Tag Archives: Mobile Payments

Innovation and Alignment – Collaborating to stay ahead

I took a Human Centered Design workshop a year ago to learn more about the innovation process. My big epiphany from that workshop was that alignment is not achieved by convincing others, it’s an outcome of true collaboration…. Obvious, right? But how many people/companies really, truly, authentically do this?
Those organizations who adopt a truly collaborative culture will be able to stay ahead in the age of digital disruption because the nature of digital innovation pushes people, organizations, and industries into reinventing themselves to the core: their value propositions, their business models, and their competencies. This process of reinvention is difficult (an understatement) because, by its very nature, the outcomes are controversial.
Eight years ago, when I was heading up PayPal Mobile’s Business Development efforts for North America, mobile payments was still in its infancy. Our small team recognized that mobile payments had the power to disrupt the incumbent players in the industry. We saw, even back in 2007 (pre-iPhone), that it could be PayPal’s foray into retail, remittances, and other new areas. While we were able to put into place many of the fundamental building blocks that later led to today’s most strategic growth business for PayPal, we failed to gain senior executive alignment on our vision back in 2007. It is true that there were many unknowns in the industry back then, but I would suggest that the failure was due, in large part, to lack of collaboration with the stakeholders across the firm. We were a new business area that was isolated. We were nimble and fast-moving, but we failed to bring in other key stakeholders (outside of our team) to create a unified vision together.
Many companies have innovation labs or new business groups and could fall into the same trap. Seven years later I have worked with startups and large organizations alike, all seeking to ride the digital financial services wave or defend themselves against it. I look forward to the next interesting challenge – to work with organizations who either embrace HCD methods already, or who are struggling, or believe they will soon struggle, with issues of alignment around innovation and to help them overcome these challenges by introducing collaboration methods and helping to drive cultural change.

Where’s the Love? Let’s talk MCX / CurrentC…

I’ve been in the emerging tech space for 20+ years. So often, I have sided with the “underdog” who uses technology to try to beat the status quo incumbents in a market. I’m a believer in new technologies pushing incumbents, creating new paradigms, and better experiences for consumers in the market. (Thank you, Uber!)

So, why is it that so many of us are sensing negativity towards MCX? After all, isn’t THAT what they are doing? …Pushing the status quo of the payments market through technology?

I was sifting through the hundreds of tweets from Dekkers’ recent Money2020 and something struck me. If the tweets overall represented an unbiased account of what people were hearing, it appeared that Dekkers was presenting CurrentC as a consumer value proposition, saying the consumer would choose the winner. But if that were the case, why would there be forced exclusivity arrangements by the member retailers not to take other mobile payments options? Where’s the consumer choice there?

To be fair, Apple is taking a closed approach as well. So far, any payments issuer who wants to play on the iPhone 6 and beyond needs to be part of ApplePay (and it appears PayPal is NOT allowed in at the moment.)

…So, why does the negativity skew so heavily on MCX? Let’s assume for a moment the consumer experience were comparable (which it looks like it won’t be). Let’s assume the value proposition is as high for the consumer as it is for the retailer (which it looks like it won’t be.) And let’s assume the consumer has just as many choices to pay the way they want to pay (which it… you get the point.) Set all these aside for a moment…

Is it possible that, because Apple has one of the strongest consumer brands in the world on the very device we need for the service, MCX got very unlucky by choosing the wrong enemy?

Think about it… Would anyone care as much if it were a war between the big box retailers and our not-so-beloved mobile operator brands? I doubt it. In fact, consumers might sit back, throw back some popcorn, and enjoy the fight…

But something seems different here. Apple users are outraged (and will continue to be outraged) that their favorite brand is being scoffed by the retailers.

Let’s assume MCX can fix CurrentC’s potential consumer experience issues (why is this a war of handshake technologies, anyway?!) …But to strong-arm a consumer’s favorite and beloved Apple brand? Well, some day, in the not-so-distant future, MCX retailers may look like the bad guys that don’t take ApplePay. And that’s when defections will happen… And THAT could be MCX’s downfall.

Will MCX’s CurrentC gain the consumer adoption necessary to win?

If a mobile payment service requires any effort on the consumer side and does not support mainstream behavior, it will fail.

