Uber CEO Suggests App Experience Trumps Payments

“All of Uber’s old-school power users have gotten used to Uber and simply expect our service as a baseline at this point. What I mean is that as you have gotten used to Uber, your expectations of basic fundamental service have risen. We like being held to a higher standard, but there are significantly complex technology and business model fixes to bring the Uber thunder you guys are looking for,” Travis Kalanick, CEO of mobile on-demand car service Uber, October 29 via Facebook.

Name a player in and around the payments space – retailers, restaurants, and chances are they’re paying close attention to the interest Uber has generated with mobile payments.

Since bursting onto the San Francisco startup scene in 2009, Uber has grown to a valuation of more than $3 billion dollars, expanded to 20 countries and secured double-digit month-over-month user growth. However, this success has not been without its drawbacks, namely, as this quote from Kalanick suggests, that its users are becoming increasingly demanding of its app’s performance.

But, bad news for Uber may actually be good news for payments in that the statement sheds light on the burning question of how the mobile wallet ecosystem may be expected to develop going forward. Upon closer inspection, even Uber’s troubles are paving the way for mobile payments, becoming emblematic of a “big idea” in the sector at the moment.

Kalanick’s words are proof positive that payments have become invisible in Uber’s app, and that what Uber’s consumers are most focused on is the overall app experience, not payments.

This interpretation illuminates questions raised in our 2012 article “Karen Webster Sizes Up the Rapidly Changing World of Payments,” in which Market Platform Dynamics (MPD) CEO Karen Webster discussed whether existing payment networks would become wallets, or simply “a choice within wallets” as in PayPal’s popular payment app.

“Unless that is decided soon, and the business model questions related to this for the networks are thorny, PayPal will have had a long lead time in plowing the multiple tender type ground, and consumers might not see enough value to move away from that wallet to something new,” Webster said, addressing the subject of payment network mobile wallets, in March of 2012.

Uber’s experience provides evidence that consumers are increasingly looking for a multi-tender wallet with a high degree of functionality, and that IP-enabled devices, such as Square Wallet, and network-focused wallets may not be what consumers want from their payment experience. Further, the statement supports observers who have suggested that the key to adding value to mobile wallets may be adding non-payments features such as loyalty cards, coupons and more.

To learn about this developing trend, read “Making Mobile Wallets About More Than Payments.”



B2B APIs aren’t just for large enterprises anymore — middle-market firms and SMBs now realize their potential for enabling low-cost access to real-time payments and account data. But those capabilities are only the tip of the API iceberg, says HSBC global head of liquidity and cash management Diane Reyes. In this month’s B2B API Tracker, Reyes explains how the next wave of banking APIs could fight payments fraud and proactively alert middle-market treasurers to investment opportunities.

Click to comment