[E-commerce Case Study] The mobile payment marketplace: Goat Rodeo


Hi all, I’m Vi Anh and this is the presentation
for Ecommerce case study. This talk is about the insane race in the
mobile payment marketplace. It will be very informative and useful, so
don’t go anywhere. First, let’s take a look at the big picture. Overall, the online payment market in the
United States is growing at more than 12% a year. And in 2014, it’s already worth about $470
million. Then we have mobile commerce, with an impressive
growth rate of over 30% a year. Last but not least, there is a rapidly growing
segment of contactless payment, which is projected to reach up to $58 billion by 2018. With that much potential, how large the revenue
can be? Well, large enough to drive tech and retail
giants crazy. Paypal, Google, Apple, Walmart, Best Buy,
Target and Square are all jumping on the bandwagon. Sadly, there has been no major success since
customers still prefer credit card and even cash. Now we’re going to find out about some of
the biggest online payment systems. The first one is Apple Pay. It adopts Near Fields Communications, which
is a set of short range wireless technologies used to share information among devices. Apple may have some head start, since its
Itunes store has a massive collection of credit cards of up to 800 million users. What is more, it is not simply an app or feature
of the smartphone, it’s an ecosystem within an ecosystem. What does that mean by being an ecosystem
within an ecosystem? It means shaking hands with key players in
the payment ecosystem, credit giants like Visa or MasterCard, large bank credit card issuers like Citigroup or Bank America. National merchants like Staples and Walgreens are also
on the list. Now security and privacy are the central issues
of the payment system, so Apple Pay feeds a lot of attention to this matter. It charges credit card issuer bank a 0.15%
fee in return for authenticity of transactions. This is a very small charge, but at the end
of the day, it’s not where the real revenue comes from. In fact, Apple Pay contributes to the sales
of Apple products and the Itunes ecosystem. However, Apple Pay has a few drawbacks. The number one weakness is that it only works
on latest Apple device. In addition, merchants have to buy NFC enabled
point of sale terminals, and customers need to change their behavior. The last problem is merchants will lose some
of their control over point of sale payment, for example they could have been offering
coupons and loyalty points. Let’s move to another popular name in the
field: PayPal. So far PayPal is the most successful and profitable
mobile payment system and it does not use NFC. Here are 3 ways it enables payment. First they sell to merchants a device that
allows them to swipe credit card using a smartphone or tablet. The second approach, also the most commonly
used, is when customers use their mobile device browser to make a purchase or payment at a
website. And the last method is PayPal’s updated
app for iOs and Android devices. The next system I am going to discuss is Google
Wallet. Google Wallet is an online NFC based payment
system that uses an Android app, and it’s enabled by a prepaid MasterCard. Google Wallet is free to credit card companies
and merchants. Plus, it doesn’t make money by taking a
slice of transactions either. So the only source of profit is through granting
rights to display ads, coupons and daily deals. Unfortunately, it’s not a popular choice among
customers and merchants. Finally we have CurrentC, the only merchant
– owned mobile payment system. It’s a joint venture of 15 largest retailers,
including Walmart and Target. Now these guys are willing to invest billions
of dollars to compete with Google and Apple. Why? Because they want to gain control over customer
during transaction, and get the precious information of customer purchase history. CurrentC allows customers to pay at the point
of sale from credit or debit card, gift cards, or bank account using their smartphone. Therefore it gives merchants the advantage
of offering coupons, rewards and loyalty points during checkout. To wrap all things up, the mobile payment
pie is growing bigger and bigger because of huge potential. But too many players on the fields can end
up leaving customers a little bit confused. That is the end of my presentation. I hope you all enjoyed it. Thank you so much for watching all the way
to the end. Good bye!

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