For adoption of mobile payments, 3 principles need to be in place:

1. Has a clear value proposition addressing a specific pain point at launch for either the payer or payee

(OK, check for Retailers)

2. Displaces a far inferior payment alternative which can not fight back (e.g. cash or check)

(Questionable as it’s unlikely ACH /bank payments trumps existing credit consumers would have)

3. Has no significant barriers to entry such as regulatory barriers, prohibitive infrastructure cost, or complex partnership requirements.

(Problem: a clunky consumer experience coupled with requirement to sign up bank account could cause too much hurdle for consumer adoption.  Why clunky? Because consumers are used to having a bar code scanned rather than having to first scan a bar code, then have the bar code scanned… Also, consumers will likely be hesitant to sign up their bank accounts… and finally, who would want their health history data to be shared with retailers?!)

I hope for MCX’s sake that this TechCrunch article is not correct.
http://techcrunch.com/2014/10/25/currentc/
Else, we could see a big problem for consumer adoption of CurrentC.

Looking forward to hearing Dekker’s presentation at Money2020 and the resulting discussion.

Why ApplePay is the Uber of PayPal’s Taxi Service

It has been too long since I’ve blogged, but with the recent announcements around ApplePay and as the former head of PayPal Mobile Business Development for North America, I feel compelled to do so. More to come later as more news is synthesized in my brain…

First, let me start by saying, I may quite possibly be the last person who had a Nokia phone in the U.S.  My loyalty as an Apple user is relatively recent.  Some time in the last 6 years, I begrudgingly bought an iPhone, because I had to do so to understand mobile payments. Like everyone else, I can’t imagine my life pre-iPhone anymore.

It has been an exciting week in mobile payments between MCX’s announcement last week with their merchant-focused mobile payments/loyalty service riding on prepaid card and debit rails and, of course, Apple’s new Apple Pay service announced on Sept. 9. Conspicuously absent from all this news is PayPal.

PayPal is in big trouble.

How, you say, can PayPal, the 100 lb gorilla in ecommerce payments and mobile payments be in trouble? After all, it has over 150+ million active accounts worldwide (every time you sneeze, there are 25+ more million accounts added) and processed $25 billion in mobile payments volume in 2013, by far, the leader in mCommerce in the US/globally (except for China). Doesn’t size in payments matter? Besides, they have cross-platform (iOS, Android), online/and mobile payments mark. How could they get unseated?

Some thoughts to consider:

1. Apple Pay, integrated into the iOS, calls into question PayPal’s value proposition that used to set it apart from others. PayPal grew its business through arbitrage. PayPal met a very important need in 1999-2000 and beyond. Specifically, they provided security, trust, and convenience in online payments between parties that didn’t know/trust one another. They did this through arbitrage… riding the rails of ACH to bring “real-time” payments and acting as the trusted middleman between people (P2P auctions) and, eventually, consumers and merchants. Later, their value prop included convenience since you didn’t have to input your card details (which resonated particularly in the mobile UI in the beginning of mobile commerce times.)
Apple now has a more convenient, more secure service which works seamlessly within the iOS itself. They have 800+ million iTunes accounts which are auto-enrolled with the phone upgrade. Any in-app experience, I believe, is going to work better, faster, more secure than any other’s within the iPhone experience. Unless Apple mucks this up terribly (they rarely do, except Apple Maps), ApplePay flow will likely trump PayPal’s in a heartbeat. And if you maintain that PayPal has a significant online presence, you’re correct. However, PayPal’s growth market is mobile (and mobile retail.) Apple has outflanked PayPal in their largest growing market. Over time, as PayPal becomes less relevant in mobile, it will also become less relevant in its current core business, online. Remember: share of mind and share of wallet matter in payments.

2. Apple drives mobile consumer behavior, not PayPal. Back when I was at PayPal in 2007 & 2008, the mobile business was just a toddler who was learning its legs, we had grandiose ideas around retail/NFC and how we would grow our business in this space. This was pre-iPhone. We, that first team making foray into mobile payments, learned a lot along the way. One big takeaway was that PayPal couldn’t drive new consumer behavior on the mobile phone. Although text-to-buy and text-to-give were innovative services, few consumers used them. People barely used text messaging at the time, let alone learning a new payment method on this type of interface. Just because the technology worked, didn’t mean you could shove it successfully into the market. Sadly, this lesson went out the door as employee turnover continued in the mobile business which led to the same mistakes, including launching mobile number password/PIN at the retailer… a behavior few would adopt since it flew in the face of every other learned consumer behavior (bar codes, tapping phone, etc.) that others were building.  The rest of the ecosystem (and consumer behavior) had to evolve… And it wasn’t until iPhone Apps that PayPal Mobile adoption rates began to grow. Apple set the consumer behavior, and everyone else had to then run their service on top of that behavior. If I were Apple, I’d make sure my consumer experience on ApplePay far surpassed anything else anyone could do on my device.

