Payments Innovation

Sizzle Or Fizzle: Alexa's Red Hot Week And Blue Coat’s … Well, You Decide


The first week of June began with probably the biggest sizzle-y story of all: the unveiling of the 12 new skills that 14 companies across payments taught Alexa. Companies as large as Visa, Discover, FIS, Fiserv, Vantiv and Western Union, and diverse and scrappy as DaVincian Healthcare, EXA, OnVocal/People Power, BIG, and Zipscene/Feasty got their voice-enabled commerce mojo going and reimagined the financial services world in a variety of new ways.

Now, the PYMNTS community will cast their votes – and winners across a variety of categories, including the coveted 2016 Alexa Challenge Champ – will be crowned on June 20, 2016 – live. Don’t miss it!

So what other sizzles and fizzles rocked the payments and commerce world this week?


Mobile Order Ahead
Chick-fil-A vaulted to the No. 1 spot in the Apple App store last week for one and only one reason: it made mobile order ahead a new feature in its app. Responding to the very pointed data that 48 percent of people would rather go hungry than stand in line to get their food, Chick-fil-A got busy designing an experience that would make life easier for its customers who just want to get their delicious sandwiches in the stomachs of themselves and their hungry kids as quickly as possible.

Since this chain does more sales per store than any other QSR, it clearly wants to be sure that nothing stands between it and its ability to keep their top ranking in check.

Chick-fil-A also shows the power of being a fast follower. They weren’t the first QSR to deploy mobile order ahead – Taco Bell and Starbucks were, and have shown the importance of that feature in driving adoption of mobile apps. With this move, it appears that Chick-fil-A has certainly satisfied the hunger of their loyal fan base who loves their now mobile-optimized chicken sandwiches.

Branded Digital Credentials
Visa made news earlier in the week when it launched its Visa Digital Commerce App. Designed to enable its issuers to create a branded digital app for managing card credentials, it is also capable of enabling payments in-store (on Android phones where NFC is supported) and inside of Visa Checkout.

Immediately the media touted the move as Visa’s move to enable the creation of issuer-branded mobile wallets. That really misses the point. What makes this a sizzle is that Visa’s Digital Commerce App created a branded digital credential platform that can enable commerce while laying the tracks for those credentials to become smart, digital credentials.

Smart enough, say, to know what loyalty programs cardholders belong to, so that they don’t have to remind the cashier at the store before checking out or worse yet, remember to store that card in the digital wallets that no consumer really wants to maintain. Or to have offers – relevant offers – automatically appended to their digital account and redeemed – instantly – at the point of sale.

Todd Brockman, SVP of Issuer Processing at Visa, acknowledged that Visa's Digital App isn’t a wallet, but the “place where it all comes together” digitally for the consumer and the issuers. It’s really time to put the wallet moniker to rest, don’t you agree?

Subscription Commerce
Both Google and Apple made news this week when they announced that they will each reduce the fees that they will take on subscription sales from apps in their app stores. Instead of a 70/30 split, both will make the split 85/15. Apple will knock the 30% down to 15% only after the first year of the subscription, Google doesn’t care and is slashing its fee in half to 15% immediately.

This move, of course, is coming at a point in time where there is general apps fatigue. Tons of published data show how few apps consumers really engage with despite how many they may download. The hope on the part of Google and Apple is that by hooking consumers into a subscription model, app engagement will increase. Provided, of course, that what the consumer is subscribing to is something they want to use/play/watch/listen to, etc. on a regular basis.

The place where this can turn into a fizzle though is how the payments part of this plays out.

Apple, of course, requires that everything in its app store be paid with one of the largest registered set of digital credentials on the planet, iTunes. That shuts out a lot of players like, for example, PayPal and Android Pay. Google gives app developers an option to offer whatever payments method they think their end consumer might like to use so they can therefore handle payments themselves.

Stay tuned.


Alt Lending
Keep the streak alive! Yes, alt lending has the distinction of being on our Fizzle list ever since we started keeping count. As a sector it’s having a pretty rough year – and the last several months have been gut-wrenchingly horrible. This week, between the rumors that Laplanche might be gathering money from private equity firms to take over Lending Club (which the investors might, at this point, be happy to let him have), to Prosper getting the cold shoulder from Lending Tree and CreditKarma, to Lending Club’s site going down and causing at least one investor to tweet out that he was worried that the place was shutting down, to the regulators launching investigations right and left (not to mention the usual vulture lawyers), it was not a great week. We suspect that good weeks, moving forward, will be few and far between.

We can now really stick a fork in it. CurrentC is done – or will be for sure by June 28. All mobile apps deactivated, all gift card balances will disappear. Dead as a doornail. Over and out. What’s a billion bucks between a few (big telco) friends?

It also wasn’t a great week on the device front. Analysts don’t think that there’s enough new cool stuff to juice iPhone 7 sales to anyone but the Apple fan boys. Seeking Alpha reports that worldwide, business tablets and smartphone shipments declined in Q1 - 35.5 percent and 21 percent, respectively - as upgrade cycles are lengthening thanks to software upgrades that make older units serviceable. And then there was the heat that Verifone took after reporting that the integration and certification backlog associated with EMV in the U.S., combined with softening demand in developing markets, have cut into sales. It’s why everyone is looking to the cloud.

Sizzle or Fizzle? The Blue Coat IPO

The news that Blue Coat Systems is prepping to go public may have been a bit of small cheer in an IPO market that has had all of the kick of a dead mule. But maybe people should mute the excitement.

First, consider the fact that an IPO of Blue Coat – which, in tandem with Bain, its private equity owner, filed among the most preliminary of documents with the SEC last week (with no offering price range, or number of shares on offer) – would be only the third U.S. tech firm to go public this year.

That speaks volumes about just how ambivalent tech captains of industry, whether at the helm of the firms themselves or backing the tech upstarts as venture capitalists or private equity shops, really are. It’s almost as if everyone on the field is standing stock still, trading sidelong glances at one another to see who actually will dare to pick up the ball and start running.

The Blue Coat filing comes as this is the slowest year for tech IPOs since 2009, in the midst of the financial crisis, while the firms that are publicly traded in this space, including Palo Alto and FireEye, have seen shares hit hard.  There may be a bit of concern about bubbles within technology, but more than that, shares in security firms have been slashed not solely on valuation, but on macro concerns, too, namely that enterprises are pulling their spending back a bit. That does not bode well for firms that rely on technology refreshes.

For Bain, the $2.4 billion take-private of the firm just one year ago may reap rewards – if the shares price well. But there’s a lot of debt to consider, to the tune of $1.8 billion, which sort of dampens the party, at least for using some of the proceeds, if in fact that debt is retired. 

For Blue Coat itself, there are two problems that could confound a happy ending to a public debut. In the first case, VC firms have spent less than 10 percent of their dry powder on cybersecurity firms, which would signal that they see better value elsewhere, and perhaps in many other places.

Secondly, with slowdowns warned across publicly traded companies, the likelihood is that many of these firms are going to try to grab market share, if the pie is not growing as fast as it once was. And that may mean competing on price, which in turn may hit margins and make for a bumpy operational road ahead. 



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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