Labor Day marks the unofficial end of summer, and what a season it’s been for the payments industry.
As we get ready for autumn, PYMNTS.com brings you its Top 10 most popular stories from Summer 2013, highlighting a mix of commentary, analysis, news and original reporting. From the Durbin Amendment to Google Wallet’s demise to some head-turning predictions and more, our Top 10 list is required reading for anyone who has their finger on the pulse of payments.
PYMNTS.com's Top 10 Stories Of Summer 2013
“There are six forces that will fundamentally reshape the way this sector operates over the next five to 10 years. You can bet all of the soft shell crabs in Maryland and salt-water taffy at the Jersey Shore that these six forces will impact each and every player in this space in some way. And, there are only two outcomes: you can lead the creative destruction that these forces imply, or sit back and be the one who is creatively destroyed.”
Our most popular story this summer is representative of the payments landscape as a whole in that it’s already eyeing the future. On August 19, Market Platform Dynamics CEO Karen Webster gave her take on the six biggest forces that will shape payments in 2014 and beyond, and encouraged those who want to be major players in the industry to start planning now. This post covered it all, from interchange, to EMV, to loyalty and more. With that in mind, perhaps it should not come as a surprise that despite being published only two weeks ago, it’s already our most popular story of the season.
If you’re one of the few in the industry who haven’t read this breakdown yet, you can catch up here.
“Leon’s ruling today echoes the voices of retailers who have been fighting against the law since November 2011.”
On July 31, the payments industry received perhaps its most impactful news story of the summer when U.S. District Judge Richard Leon rejected the Fed’s Durbin Amendment nearly two years after its implementation. PYMNTS.com columnist Karuna Mintaka Kumar broke down the immediate aftermath in this piece, which provides insight into the entire “Swipe Fee” saga and gives some background on the debate as a whole.
With the Fed now appealing the rejection of the Swipe Fee rule, we’ll see plenty more pieces on this subject moving forward.
“Cash isn’t going to die - or not at least any time soon, in spite of the explosive growth of electronic payments, in spite of the bulls-eye that it has on its back from players who want to see it dead and buried, and in spite of the convincing narrative that electronic payments pundits deliver.”
We bring you breaking news and analysis on PYMNTS all the time, but one of our best pieces of original research surfaced this June, when Market Platform Dynamics released its new study, “Payments Innovation and the future of Cash.” Webster delivered the study's findings in a presentation at the ESTA Annual Conference in Marseilles, France on June 3.
The study examined 10 specific markets: the U.S., UK, France, Spain, Sweden, Portugal, Turkey, Poland, Germany, and Italy in order to calculate the growth or decline in cash use over the next decade. And despite what many in the industry are saying about cash, in all markets save for Sweden, cash usage is actually projected to increase in the next 10 years.
“The Clearing House will announce today that it will launch and operate an open platform that will make mobile payments more secure by changing how cardholder data is transmitted and stored. Called 'Secure Cloud,' this platform will tokenize cardholder data behind a bank’s firewall once a bank customer has registered her mobile wallet with that issuer.”
Webster helped break the news on July 1 that later this year The Clearing House will launch a new open platform - dubbed Secure Cloud - that aims to change how cardholder data is moved and accessed in a mobile transaction. In this piece, Webster gives a complete breakdown of how Secure Cloud works, the thought process behind its creation and a breakdown of how other technologies - most notably NFC - will be impacted as a result.
Is Secure Cloud poised to change the digital wallet landscape? Could it possibly serve as a fifth network down the line? Read Webster’s complete breakdown to get her take and form your own.
“So, I stand by my initial position of a couple of years back. In spite of its namesake, the goddess of fertility, I don’t see Isis producing lots of mobile wallet offspring.”
It’s been a busy summer for the mobile commerce joint venture known as Isis. On July 31, Isis announced that after a long trial and many delays, it would launch nationally at some point in 2013. Then in August, we saw Isis partner with American Express Serve and then with Chase credit card offerings, giving the mWallet two more prominent backers.
Yet before any of that happened, Webster published this piece on June 20 revisiting Isis’ history and gauging its odds of success in the industry today. This piece served as one of our biggest catalysts for debate for the summer, with many springing to Isis’ defense and others agreeing with Webster’s ultimate conclusion. Either way, it serves as a great definitive history of Isis’ platform.