3. Apple is the ONLY company that can achieve merchant adoption through consumer demand. Wait, what?! I have maintained for the past 9 years that mobile payments in the US is solving a consumer need that doesn’t exist. In fact, mobile payments/offers/loyalty really meet the merchant’s needs… to use it as leverage to drive down transaction fees and develop a stronger 1:1 relationship with the consumer (to drive sales.) So, Apple, being consumer-focused… how could they drive consumer adoption where the need doesn’t exist and how could they possibly drive merchant adoption?

One thing that Apple has proven is that they break all the rules we believe about consumer demand/technology/services. For that reason, I believe they will drive consumers to demand mobile payments and actually drive merchants to adopt because of that consumer demand. Apple Pay will be a “must have” in the future. Apple solves the chicken and egg dilemma through consumer-centric approach in a way no other company can. While many say that Apple is not meeting merchant needs and won’t be able to achieve success accordingly, I say, are Visa and MC more merchant-centric with their fees? Those who drive sales win the hearts and minds of merchants. Pure and simple. (Which is why mobile content providers paid 50% to MNOs for so long…)

PayPal’s approach has been to undercut MC and Visa fees to drive merchant adoption. My guess on Apple’s approach… prove that merchants will lose sales. Guess which one merchants care about more?

4. Apple has befriended the Banks (for the most part) while PayPal has alienated them. Ecosystem matters. PayPal is now “going it alone” with no friends with the big banks and associations, no friends with the MNOs (which are irrelevant now anyway), and no mobile OS control. In a world where ubiquity matters, having partners/friends that are ubiquitous in open loop helps. Because Apple doesn’t process the payment but just passes on the payload, they don’t have to grow a new business around risk analysis, customer service, etc. while also befriending everyone already in the payments value chain (even though they charge issuers $ bps on every transaction, something no one else has been able to get away with.)

Bold statements on PayPal’s strategic options

1. The enemy of my enemy is my friend: Google, meet PayPal. PayPal, meet Google. Shake and make up. Time to speed date.

2. Should eBay spin out PayPal: Really? Is this even a question anymore? While execs were busy debating if/when PayPal should be spun out, Apple has been planting the seeds for 3 years to eat your lunch. Time to move fast before your most important asset loses significant value in the next 5 years.

More thoughts to come later…

PayPal and Discover – A game changer?

Today’s announcement that PayPal has partnered with Discover Card, another closed loop payment company – but in retail, could mark a game changing scenario in the land grab for alternative payments in retail. While Discover certainly doesn’t have the reach of Visa and Mastercard, it does provide a significant boost to PayPal’s merchant acquiring network. This is a smart move for both companies since Discover is the network that lags behind the others in terms of acceptance and issuance, and PayPal knew that it couldn’t win the game by organically acquiring its merchants.
Still, as an ex-PayPal Mobile exec and as someone who has used the PayPal payment at Home Depot, I believe the user experience is flawed. Having the consumer type in their mobile number and PIN is an experience that derives from a technology solution that stands without the need for partnerships and significant POS upgrades rather than the right consumer experience. The problem with the mobile number and PIN method is that it goes against the grain of the user behavior everyone else in the industry is promoting (card swipe, bar code off the phone, and NFC). This leaves PayPal alone in building that behavior which is very heavy lifting, and one that would require a SIGNIFICANT value proposition to the convince consumers to try – a value proposition well beyond what is provided by PayPal today. Can PayPal pull this off? PayPal has never been known to really understand their consumer base. They never had to as they could ride on the coat tails of eBay to get their first 50+ million users. Or will PayPal finally shift into the technology handshakes that are promoted by the industry? Starbucks and the airlines finally got us all used to the barcode on the phone. Will PayPal finally adopt this handshake? Or do they believe that the laser required to read the bar code is too much of a hurdle for its now Discover merchants to buy into (let alone NFC POS readers)?
While the Discover deal is a huge boost on the merchant side, it’s now time to focus on the consumer. Let’s see whether PayPal makes a drastic change to the consumer experience as well. An Apple deal would be the perfect marriage, but perhaps too uncharacteristic for Apple…

Mobile Financial Services: Uganda and back

Recently, I had the opportunity and the pleasure to work with a large NGO seeking to launch mobile financial services for poor, unbanked small holder farmers. This NGO has a big mission: to create sustainable development in post-conflict areas. In Uganda, I worked out of the Kampala office, but focused the mobile financial services work on the Northern and Western Acholi and Karamoja regions. Incidentally, for those of you familiar with the Kony’s LRA child army devastation, much of this conflict occurred in the Acholi region of Uganda.

