Read in the press today about ISIS’ new SmartTap protocol. I may be getting to an age where I feel everything is on replay.. as Yogi Berra said “Its Déjà vu all over again”. How many ways are there to integrate to the POS? My simple pic below outlines 10-12. Integration is NOT a technical problem.. it is a BUSINESS VALUE PROBLEM.
We now see network resistance “Not on my rails”. Why on earth would Visa or MA want to let a Token ride on their rails? Perhaps the best example of “Rail” ownership is First Data’s refusal to support routing and processing of any Paypal/Discover BINs
Payments in the OS is perhaps best described as the intersection of the 2 major disruptive forces at work: Connectivity of Consumer and Merchant during shopping and purchase, Authentication. As I outlined in Cloud Wallet, it makes little sense to store anything in the mobile phone. If everything is connected, I should just need to authenticate my identity and payments, promotions, reminders, receipts, … everything else could happen in the background. If everything is connected, the nature of payment settlement risk changes (see credit push).
Most retailers I’ve spoken with take the view “we just won Durbin and are in the midst of steering customers to debit.. why on earth would I want to support a new product type that is more expensive AND gives banks more control? AND further enhances merchant funded rewards? Will this improve my sales”?
MAJOR news for payments and Visa particularly. New 10yr agreement allows JPM to create a sub-network to Visa… for “on us” transactions consistent with my blog yesterday
Banks don’t really want consumers to choose… not really… they will make their favored option seamless and ensure friction with everything else. This is normal business behavior, but payments are a networked business. Banks SHOULD be neutral here.. they DO NOT direct commerce but support it.