Entrepreneur and CNBC reporter Mr. Wonderful, aka Kevin O’Leary, says it’s only a matter of time before everyone has some form of payment on their platforms.
O’Leary’s CNBC colleague Kayla Tausche said that Square is “throwing anything against the wall to see what sticks” by tapping into physical gift cards, a chip reader and now the new collaboration with Snapchat. “They’re going a mile wide and an inch deep on a lot of products.”
According to Tausche, Square should focus on building a loyal fan base. As for Snapchat’s payment partnership with Square, Tausche says “This might be a product that actually gains traction on Snapchat but it’s just because some of the younger generation are becoming so use to having their money compromised that it’s not novel anymore.”
Kevin O’Leary asked, “Is this not a pure commodity?”. O’Leary added that he believes payments are going to be on everyone’s platform, making it very hard to make money in this space. “Payment services and transactions, the margins are going to get crushed.”
O’Leary said that the big players may be willing to go into the negative to get traction, saying “If that happens, these guys are not going to want to be in this business.” He also said that in the future, there will be offers to consumers to sign onto loyalty programs to utilize their payment platform, where they actually pay the consumer points, and accumulate asset value on the platform by continuing to use the service, “putting the business at a negative return on the processing. I hate this space.”
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