As I worked with this NGO’s amazing team to develop their Go-to-Market strategy, I felt so fortunate to have the opportunity to meet such incredible, smart, and interesting people and to hopefully have a positive impact in their overall mission. I was also reminded how far I was from home as I saw these 4×4 trucks parked at the client’s offices.

There is nothing quite like a sign for AK47’s on four-by-four trucks to remind someone she is far away from home, where my previous work residence a few years ago was the lovely PayPal building in San Jose.

While all of my work involves mobile payments or mobile financial services, the work itself is vastly different as I work with clients like the one in Uganda seeking to build sustainable development and increase the incomes of the poor versus the large banks or technology companies in the U.S. I often think of my business as completely bifurcated, and yet, I have to believe there is a common thread in what I do.

This question has been my inspiration for my next mobile payments event in San Francisco to explore what the connections are between seemingly disparate initiatives around the world and what is occurring here in the U.S. As I prepare for this event, I will be researching the commonalities of various initiatives worldwide. At our panel discussion, we will seek the advice of experts from around the world to get their views on linkages. Come join us as we begin to uncover what links mobile payments initiatives from Post-Kony conflict Uganda to Silicon Valley on July 23 at The Commonwealth Club in San Francisco.  For more information on the upcoming event, you can find it here.

Making an Impact: One Mobile Payment, One Human Connection at a time

The Story of Jean D
My story begins 14 years ago after a 6-week overland truck tour in Sub-Saharan Africa. I had caught the adventure travel bug which subsequently brought me back to Africa many times since. On my bucket list was a trip to Rwanda to see the gorillas. It was a dream I had for quite some time. So, when I had the chance opportunity to do a one week project in Uganda for mobile money, I jumped at the opportunity to take it and then to tack on a short trip to see the gorillas in Rwanda.
When planning a trip to Rwanda, the question, “Will you visit the genocide memorial?” invariably arises. I had heard it was a profoundly moving and disturbing memorial to see. I had decided that I did not want that to be my final memory of Rwanda, so I opted out. I wanted to remember the happy moments of seeing the gorillas.
I’m writing this on my way back to Kigali for my 48 hours of travel back home. The gorillas were amazing. It was a dream that I feel fortunate to have done. It was expensive… very expensive, but well worth the money. The trekking ended up being a bit more difficult than I had expected. The mountains where the gorillas are located are a chain of 7 volcanoes called the Virungas. The tallest is 4,500 meters. Others are around 3,000 meters. The mountains, or volcanoes, are thick with bamboo vegetation which becomes alpine forest as you gain altitude. The ascent can be quite demanding at times, depending on which gorilla family you visit. The closest town is in Kinigi, about 18km from the Volcanoes/mountains.
Interestingly, as I look back on my past four days in Rwanda, I suspect the gorillas aren’t the only memory I will take home with me… which brings me to today…
This morning, I went into the lovely breakfast area to have my last breakfast at the upscale lodge near the gorilla mountains, I was greeted by the friendly 20-something Rwandan staff with big smiles and perfect white teeth. Today, Jean D was at the breakfast area helping the guests. Actually, he was just helping me as the other two guests from the lodge were on their trek tour. We had friendly chat, and I asked where he was from. He told me the town nearby. As we chatted some more, I heard him say,” After the genocide…,” in a hushed tone.
When I landed in Rwanda 4 days ago, I saw billboards all along the road in Kingali that were memorializing the 18th anniversary of the genocide that lasted from April 7 for three months during which time 1 million Rwandans were killed out of a population of 8 million. There is no one in the country above the age of 17 who was not affected by this genocide. What was I doing during that time? I was one year out of college and working in Northern Virginia. I was probably working, partying, and definitely oblivious to the atrocities that were happening half way across the world.
While I conceptually knew and had read about the genocide in preparation for the trip, I guess I hadn’t really realized that EVERYONE, including this gentleman in front of me, was affected by it. I wasn’t sure whether to broach the subject with the Rwandans I was meeting, but I thought that since he brought it up, I would ask him about it.
“Do Rwandans speak to their children about the genocide?” I asked.
He was not fluent in English. French was the major language in Rwandauntil2007 when it was decided to switch everyone to English for ease of trade and business with neighboring English-speaking countries. He misunderstood me. He said softly, “Many, many children died.”
I decided to switch the subject, “Do you live nearby?”
“Yes, in a town near the lodge.”
“Ah, is your family there?”
He got quiet and shook his head. “No, they were all killed in the genocide.”
My light chit-chat took on a sudden weightiness I had not prepared for.
“How old are you?”
He said, “I am 28.”
“So, you were only 10 when it all happened?”
“Yes. My brother was 4. He is the only other one who survived. My mother, my father, and my sister died. My brother and I fled into the mountains.”
“You fled into the mountains? How long did you stay there?”

