by Tim Attinger
LESSON TWO DISCUSSION QUESTION: What are the most important, and relevant, consumer activities that surround core payment transactions, and who are the companies that provide them? Click here to respond.
As we come down the home stretch for this semester of PYMNTS University, our focus in our last course is on an approach to growing a payments enterprise that hearkens back to the way payments first began. Payments growth has always entailed the careful management of a distributed ecosystem, bringing participants to both sides of a platform business while balancing a value proposition between them to encourage their continued participation and growth of activity in the network. All the while, payments platforms have never really managed the end-to end delivery of core value to the constituents who use their services. Delivery systems experts and supply chain management analysts are often perplexed by the distributed, multi-party and complex characteristics of the payments business. And perhaps with good reason? Product and service delivery in the payments business, and particularly in the eCommerce channel of payments, looks on paper more like the map of Pandora’s music genome project than a traditional chevron-chart linear delivery system.
Where Does It Come From? As we’ve discussed throughout the semester, and especially in the Cloud Computing classes leading up to this one, the new value exchange paradigm in the payments business is informed by interlinked processing platforms and networked business models. Transactions today come from a much different place. Instead of simply waiting to see every customer purchase show up at the front door, payments players are finding that they must integrate upstream, and downstream, of the purchase transaction to ensure that they see it. As they do so, they learn that tying payments to the ecosystems that manage consumer pre- and post-purchase commerce activity has become one of the most important activities in their enterprise as they invest in growing their ecosystem participants and business.
This new payments paradigm is one in which convergent ecosystems and the developers that serve them engage in tying together their service capabilities and business models to deliver uniquely valuable and differentiated value propositions to their common customers. Mobile players and advertisers are working together to bring valuable, relevant, and timely pre-purchase information to consumers on the go. Online merchant properties are working with product advertisers and marketers to help consumers make product choice, channel, and location purchase decisions while registering consumers to execute their payment commands once those decisions are made. Online retailers are also linking their back-end fulfillment systems with billing processors and logistics companies to deliver up-to-minute purchase and delivery information through one seamless consumer interface.
Consumers have begun to expect that they can, and will, navigate the full commerce continuum, from the moment they decide they actually want something to the moment they have and are using it, through a singular interface and seamless interaction. The companies that are working hardest to deliver that realize that they cannot, and should not try to, deliver on the promise of that full commerce continuum on their own. Manage a consumer’s wish list? Help advertisers put things on that list? Help marketers incent a consumer to take things from wish to want to will buy? Work with social media providers to tie purchase intent to offers, discounts, coupons, and recommendations from friends? Find a store or two — online, multi-channel, or local boutique — from which a consumer may choose to go get that gadget of which they weren’t even aware five days ago and now with which they cannot live without? Assist them in choosing a payment method, and then executing the transaction on their behalf? Provide real-time benefit validation and transaction confirmation as the purchase is processed? Deliver real-time, up-to-date, relevant updates on the progress of purchases as they wend their way from the warehouse to the consumer’s front door? Who can possibly do all of that alone? And why would you even try, when there are so many organizations who are specialists in each of those steps?
Where Is It Going? So, if consumers are looking for an integrated commerce experience – not a shopping cart nor a wish list, but a truly end-to-end shopping experience-why not tie together the best of breed in every step along the way and embed your payments capability within? What’s more, why not create a strong sense of consumer engagement in a comprehensive community-driven payments experience by partnering with the leading adjacent businesses-mobile, eCom, social, online media, retail-to bring a holistic, and wholly simple, commerce capability to market? Well, if you’re among the leading players in these industries, you’re already doing this. Every ecosystem leader of any stature has created and is managing addressable program interfaces (APIs) to make it as easy as possible for major players in other industries to tie their business models together — through an exchange of processes and information — to deliver the integrated value propositions to consumers that they have begun to demand.
These players now work to open up the edge of their networks to each other, unlocking the value proposition at the core of their business for application by other players into theirs. As they do so they have learned that in opening up access to their platform to outsiders and — to some degree one or two steps beyond what is comfortable — letting go of direct control of the application of their payments platform to new business models, differential growth in participants and revenue will follow.
As we drive into our last class, wading with reckless abandon into predictions about how all of this might play out in the marketplace, let’s discuss the evolution of the open platform development approach to the marketplace.
LESSON TWO DISCUSSION QUESTION: What are the most important, and relevant, consumer activities that surround core payment transactions, and who are the companies that provide them? Click here to respond.
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Driving Payments Innovation through Education- PYMNTS University
Durbin Debit 101 (required): Retail Deposits Have Changed Radically Overnight
Debit 201 (Required. Debit 101 prerequisite): Is Prepaid “Debit-Lite?”
Point of Transaction 201 (required): Competition for Consumer Choice
Mobile 205 (required): GPC Payments Value Proposition
Mobile 206 (elective. Mobile 205 prerequisite): Emerging Payments Value Proposition.
Cloud Payments 210 (required): Building Value in the Network
eCom 301 (elective): Evolution of Online Commerce
eCom 302 (elective): Emerging Competition
Mobile 305 (elective. Mobile 205 and Debit 201 recommended): Emerging Markets Mobile Prepaid
Cloud 310: Adding Value to Network Transactions
Cloud Payments 311 (Cloud 210 prerequisite): Monetizing the Information from Payments
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