Analyst Insight by David McGoldrick - Research Associate
Techweek Chicago was held in Chicago over 23-28 June. The event centred on new technological advances that are disrupting nearly every area of commerce. Every industry – from finance and health to packaged food and tourism – is being impacted by these technological developments. The event was a chance to discuss and present on what has occurred so far and on new ideas in the pipeline.
Beacons and Mobility Create New Possibilities
Mobility was a big topic at the conference, with presenters discussing the infiltration of electronics into all aspects of life and how this will create smarter consumers, businesses and cities. Ray Velez, Global Chief Technology Officer at Razorfish, explained that growth in the number of internet-enabled devices sold will soon outpace growth in the number of children born each year. A panel on the future of location-aware marketing discussed how these internet-enabled devices (especially the combination of beacons and smart phones) could be used to enable customers to see reviews of products simply by standing in front of them. These devices could also let consumers know that items they have previously viewed online are available in the store they just entered. Others cited their potential usage in high-end boutiques and hotels, which will enable employees to recognise loyal customers and provide a personalised level of service.
Continue reading "Techweek Chicago 2014 Recap" »
Analyst Insight by Dana LaMendola - Beverages Analyst
Starbucks is the reigning poster-child for mobile payment implementation in US consumer foodservice. While its popular loyalty programme and early move into mobile payments contribute to Starbucks’s celebrity status, the company’s success is also reflective of the particular compatibility of specialist coffee shops and mobile payments. In fact, coffee shops might be the best positioned for mobile payments out of all consumer foodservice operators.
The reason that specialist coffee shops are so well positioned is that their primary offering – coffee – is an everyday and oft-repeat purchase. Indeed, in 2013 US consumers averaged over one cup of coffee per day. A large number of coffee shops purchases are made by commuters looking for their morning jolt on the way to the work. The high frequency of purchases by coffee shops patrons make these consumers prime candidates for the streamlined payment methods and loyalty benefits afforded by mobile payment technologies. Furthermore, coffee shops are most attractive to demographics that have both access to and interest in mobile technology: affluent consumers, and younger tech-savvy consumers like students.
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Analyst Insight by Kendrick Sands - Consumer Finance Analyst
Alibaba is the largest e-commerce network in the world by total retail sales. Going public has a variety of implications for the payment space and for global internet retailing. The online payment platform for the series of websites under the Alibaba banner is Alipay, which in turn is a wholly owned subsidiary of Small and Micro Financial Services Company, which is owned by Alibaba’s Chairman Jack Ma and a series of investors. This separate company, and the subsequent other companies of Small and Micro Financial Services are not included in the IPO. The separate ownership of the Small and Micro Financial Services Company was positioned as a move to appease regulators concerned of foreign ownership of a payment platform in China. Alipay is the largest third party payment platform in the world by several metrics and is poised to expand even further as it reaches beyond its domestic borders. Alipay is already accepted on other e-commerce sites not owned by the Alibaba Group. Alipay may have initially reflected PayPal’s structure, but it has quickly grown into a variety of new channels and now could provide a few lessons to PayPal on how to address more of their customers’ needs. In under a decade Alipay has become roughly twice the size of PayPal by total users, processed value and four and five times as large in terms of number of transactions and mobile processed value respectively. However, Alipay is primarily constrained by its domestic market and internet retail value is expanding at a slowing rate in China suggesting Alipay will need to move overseas to maintain growth.
Continue reading "How Alibaba is Transforming Payments and Banking in China" »
Analyst Insight by Michelle Evans - Senior Consumer Finance Analyst
Security across the payment systems has gained more attention in recent months following several data breaches at US retailers, including the high-profile breach at Target Corp. If security wasn’t already a priority for those operating in the payments space, it certainly is now as the risk of costly data breaches becomes more top of mind for many consumers.
A start-up called Rippleshot, which is part of the entrepreneur incubator in Chicago known as 1871, claims to have a solution that will reduce over 25% of fraud losses for issuers and merchants. It does so by uncovering merchant data breaches in near real time and alerting issuers and merchants as to the breach earlier in order to stop fraud from spreading further. In contrast, conventional methods of fraud detection only react once the loss reaches critical levels.
Continue reading "Rippleshot Utilizes Big Data for Fraud-Detection Product" »
On April 24th, 2014, Michelle Evans, Senior Consumer Finance Analyst, presented at Card Forum on "How Loyalty Could Spur Mobile Payments Adoption."
For those who were unable to attend the conference, Michelle is now making the summary of her presentation available for download here.
Continue reading "Mobile Payments and Loyalty" »