All of a sudden, I thought about the mountains which had nothing. No shelter, no food. No humans. I also remembered that the guidebook had said that the genocide and killings threatened the gorillas in the mountains and that they escaped into the Congo at that time. I didn’t quite understand how that was since there were no humans living in the mountains. Now I realized, people were fleeing for their lives in the forest. What kind of terror would children of the ages of 4 and 10 witness to be orphaned and fleeing in a forest, on the run from killers for two months, alone?

“We lived there for 2 months. We would climb down the mountain to find food in the farms and steal avocados… whatever we could find.”
When he returned, his family was gone. He heard later about how they were killed. I will spare you those details.
I couldn’t help myself. I suddenly began to cry. What a life this man has had. And he was only 1 of 8 million people with a story. He gave me a tissue. All I could say was, “I’m so sorry. This is so sad.”
He mentioned earlier that he wanted to go to university someday and is trying to save money working at the lodge to afford the yearly tuition. He told me this as chit chat, not because he was looking for money. I was embarrassed by the opulence in which I found myself there, now recognizing what his life had been. I thought about the fact that my four days stay at the lodge would have paid for his entire college education.
Suddenly, my head was spinning. Could I find money to send to him? Western Union? PayPal? For God’s sake, I’m in the mobile money industry, I should be able to send him money easily! Then I thought about whether the money would be used properly for college. Could I send the money directly to a University? Should I start a scholarship fund? What about the other people working at the lodge? What about everyone else in Rwanda?! I would start small. Help Jean D get a college education.
So, now here I am, putting on my entrepreneurial hat. I will figure this one out. Jean D deserves a college education after the life he has been through. And so do the others. I will start out small and see how things go from there. If any of you have ideas or would like to help, I’m all ears.
Stay tuned…

May 17, 2012
After I had heard his story, I requested his email and gave him mine. I did not tell him why, but at that moment, I knew that I was going to help him in some way. As if by fate, I had received an email from Jean during my journey home to let me know that the email he had provided to me had a few letters missing and to give me the proper email address. Had he not sent me that email, none of the rest of this would have been able to transpire…
When I returned home, I began thinking through how to remit the money safely to his University. I remembered that one of the companies I advise Willstream had set up a program exactly for this type of remittance to Senegal, the home country of the CEO. I reached out to him to see if he could do this for me in Rwanda. He set to work. Within a week, he had called the University and had verified the credentials. He called Jean and verified that he had the high school diploma and ID necessary to enroll. He set up the University as a merchant and confirmed the exact amount needed for registration, 4-year education, and living expenses. He contracted with a local bank to move the funds. We are now finalizing everything and will begin to send the money soon.
When I think about the connections that occurred to make something like this happen, I am amazed. The powerful combination of human connection, the Internet, and mobile has reduced all distances and obstacles to make things happen.

Once we successfully complete this remittance, I am also seeking to expand this into a larger scholarship program for orphaned genocide survivors of Rwanda and will be speaking to a few non-profit organizations to see who can assist with choosing recipients of such a scholarship fund. More to come…

June 25, 2012

Today I received confirmation from CEO of www.willstream.com, the company that I used to remit the payments to the university, that Jean D. is officially now enrolled this semester into college!  Thank you to Toffene, CEO of Willstream for his dedication in making this a reality!!!

Where there’s a Will(stream), there’s a way!!!!