“In fact, the problem with price caps is that they are like the little Dutch boy with his fingers in the dike. There are so many ways around price caps that regulators need to keep adding more regulation to prevent companies from figuring ways around them. Just wait until the Feds wise-up that digital wallet providers could start paying fees to banks for steering transactions to their cards.”
PYMNTS.com has hosted several pieces of analysis in the wake of Judge Leon’s anti-Durbin decision. But most notable is this piece by MPD Founder and economist David Evans, which breaks down how card regulation is impacting competition not just in the U.S. but in the European Union as well.
Evans notes that while Visa is “the big dog in a lot of places,” it faces more competition than leading players in many other industries do, and describes several new entities that could’ve challenged Visa, MasterCard and others. However, thanks to regulation by the European Commission and the U.S. government, such competition may be harder to come by. According to Evans, that makes a happy ending to the story tough to predict.
Do you agree with Evans’ take? Read the full piece and judge for yourself.
"The issue is that those who believed Apple would enable an NFC world don't fully appreciate how Apple normally operates. Looking at Apple's history, they tend to be more 'polishers’ than they are 'innovators’ ... Given the little penetration of NFC today, the fact that Apple is not 'polishing’ the technology is not really a surprise.”
Our stable of investors for our VC Voices series - Dan Rosen, Matt Witheiler and Matt Harris - has done a terrific job this summer giving PYMNTS.com readers their perspectives on a dynamic and complex industry. All of their pieces have fostered debate and given us an inside peek at payments investing, but no post riled up our audience quite like this submission from Witheiler on June 21.
Witheiler argues that Apple’s AirDrop feature - revealed at the iOS 7 unveiling in mid-June - should put an end to speculation that Apple will ever bite on NFC. And without Apple, NFC has relatively little reason for optimism when it comes to being used as a payments technology. Whether you agree or not - and it seems like our readers are largely split on the issue - Witheiler’s argument is certainly thought provoking.
“It may be that the business model of tomorrow in payments is related in some way to advertising or promotional revenues. But merchants didn’t really cozy up to the idea that signing on to accept Google Wallet meant that their customer data could be served up for their competitors and everyone else in the world to monetize.”
When Business Week published its story about Google Wallet in early June, many around the industry were surprised at the scope of the platform’s failure. And as Webster admits in this piece, that it had been downloaded around 10 million times and cost $300 million are certainly head-turning figures.
But that Google Wallet is flopping should not have been a surprise: at least not to anyone who read “The Incredible Shrinking Google Wallet” back in March. In her June post, Webster gives Google three options for Wallet moving forward, but isn’t overly optimistic that they’ll choose the right path.
“Wallner said that his interest in returning to payments began when he heard about NFC - a technology he terms as 'great’ and 'underutilized,’ but one he believes the industry is using “in a way that will make it very difficult to adopt.”
George Wallner is already credited with inventing magnetic stripe transmission technology, and as founder and CEO of Hypercom led a company to become one of the leading POS providers in the world.
So what’s he hoping to accomplish as he reenters payments as co-founder and CTO at Loop?
That’s what Webster asked Wallner during a podcast interview on August 12. According to the innovator, he’s building Loop to help mobile phones interact with the standard POS systems used by 90 percent of merchants today.
If you missed one of our most popular innovator interviews of the summer, catch Wallner’s full story here.
“While regulatory uncertainty would seem to dampen optimism about bitcoin's future, its dense network of users is still confident the currency will persevere. Some are so sure, they're staking their livelihood and their futures on it, building new companies and making long-term investments that are meant to capitalize on what they believe is currency's unrealized potential."
Finally, one of our most popular pieces of original reporting this summer came courtesy of our editor Pete Rizzo, who spoke to several Americans from different walks of life all betting heavily on the future of bitcoin. There are few topics as popular or divisive in payments right now as bitcoin, as the virtual currency continues to court debate around the world.
From a firefighter from Colorado, to a merchant to a comedian, Rizzo’s piece provides interesting perspective on what average Americans think about bitcoin’s boom-or-bust potential.