Groupon has launched a new mobile payments service, after trialing the service with 150 businesses in San Francisco. The service allows merchants to accept credit and debit cards by swiping them through a card reader attached to an iPhone or iPod touch.
For some observers, the activity in the mobile payments business will bring to mind the changes in the voice business wrought by over the top VoIP.
In a general sense, an attacker in an established market will always find the logic of the “same product, lower price” value proposition quite compelling. It answers the question of why a customer should buy the product (the transaction processing service). It answers the question of “what is the customer value proposition?”
Groupon Payments clearly is seeking to grow by offering cost savings. That’s the same approach taken by most VoIP providers, including both facilities-based cable operators and over the top suppliers as well.
Of course, you know where that story leads. Over time, we should expect to see pricing pressures in the payments processing business become more pronounced.
In other words, the amount of revenue transaction processors can make should fall, over time, as has been seen in the voice calling business, for example.
Groupon’s move is the latest bit of evidence that mobile payments are going to transform the retail payment process overall, in the same way that over the top VoIP has transformed voice communications globally.
To be specific, the profit margin is going to be wrung out of the business.
Sunday, September 23, 2012
Transaction Fee Part of Mobile Payments Looks Like Replay of VoIP Business
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Subscribe to:
Post Comments (Atom)
Consumer Feedback on Smartphone AI Isn't That Helpful
It is a truism that consumers cannot envision what they never have seen, so perhaps it is not too surprising that artificial intelligence sm...
-
We have all repeatedly seen comparisons of equity value of hyperscale app providers compared to the value of connectivity providers, which s...
-
It really is surprising how often a Pareto distribution--the “80/20 rule--appears in business life, or in life, generally. Basically, the...
-
Is there a relationship between screen size and data consumption? One might think the answer clearly is “yes,” based on the difference bet...
No comments:
Post a Comment