Merchant Innovation

Payments And Commerce 2016 New Year’s Resolutions

It’s official — 2015 is a thing of the past and the whole of 2016 yawns widely before us.  

Which means resolution season is officially upon us, as the beginning of the year is when all of us like to at least believe that starting over fresh is a legitimate option. That 10 pounds of holiday cheer we managed to put on? Time for the gym. Bank account being measured in the red and in negative numbers? Time to invest in some fiscal restraint. Seen Star Wars four or five dozen times? Well, there’s nothing wrong with that — don’t let anyone tell you you need to change.  

Some resolutions stick. Others … well, let’s just say that gym always sounds like a much better idea in theory than six months into that recurring subscription.   

But people aren’t the only ones who can resolve to do a better job bringing their A-game in 2015 — or at least human people. After all, under the law corporations are people, too, and we at PYMNTS think it is unfair to leave them out of the New Year’s resolution fun.  

So we decided to write some resolutions for a few of our favorite PYMNTS players.

For example:

Apple

Resolution: Avoid declaring 2016 “The Year Of … Anything”

While it was just a hair under a year-ago that Tim Cook famously declared that 2015 would be “the year of Apple Pay,” in some ways that declaration feels like it happened a long time ago, in a galaxy far, far away.

Because as it turns out, 2015 wasn’t quite the year the team at Apple was imagining, for when it comes to its emergent payments system – usage is in the 5 percent of eligible users (right phone at the right merchant, e.g. has NFC). Merchants aren’t exactly falling over themselves to accept it and many international banks spent much of 2015 resisting Apple’s charms (mostly over the possibility of paying Cupertino a percentage of their swipe fees).

Sure some progress was made — Apple looks like it might just make it to China in 2016 and with an assist from Amex Australia and Singapore on the menu — but on the whole 2015 wasn’t the year that Apple Pay had hoped for. 

The CFPB

Resolution: Don’t write anything that you wouldn’t be comfortable seeing on the front page of The New York Times.

The CFPB is no stranger to stirring up controversy and so it comes as no surprise that the Consumer Finance Protection Bureau has left a trail of angry individuals behind it — in some sense they might even note that is an important part of their job.  

But the type of anger the CFPB managed to uncork earlier this year was a little unusual in that the complaint was about what regulations they were passing or enforcing — and instead about the tactics the groups was using to enforce said policies.

In an attempt to curb excesses in the auto-lending field, the CFPB decided to make a test case of Ally Bank, to such an extreme degree that the CFPB was accused of strong-arming.  

The attempt to use a bank’s need for other regulatory approval to force them into accepting a ruling that might have otherwise dealt with a court challenge was exposed since the CFPB and their lawyers described the plan in great detail in emails that were later made public.

“Ally may have a powerful incentive to settle the entire matter quickly without engaging in protracted litigation,” the agency’s lawyers wrote, noting that the company’s failure to secure approval to become a holding company would force it to divest itself of key businesses, primarily its insurance subsidiaries.

That decision against Ally was incidentally worth $98 million, making it the largest punishment of its kind in auto-loaning.  

Amazon

Resolution: Adopt as corporate motto, “anything you can do, we can do better.”  

Amazon has had an undeniably successful 2015 as the nation’s premier eCommerce player.

But it thinks it can do better.  

Which is why it is taking on so many other verticals. This year has seen Amazon run after same-day delivery, ride-sharing, grocery, travel booking, the IoT, media streaming, package delivery (with maybe even its own fleet of 747s), meal delivery, handmade goods and motion picture production.  

And in 2016, maybe even an Academy Award. Yes, Jeff Bezos wants an Oscar. He’s not even remotely kidding about that.  

Sure things don’t always work out. The Fire Phone debacle of 2014 shows that even Amazon can have a big and horrible miss every now and again — and Amazon jumped out of travel booking almost as quickly as they entered earlier this year.  

But Amazon’s share price has picked up 125 percent over the last year, and that kind of success has earned Amazon a lot of investor goodwill — and perhaps a little bit of leeway.

A long way of saying, if Amazon wants an Oscar — well, we won’t be entirely shocked when a drone flies on stage to grab the Best Picture Award on Mr. Bezos’ behalf.  

Uber

Resolution: Don’t bite the hand that feeds you.  

Uber is a press magnet. They are hailed in the tech press as the innovator who showed the world what the on-demand economy was all about – and one with the guts to take on regulators the world over. They made the concept of “permissionless” cool way before the blockchain hijacked the term – marching (well driving, really) into cities asking for forgiveness and not permission. By the time the regulated monopolies called taxi companies organized and complained, Uber had built legions of devoted users who were more than happy to go to bat for them to keep them in black cars.

Their “forgiveness and not permission” policy has also earned them their fair share of unfavorable press, or at least lots of press about the consequences of being “Uberized.” Taxi drivers the world over think they are literally an evil force and have gotten some press on their side. Labor activists accuse them of abusing the word “contractor,” public safety advocates have a lot of questions about how rigorous Uber actually is when it comes to screening drivers (though in fairness – the drivers seem to often be in more danger from the passengers). Then there is CEO Travis Kalanick.

That’s where the slope starts to get a little slippery.

Reporters call him the CE-BrO of Uber — and they do not mean it nicely.  

Given that it is understandable that Uber’s executive team is occasionally less than thrilled with the press, it is even understandable if they are slightly hostile.  

What is wholly incomprehensible, on the other hand, is why an Uber executive would suggest openly and in public that the company worked hard to dig up dirt on the personal life of a female reporter who had said some things about Uber that Uber didn’t like. And by openly and in public we mean at a dinner where the editor-and-chief of BuzzFeed was present and could hear what he was saying.  

Oops.

Now technically that event happened right at the close of 2014, but since Uber spent much of early 2015 apologizing for what they swore was a totally misunderstood comment  — a comment that was universally panned as “sleazy” and “disgusting” — we think it might just rank as a New Year’s resolution for 2016 as well.  

FinTech Unicorns

Resolution: When the going gets tough, better go for profits.

How many times have you heard someone offer you a compelling and supposedly inspiring piece of advice that goes something like … “When the going gets tough, the tough get going.” It’s a phrase that infers that when things are looking bad, those worth their salt, dig in and overcome the obstacles that might be standing in their way.

We think that is the inspiration for the 2016 resolution of unicorns – but with a slight twist. When the going gets tough, better go for the one thing that everyone loves – profits.  

Because while a year-ago it seemed obvious that giant piles of funding and an inflated valuation were unqualified goods — this year, things aren’t quite so sunny. Because someday, maybe it is fundraising time, maybe it is IPO time, maybe it is just time, someone, somewhere has to justify those great big numbers.

Because as we’ve seen, at some point, companies (and there are now oodles of them) with those gargantuan valuations, are going to be called upon to actually prove that there is a “there-there.”

Something that unicorns-in-waiting can probably expect to see and hear a lot more of in 2016 – the year in which investors have their own resolution: look before you leap (or write more big checks).

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