Category Archives: Payments

Would you buy stuff on Facebook?

A subset of marketers now have it between their teeth that the next big thing is buying things using Facebook.  This article at econsultancy gives the example of ASOS being the first to launch a fully fledged store front on their Facebook Page.  Is this the future of commerce? – I think not, and it shows a misunderstanding of Facebook’s strategy.

When marketers look at Facebook they see

  • A big online marketing portal where customer interact with your brand
  • A proxy web page where you can interact with a customer without having to put them through a long winded sign up process
  • Flavour of the week.

To be fair to the marketers, Facebook is all those things, but if Social Commerce isn’t making ASOS any money then how should Facebook and Commerce go together?  To answer that, we need to look at how Facebook see themselves.

What do Facebook see themselves as?

Facebook see themselves as internet infrastructure.  The would like to own identity, meaning that you won’t have to sign up for another service again if you have a Facebook account.  To Facebook it makes perfect sense that anyone starting a business today, would simply allow you to log in using your existing Facebook identity.

This gives Facebook a lot of data.

Facebook use their data to define the relationship between entities.  So for example

  • Person likes Brand
  • Person listens to song
  • Person attends event
  • Person watches movie

Using verbs is the big thing I took from the #f8 conference.  Going beyond like to “listened to”, “watched”, “attended”.  As a brand, this is the next logical evolution of using Facebook.  Not only can you engage your customers, you can see which customer interacted with which marketing activity or product.  This is what Facebook call the “Open Graph”.  It’s a word you’re going to hear a lot more of in the coming decade.

Where does this leave Facebook Commerce?

What’s missing from the list of entity relationships earlier?

  • Person buys thing.

“Person bought ASOS Black Shoes” is something I can see other people clicking like and commenting on.  It happens today, it’s just not automated.  Yet your developers can build that, right now.  If you already have that data in your database, it needs to be in the open graph.

This changes Edgerank significantly, because there are a ton of activities that customers were unsure about clicking “like” or “share” with.  This new lower friction brand interaction is where the money is.

What’s next for Facebook and Retail?

Brands get lost in the Facebook page and think of it as a landing page.  Contrast this with the new Nike running mobile app which updates a customer’s timeline with each run.

Applying that to online, or bricks and motar commerce; I’d consider

  • What actions (verbs) to your customers do with your brand?
  • Which of those brand interactions can you capture via the open graph?
  • Which product interactions can you capture?
  • How can you use mobile and facebook to add value?
  • How can you use location and facebook to add value?

Imagination is the key.  What are your thoughts for how to move someone from “viewed” to “bought”?

Hey Techrunch: This is What’s really happening in Payments in 2011

So Techrunch have been spending a lot longer looking at Payments lately.  Their high level overviews suggests that they just don’t get it yet.

The article suggests the 5 or flavors of the month in Payments (Facebook, Square, Apple, Google and PayPal) respectively, all have a viable play at the wallet.  Which is fair, but misses the big picture.  They’re not playing in whitespace.  Payments already happen.

What’s really happening

Let’s skip right past the hyperbole and make a bold prediction.

2011 isn’t the year for payments at all, because nobody quite see’s all the parts of the puzzle.  Bricks and Motar retail is a $4 Trillion industry.  Online Commerce is a $400 billion industry.  Mobile, Social and Virtual Currency payments combine to about $4 Billion in 2011 (US based figures, do some googling…).

Defining the Change

The likely outcome is that these will all converge.  They can only converge by working with the infrastructure that already exists within western markets (emerging markets are a much more open play for startups).  Try as they might in the West the start up brigade cannot circumvent financial institutions or the schemes.

By the same token: Try as they might, financial institutions can’t ignore the fact that a large percentage their customers are on Facebook.

What financial institutions need to do

So your customer is on Facebook, and everyone is gunning after payments, outsourcing CRM and your brand is losing value.  Whether it’s PayPal, the Mobile operators or the startups, the squeeze has started.  Your branch network and existing customer base is a great asset, but consumers are changing.

If I were a financial institution I would:

  1. Develop a strong presence on facebook
  2. Build your e-portal into the page on facebook
  3. Talk to customers via the web chat / page
  4. Help them with the e-banking portal
  5. Speak to facebook about a revenue share on virtual currency payments funded via ACH / Direct Debit

What the startups need to do

Google are interesting, they’re making a more direct play at sitting on top of Mastercard, and working with verifone to win the physical card sales, and bring those into the searchable world.  Selling advertising revenue to reduce interchange is smart.  Facebook, Square and Apple all have some way to go to reach that point, with segmentation strategies.  Amazon too have a horse in this race.

If I were a startup I would:

  1. Work with schemes (Visa / Mastercard) under a revenue share
  2. Develop an e-wallet capability
  3. Sell that to financial institutions as a whitelabel, brandable product

The dream would be if you knew a company who already works with financial institutions for technology, that was able to do all of this for you.  In my opinion there is a killing to be made, helping banks go social.  Consultancies will spring up in this gap in the next couple of years.  Although having seen a recent KPMG presentation on the subject.  2011 isn’t the year for payments.

I have my eye on 2014.

Your thoughts.

  1. Who’s going to win the start up race?
  2. Which banks are embracing social well?
  3. Does anyone in the market have a holistic view?

