American Express — financial services’ resident sick patient these days — managed to capture most of the attention and oxygen in the ecosystem last week. With the sudden and unexpected shuttering of its enterprise growth group, a tough earnings report, fascination with what its share price freefall means and CEO Ken Chenault’s surprisingly optimistic and future-looking take on all of it, Amex really managed to take up center-stage residency.
Second only to the international stock market freefall, of course, and the hit to payments stocks that it has delivered.
However, there was other news. And, as always, we were there watching it all. And it can be summed up in three words: faceoffs, pair-ups and buyouts.
While no one can “square a circle,” so to speak, it seems that First Data is surely circling a Square right now.
And will go head to head following the announcement that First Data will be releasing Clover Go.
The EMV-enabled card reader plugs and plays with either iOS or Android smart devices and can operate through a Wi-Fi or cellular connection. It is also extremely similar to Square’s offering.
“While the Clover platform serves businesses of all sizes, Clover Go is especially beneficial for businesses with mobile workforces or entrepreneurs just starting out who want to accept transactions while complying with the EMV liability shift,” Dan Charron, executive vice president and head of global business solutions at First Data, stated in a press release. “Clover Go enhances our Clover product portfolio, which is designed to grow alongside our business owner clients as their needs evolve. Whether a business owner wants a card reader or the full Clover Station, First Data has the solutions that help businesses prosper.”
The reader works in concert with the Clover Go app, which additionally allows merchants to assign dollar amounts, including tax and tips, to inventory, as well as view transaction-level detail and the integration of data across all Clover devices that a business might use.
“When we support major arena events, it’s critical that we can process anywhere from $100,000 to $300,000 safely and securely in only a matter of hours,” Cameron Garner, director of inventory control and risk for Salt Lake City-based Fanzz, a merchandise vendor for concerts and sporting events, commented in the release. “Clover Go makes it easy for us to accept payments on the fly as customers move through the arena. Better yet, being connected to the Clover platform allows us to customize the devices based on the specific product offerings of visiting sports teams or recording artists — all of which I can monitor via the app on my phone.”
Square CEO Jack Dorsey not only got to deal with emerging head-to-head competition from the 45-year-old company that also happens to be the world’s largest card processor but he also got to handle a cornucopia of headlines announcing that he is no longer a billionaire. Due to both Twitter’s and Square’s miserable stock performance, Dorsey is no longer a member of the human unicorn club, as his current valuation now clocks in at a paltry $944 million.
How will he make ends meet? We imagine the Kickstarter campaign will start any minute now.
In further evidence of what can only and best be described as a new era of good feelings between Visa and Walmart Inc., Sam’s Club members will now be able to pay in store with their Visa credit cards.
Visa, until now, has been a rather inconsistent payment method at Sam’s. Visa-branded debit cards were not a problem, nor were prepaid cards. Visa credit cards additionally worked with Sam’s Club online, as well as at gas pumps in Sam’s Club-operated gas stations.
But if one were shopping in store and in need of paying for a cart laden with wholesale goods, yeah, not so much. At the POS, Visa credit cards were a big nonstarter. Or, at least, they were until everyone started feeling the love.
“Everything we do is in an effort to better serve our members and extend the value of membership. By accepting Visa credit cards, we are giving our members more ways to shop that are convenient for them,” said Tracey Brown, chief member officer at Sam’s Club.
“Sam’s Club is the eighth-largest retailer in the U.S., and we are thrilled to open up Visa credit acceptance in their more than 650 clubs across the U.S. and Puerto Rico,” said Ramón Martín, senior VP of merchant solutions for Visa. “Whether in person or online, our goal is to ensure payments are fast, easy and secure for cardholders everywhere they wish to shop.”
Along with the access for Sam’s customers at the point of sale, the new agreement between the two firms will also bring Visa Checkout to Samsclub.com later this year.
It is also the latest evidence that Walmart has lost interest in fighting an unending war of attrition with Visa over its swipe fees. The Sam’s announcement follows an announcement the previous week that Walmart.com will be compatible with Visa Checkout going forward. “We are seeing tremendous Visa Checkout growth as we enter 2016 and are greatly encouraged by the enthusiastic response from consumers and merchants alike,” said Sam Shrauger, senior VP of Visa’s digital solutions. “By re-engineering the Visa card for the digital world, we’re delivering a better way to pay through connected and mobile devices.”
That announcement followed the news that Walmart Pay will also be Visa Checkout (and Visa credit card) compatible.
Why the change of heart from Walmart?
Walmart has offered no direct comment on its recent feelings of friendliness toward a card network that a former CEO once said he only wanted to see suffer. But it is possible to make two pretty conservative guesses.
Having lost its crown to Amazon as the world’s largest retailer by market cap, Walmart arguably has more pressing priorities than fighting a war of attrition with the world’s largest card network that can only harm them both, while benefiting both of their digital competitors.
Plus, if Visa’s data is correct and Checkout shoppers tend to convert into buyers 86 percent of the time, with a 51 percent higher conversion rate than users with traditional checkout, well, the numbers just add up, and Walmart needs those sorts of frequent buyers, especially as it has to take on Amazon’s heavily converting Prime cult.
And, marketing people, who only want to make sales, seem to be finally driving the bus at Walmart. The fastest path to reducing interchange is, of course, to make zero sales. Guess that message might have gotten through to the finance folks?
Verifone made its latest move to expand its U.S. and Canadian offers for retailers through a big acquisition this week; the firm has announced an agreement to grab up AJB Software Design.
AJB is a Toronto-based provider of payment gateway and switching solutions for large merchants in order to offer an end-to-end payments solution.
AJB currently counts 150 large retailers in the U.S. and Canada as clients, and through its gateway, nearly half a million payment devices are connected. Additionally, the firm connects devices from Verifone and other providers to more than 100 processors and applications — including government benefits, stored-value cards and fleet cards — that are required by supermarkets, c-stores and other merchants
Verifone, via the acquisition, can enable its partners (such as ISVs and acquirers) to deliver payment and commerce services to keep up with merchants’ demands for more simplicity, security, flexibility and functionality.
“Merging AJB’s solutions and expertise with Verifone’s breadth of services and systems expertise will provide retailers multiple options to better manage and secure their payment infrastructure and provide more value to customers,” said Jennifer Miles, president of North America for Verifone. “And our partners will be able to provide this remarkable level of flexibility and functionality to their clients as well.”
AJB will also provide Verifone with an EMV solution certified by major Canadian banks and processors and support for Verifone and non-Verifone devices — increasing merchants’ ability to manage and seamlessly expand their payments systems and the ability to offer merchants a number of subscription-based hosting options.
“Combining AJB’s offerings with Verifone’s services creates an unmatched set of hardware-neutral solutions — giving merchants the ability to select from a wider range of products that best meet their business requirements,” said AJB Founder and President Naresh Bangia. “Ultimately, this enables AJB and Verifone clients to receive stronger value and support — all from a single vendor.”
So, what did we learn this week? When the competition gets tough, the competitors start getting very serious, by forcing a confrontation with the competition (in the hopes of getting them gone from the market), making allies in unexpected places or, when all else fails, just straight buying out the best idea to keep an edge on the market.
Eyes open, everyone. The landscape at the end of 2016 might just look a lot different when it comes to what companies are allies, what companies are enemies and who is alive to fight another day.
We’ll keep you posted.
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