PYMNTS Summer School Recap: Day Three
Welcome to our PYMNTS Summer School 2013 Recaps – a series designed to bring our readers everything they need to know from the faculty, fellows and forward-thinking innovators we’ve assembled at PYMNTS Summer School. Each day, a different PYMNTS.com editor will give you a rundown of the best quotes and most interesting ideas from mobile payments ecosystem experts, as well as reaction from attendees and more.
PYMNTS Summer School officially began on Monday, August 12, at the Harvard University campus in Cambridge, Massachusetts, with notable appearances by Dekkers Davidson, CEO of Merchant Customer Exchange, and Faisal Masud, the executive vice president at Staples. The event continued on August 13 with exciting talks from Bill Ready, CEO of Braintree, and Daniel Eckert, senior vice president of Walmart.
All of this led up to day three of PYMNTS Summer School: seven hours jam packed with speeches from key executives at major mobile payments players and emerging mobile powerhouses, and of course, closing remarks that reflected on three days of deep dives into the mobile market.
Module 5 – Digital Wallets and Currencies
Karen Webster, CEO, Market Platform Dynamics (MPD), opened the day’s first module on digital wallets and currencies by reminding the PYMNTS Summer School fellows of an important if oft-forgotten influencer in the shopping experience: consumer habits. A key reason why mobile wallets have failed to capture market share, Webster suggested, is that digital wallets aren’t yet leveraging traditional shopping cues to power new digital platforms.
The MPD CEO quickly unveiled a detailed matrix to illustrate hype versus reality in the mobile wallet industry, and she wasn’t afraid to call out the industry for what she called its “tremendous hype.”
This declaration set the stage for Mario Shiliashki, senior vice president and group head of U.S. Emerging Payments at MasterCard, who took a different approach from Webster in his address. Rather than starting with a challenge, he began by injecting some levity into the conversation – showing a YouTube video that illustrated the pain points associated with mobile payments.
Still, it wasn’t long before he was willing to deviate from the expected industry script.
“MasterPass is our version of the digital wallet infrastructure,” Shiliashki told the gathered fellows. “This is not a MasterCard wallet, it’s part of an infrastructure.”
Shiliashki stated that his company is not alone in its user-first approach. In many examples of successful mobile wallets – Uber, Chipotle and Hotel Tonight, to name a few – payments are taking a backseat to features that provide a magical consumer experience, he noted. He instructed fellows to view wallets as part of an omnichannel shopping experience; one where enhancing the ecosystem around the payment mechanism should be the goal.
Merchant Warehouse’s CEO Henry Helgeson, was quick to take on the issue of mobile wallet adoption from another angle.
“The issue isn’t consumer engagement, the issue is how do we connect with the merchants,” Helgeson told the PYMNTS fellows.
Helgeson went on to define the current mobile wallet marketplace as a crowded ecosystem that is posing a challenge to merchants. Mobile wallet providers, Helgeson said, need to convince merchants that they have value, and that means changing the way they think about their point-of-sale systems (POS). The Merchant Warehouse CEO said that check-ins, QR codes, and compound transactions all fundamentally change POS, and because the shift is so large in the minds of business owners, many will be “gun shy” about pulling the trigger on mobile.
Still, Helgeson left the fellows with hope that widespread mobile wallet adoption will come to pass. The CEO said he believes adoption will happen, though it is likely to be a multistep process that takes years.
Live Case Study #3: Foursquare
Jeff Bussgang, Harvard Business Senior Lecturer and Partner at Flybridge Capital, set the tone for his interactive module by rolling up his sleeves and diving into the session’s key question: why is Foursquare successful?
Bussgang attacked the blackboard, prompting fellows for their analysis of Foursquare’s successes, methodology and monetization. It wasn’t long before Bussgang engaged the gathered fellows in an argument that pitted younger attendees and more experienced fellows against one another. Once the company’s failures and successes were thoroughly dissected, Bussgang moved to frame the case study in the context of the event.
“Who would you rather be today,” Bussgang asked. “Head of Level Up, director of Google Wallet or operating partner at Foursquare?”
While we won’t reveal the answer, we will say that the winner wasn’t Foursquare. With this in mind, Jake Furst, Foursquare’s director of monetization partnerships, took the stage to field questions on his company’s past, present and future.
Furst dismissed the claim that his company never thought about monetization, and cited statistics that indicated Foursquare is still a viable competitor in its field. Furst noted that Foursquare tips are growing faster than Yelp reviews, and that he expects the number of the company’s tips to overtake Yelp reviews next year.