Understanding Social Media – Four Steps to Social Media Revenue

Social Media is very much the buzzword at the moment, because the board level execs, and therefore middle management have recognised the massive user base.  Their thinking is along the lines of “We know there are a lot of users there, can we plug what we do today into that?”

In a word, No! It’s a very different space.

Before you can plug your product into a social space, your brand and business needs to be on there.  You’re dealing with real people in a much more intimate way than via a call centre or your website.  The rules are different.  Before you can even think about making money from it, you have to accept you have some learning to do.  Then we can talk about monetisation strategy.

Four Levels of Engagement

Joe Wiggins at Perfect Circle PR, lists the four levels of engagement in the financial sector.

  • Let’s Be Social – simply using social technology to build the brand and community
  • Enlightened Engagement – informing customers through reviews, experts or other respected sources
  • Store of the Community – customers help drive product selection assortment and merchandising
  • Frictionless Commerce – the buying experience is completely redesigned to create a fully customer-centric experience

Let’s be social

Step 1 “Let’s be social” whilst a starting point, is usually a siren of a business who’s marketing department convinced the board that they needed to “just put out press releases” because the competition is doing that.  This is akin to using a telephone for morse code, a waste of potential, but a step in the right direction

Enlightened Engagement

This usually happens when someone high up in the business has the Eureka moment and gets it.  It’s when the business recognises that their customers are talking to each other, and their friends about the business and interactions with your company.

It’s a paradigm shift.  Not everyone outside your employee list is against you.  In fact, some of them really like you and want you to succeed!

Social Media gives you insight to those conversations, and as an insight & perception management tool is invaluable.  This is real time feedback, from people who want to help your brand or business.

Store of the community

Also known as an “App Store”, is a big topc in itself, and a massive investment for businesses that are not already on the cloud infrastructure route.

The idea of having an ecosystem and marketplace of developers vying to make your channels better, for free seems like a tempting one.  It’s entirely possible with the developments in coporate IT Infrastructure and software to begin to make your services open for integration with clients, or 3rd party systems.  PayPal X is a solid example of how to do this in a gentle, risk averse way.

An open platform a huge stepping stone onto the quest for the holy grail…

Frictionless Payments

I’m willing to bet everyone see’s the value in this, pay any merchant from any account, anywhere.  On a pure technology roadmap, you could certainly get there without going social… but then how do you interact with this new world of Social Networks once you get there?

You may have the worlds greatest product, but if it doesn’t play well with social networks you’re stuffed.  More importantly, if your business doesn’t support it on the human level, consumers won’t trust you, and the service will fail.

That’s why it is vital your business follows the social and open technology and values equally. It’s as much about how you do business, as the technology.

Spend time getting to know your professional and human audience.  Listen to them.  Interact.  Then let them build the services they want, on top of your core value!  In effect the community will do the integration for you, you just have to open the front door, by being a platform.

What do you think?

  • Will business truly embrace social?
  • How would you implement it?

Want Mobile Payments?

The EDC 2009 Global Payments Survey suggested that in the USA, the mobile would replace the wallet over the coming half decade. A bold statement indeed, and something we have all heard before. It’s an argument that is winning traction since Square has won itself a lot of attention, mostly for some snazzy web design, and having a certain Jack Dorsey at its helm.


The problem facing these upstarts is that some very exciting companies are trying to create a solution where the consumer doesn’t see a problem. Perhaps the greatest degree of disruption will come from developing economies. Payment processors and banks have been attempting to load these territories with credit cards. Whilst this might give a short term revenue burst, where is the strategy?

Africans are already using SMS as a form of payment, because its simple and low tech. Payments in the western world need to be simpler, and have no barrier to entry for the consumer. The consumer has a phone, and has a bank account. They don’t have a payment mechanism that works as well as the card.


Until that is the case, we’re in an interesting but risky place with mobile. mPayy and oboPay both show a lot of promise in solving the Mobile Payments problem. However until someone is able to package this service and sell it to the banks, Mobile Payments will not take off. Given that most Payment Processors still think “e-commerce” is the future (scary I know), that could take a while.

Payments Innovation

Is the payments industry and innovation diametrically opposed? Banks, payments infrastructure & the business model we use has been the same for at least 30 years if not more.

Are there good reasons for this?


Looking at the payments sector, you have very large slow moving clients who until the past decade have been entrenched in a risk averse position. This has lead to the rise of compliance, propriety standards and data silos.

In effect the industry built walls around itself and then asked the consumer to come to it. The consumer, who had little choice at the time took the best offer on the table.

In a sub prime housing bubble, with strong profits and even stronger bonuses, what motivation was there for change? The collective wisdom of all in the industry was that the security offered by existing infrastructure and Gatekeepers worked well.

We had an evolutionary change when Generation X revealed to the world it’s new age. The Internet brought The Information age. Sure enough, 5 years later most banks were thinking about online banking. A typically slow, but measured reaction given the sheer amount of security required.

Now Generation Y has revealed its own masterpiece. We call it Social Media. No doubt like “World Wide Web” and “Netscape” Social Media and 2.0 are terms that will die with the buzz that created them. Yet when the dust settles what will remain is the value.

The Generation Y consumer’s core values differ greatly from the Payments Industry. Generation Y wants instant access, 24/7 and to own the interaction. The risk of not granting this wish is that Generation Y are not shy about rubbishing bad service. Or on the flip side praising good service.

How can the payments industry take advantage? This is the challenge of innovation.