Reaching Toward Critical Mass in Payments
In payments, innovation is as much as art as science – in terms of finding the balance between buyers and sellers, and reaching critical mass for both sides, as BarclayCard’s Nick Kerigan explains.
The discussion took a turn toward a concrete example in the form of video game consoles, as posited by Schmalensee, where the question remains as to how new games can support new consoles and new consoles can spurt the continuous development of new games. The trick? Pricing the console low enough so that there is what is tantamount to a “public promise” that pricing will be low enough to spur adoption by consumers (and developers), while at the same time lending credibility to the game makers that developing and marketing new offerings will be worth the time and effort.
“When I think about the learnings we’ve had in contactless in the U.K. since 2007, you’re trying to get critical mass on each side, and there’s really kind of subtle learnings that you get through experience,” where insights come into play delving into consumer behavior, said Kerigan, and then it becomes apparent the importance of other initiatives, such as training the staff within the actual merchants. “That’s not obvious when you are starting out in a major program,” continued Kerigan. “You learn some of the smaller prompts that actually become quite important,” he added, with true value realized upon moving toward critical mass. Of special importance is providing concrete use cases that demonstrate the value-add of technology as it comes aboard an enterprise.
Added Schmalensee, “There’s so many business models that would work brilliantly at scale, but getting them to scale, you often find new bumps and hurdles that you hadn’t anticipated … Being flexible enough to learn [is key],” he said.
