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Commentary » PYMNTS Voice
Greetings from Rome where I am, ahem, doing a little field work on the adoption of mobile payments outside of the US. Ok, well maybe just a little in between some great fieldwork checking out the coolest shops, restaurants, and museums in this most fabulous city.
Optimists see Facebook’s prospects as almost unbounded. After all, it has almost a billion users and its users spend an astounding amount of time on the site. Even if you replaced Zuckerberg with a dolt, the company ought to be able to figure out how to make gobs of money from having a community that is larger than the population of all but two countries.
Okay, Nick Holland – I’ve taken the bait. Your NFC media advisory today refuting the notion that NFC isn’t to cards what Betamax was to video was simply too good to pass by. You actually selected the perfect analogy. Here is my argument as to why it could end up just like it.
You’d think so given its amended S-1. It is on track to earn almost $1 billion from payments in 2012. In the first quarter of 2012 it earned $186 million in payments and other fees. That was almost double what it earned in the first quarter of 2011. If Facebook’s payments revenues continue to grow at this rate the company would have payments revenue of $978 million for 2012 and exceed $1 billion in 2013. And even if growth stopped dead in its tracks, and payments revenues just continued at the $186 million a quarter clip of the first quarter of 2012, Facebook would have payments revenue of $744 million at the end of this year.
I participated on two panels in the 4th annual Mobile Contactless Forum held in San Fran last week (April 3-4). The agenda, speakers and turnout was really great. I thought I’d share some of my takeaways wrapped around some of my own remarks at the conference.
I was doing some work today on the social commerce application that we’ve been incubating and piloting here at MPD. The application is a SaaS-based toolkit that allow local merchants to capitalize on the online/offline commerce shift that we’ve been talking about for a long time, using mobile and social channels to enable that new commerce opportunity. More on that innovation in a later post, but a couple of things struck me like a thunderbolt as I reviewed our latest pilot results.
Last week I was asked to give my thoughts on what the market obstacles are to payments innovation and what if anything the government should do about this. The occasion was an excellent conference put on by the Kansas City Federal Reserve Bank.
Prognosticators don’t do well in payments. Change happens more slowly than these pundits predict. And even when they learn this they still underestimate how slowly things change. Take cash. People have been predicting the death of cash since about the minute the baby general-purpose payment card was spanked on the bottom in 1950. Yet the most recent Federal Reserve Bank of Boston survey of consumers found that cash use is on the increase—and that’s in the US, a highly developed economy, where we’ve had cards the longest of anyone.
So much for first-mover advantage. PayPal Here was unveiled today as not the first, not the second, and by many counts not even the third or even fourth small business solution designed to turn phones into POS terminals. And, based on what I’ve seen and heard so far, it was smart for them to wait. PayPal Here is a mash up of all of the “good” features of existing dongle-based solutions, and turbocharged with PayPal’s unique set of assets.
Let’s play a little game after you’ve read all of these recent announcements.
2012 ach acquisition ad-supported advertising africa akerlof alternative payment alternative payments amazon amazon fps american express amex android api apis apple application applications at&t atm authentication automated clearing house b2b b2bsynergy banking bank of america barclays behavioral economics big bank excuse billmelater bing blackberry bling nation bloomberg bob dole braintree brian burnseed business business week business wire c$ cmoney capgemini capital markets summit card act cardholders card issuer card issuers card issuing card network card networks card reform cards carte blanche cartes & identification 2010 cash cass sunstein catalyst code catalysts cfpa cfpa act chase check card checks chicken-and-egg china china union pay cloud computing code commerce compliance congress consolidation consumer consumer financial protection agency consumer financial protection board consumer loyalty consumer payments research center consumers contactless contactless cards contactless payments corduro credit credit card credit card networks credit cards ctia cup cybersource dan ariely daniel read data center david evans david s. evans debit debit card debit cards decoupled developer developers development device fidelity dick schmalensee digital media diners club discover disruptive disruptive technology dodd droid durbin durbin amendment e-commerce e-payment e-wallets ebay ebillme ecommerce economics economists economy eft electronic commerce electronic payments element payment services elizabeth warren encryption epayment epayments evans facebok facebook facebook commerce farmville federal reserve fees financial financial reform finovate firefox foreign networks frank frank parry futures g-cash gaming gao general accountability office gift google google checkout google wallet gopayment greatest developments groupon guest payments hagiu healthcare holiday hyperbolic discounting ibm icbc ignition ignition series ignition strategy innovation interchange international telecommunications union internet internet-based intuit invisible engines ip commerce ipcommerce iphone iphones ipo isis issuer jack dorsey jason diaz jcb international jibun bank john donohue joshua wright journal jp morgan justin fox karen webster kathy miller kenya law lending linkedin loyalty m-commerce m-pesa magnetic strip mag stripe magtek making credit safer manhattan mara airolki margaret weichert market platform dynamics mastercard mcommerce merchant merchants merger meters microsoft mit mobile mobile apps mobile banking mobile money mobile payments mobile wallet money transfer more than money mtn myspace national payment card near field communications network networks new businesses new business models newspaper publishing newspapers new york city new york times nfc nilson non-cash obama obopay oliver williamson online banking open platforms other p2p paas patrick gauthier payment payment card payment cards payment engine payment networks payments payments innovation paypal paypal here paypalx paypal x payroll paysimple payvment payware pci pci ssc peter guidi philippines pin platform platforms policy pos prepaid processing psychology pts publishing pymnts quattro reform regulation related publications retail revolution money richard thaler roam data ronald coase saas safaricom schiller schmalensee screening rules sdk search security senator durbin serve shane frederick shopping small business smart-phones smartphone smartphones social social commerce social network social networks software square standards start-up startup startup strategy strategy survey of consumer payment choice swipe fee target taxi taxipass taztag techcrunch technology the payments authority tim attinger traffic transaction costs transactions tsys twitter two-sided market two-sided platforms u.s. bank u.s. chamber of commerce user behavior validation verifone verizon virtual currency visa vivotech vodafone wall street wamu warren buffett washinton web 2.0 wells fargo western union windows wright wsj yahoo yes bank youtube zoompass zynga