Starbucks knows or should know quite a bit of information about me. What would the data reveal – I drink medium roast Vente drip coffee, in the afternoon, I travel frequently, that I almost buy a sweet of one kind or another. Boring I know, but important to them. How do they know? The Starbucks payment ap which I’ve used almost since the clumsy first day they offered it. Visa knows I reload a Starbucks card roughly once a month. Starbucks has the fine grain data – all in trade for one free drink for every 10 and a special offer now and then, and convenience. They do $1.5B per year on their closed loop system – arguably the largest most successful virtual payment application ever.
Today – my IPhone cheerfully let me know that I could start to use the new Apple payment ap inside Passbook. In 2 minutes (post installing the iOS8.1 update), my credit card on file magically appeared in a virtual image of itself in Passbook waiting for service – store purchases, in ap purchases. Touch it to a NFC reader at Target (well maybe not Target), a temporary number is generated lowering risk and off I go. Apple made it simple, almost elegant. So Apple has now interjected itself more fully into my life. In all the fine print, they can track what I buy and where (although they say they don’t) – and then pass along the relevant payment completion data through the settlement process – but they’ve got the golden data goose of my digital contrails. They know who am I, what I buy, where and when.
Twitter has launched a pilot Tweet-pay initiative with a European bank. I haven’t seen it, but word is – you can Tweet a payment to anyone once you’ve set this up. I presume they did this in a bit of an out of site way to test the concepts and work out the kinks in case things go awry. Early returns say it posts payments as a Tweet – that seems like a terrible idea.
I believe, but don’t know, that Facebook has its sites on a payment play through their messaging platform(s). I like that idea the best.
AT&T has been futilely trying to make a go of Isis (now a terrible name choice over a terrible product offering). Google has made equally marginal progress. Paypal has split from Ebay to find itself and become more broadly relevant.
Who wins and why? The provider(s) that offer(s) high, consistent trust and ease of use – and an incentive or value add to change behavior. Will consumers change behavior? I believe it’s too early to know – and will take several years to unfold and remake the dominant plastic payments landscape.
My near-term prediction – Starbucks will continue to run a largely successful payment program built to suit their own purpose – and serving as a model for niche signle entity payment systems with unique customer insight. The others will fragment along specialized lines. Facebook may get small merchants and person-to-person with their Face-pay. Apple knows how to make simple experiences elegant and cool – they might get there with payments – but adoption will be slow. Twitter will be marginalized much like Google and AT&T.
In the meantime, be mindful of who you let interject into your payment life – if you care at all about data privacy and the value of your personal predictive spending patterns and information. And think about who are you going to call when you use Twitter to pay Staples with your Visa card backed by Bank of America.