MODULE 6: The New Point of Sale and the Transformation of Retail
As with the day’s first module, Webster once again greeted the gathered PYMNTS fellows with remarks that would set the tone for the next session. She defined the transformation of retail as being about how technology is recrafting the relationship between merchants and consumers.
Jon Stine, Cisco’s director of retail and consumer products practice, took the stage first, and quickly commanded the Harvard lecture hall with a booming voice that focused attendees on the bigger picture.
“Mobile is about immediacy,” he said. “[Consumers] don’t love your apps like you do. Apps are secondary to immediacy.”
Stine’s language was meant to drive home an essential point: retailers need to influence decisions not only today, but in a future where mobile screens are increasingly becoming a way of life. A smartphone, he said, “doesn’t offer strategy, it offers tactics.”
While Stine focused on large retailers and even bigger concepts, Ken Paull, CEO of ROAM, illustrated how small merchants have driven the mobile point of sale (mPOS) transition to date, and he predicted that big things are still in store for players in this sector.
“As hot as the mPOS market is, most of the market is still available,” Paull said, citing the fact that 70 percent of the total U.S. market is still available for mobile expansion.
Paull countered Stine’s heavy imagery with facts that drove home his message. For example, he noted that in five years time, the majority of retailers will be using mPOS systems.
PYMNTS fellows weren’t just treated to facts and forecasts in this module, however. Nadia Shouraboura, the CEO of emerging retail player Hointer, brought the session to a close by illustrating how a truly forward-thinking mobile strategy could not only change the customer experience, but cut costs for retailers.
Shouraboura gave real-life examples of how her retail company is bridging the gap between eCommerce and traditional in-store experiences to create a store that’s so easy to manage, one high schooler can run it. The CEO of Hointer said that the future of retail is about making everything self-service and simple, and suggested with her inspiring story that no idea is too far-fetched when retailers think creatively about how mobile can change the shopping experience.
PYMNTS Summer School Commencement Speech
If the goal of the day’s events was to discuss how merchants and consumers are using mobile, the final speaker’s aim was to illustrate how the gathered fellows could get great, forward-thinking mobile products into the hands of customers using unexpected approaches.
“We thought there’d be no better person to give us that insight than Jonah Berger,” Webster said, before introducing the Wharton Business School professor and bestselling author.
Berger touched on a host of unusual topics from Honey Nut Cheerios to cheese-loving pandas to cats who play turntables, all in an effort to encapsulate how an idea can capture the public’s imagination and spark word-of-mouth marketing.
“Good stories are not just good stories, they carry something along for the ride,” Berger said. “Stop selling. Think about what story is going to carry your brand along for the ride.”
Webster returned at the close of the session to encapsulate not only Berger’s lesson, but the lessons from the entire three-day event.
“It’s not about payments, it’s about reinventing the experience of shopping for merchants and consumers,” Webster said. “It’s not about the device… but moving the experience to the cloud so we’re device agnostic and are leveraging the cloud to drive new experiences wherever those devices will be.”
“This is happening now, and mobile is accelerating the pace at which things are happening,” she said. “This is about what you can do today to prepare for tomorrow.”
Top Three Tweets
Feedback From Fellows
“I think that’s PYMNTS.com has introduced a fresh new approach to industry collaboration that dispenses with the sponsorships, the sales pitches and the more canned talking-at approach that not only dominates, but constrains the industry from soliving complex problems. The result is a generation of very real, new understanding amongst the participants. What we get to take away from this is a more refined understanding of the mobile environment and a clearer idea of what it’s going to take to be successful.” – George Danforth, Vice President of Emerging Products at PULSE.
“I appreciated MasterCard’s perspective on digital wallets, and what it would take to for mass adoption. I felt that was very candid and made a lot of sense. I also enjoyed Henry [Helgeson]’s presentation about how the ecosystem works within the payments industry and how various players interact within each other.” – Matt Inan, Director of Business Development and Channel Sales at eMobilePOS.
“What I thought was really good … I came from the ISO world, and I think it’s a forgotten world. I think its great that they brought some awareness around all partners in the ecosystem in the transaction flow. We often get focused on the big guys, but there are a lot of merchants with standalone terminals that we do have to solve for.” – Misty Novich, Senior Group Manager with Strategic Merchants Relations at Discover.