers attract buyers. Discover ignited. So did PayPal. Pay-by-Touch crashed and burned and hundreds more just can’t get off the ground.

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/commentary

PYMNTS Voice

Prepaid Tips for 2012: Why Fees Aren't Always the Answer

New Global Payment Schemes: Imitation, the Sincerest Form of Flattery?

Will 2011 Be The Year of the Opt-In?

Slow and Steady Just Might Not Win the Contactless Race

Why Every Payments Product Needs an Ignition Strategy

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