So we’ve started to see the power houses fall. We first had the multiple failures of Google Wallet using NFC. Then we had the telcos club together to create Softcard (formerly ISIS) and Weve, both using NFC and both struggling. Softcard was eventually sold to Google for $100m, god knows why, and O2 have taken complete control of Weve since their O2 wallet, also using NFC, crumbled. We’ve now started the demise of the less institutional mobile payments companies with POWA (QRCode based), which is all but dead and buried, it’s now time to start thinking who’s next? and guess what they’re not start-ups.
First we start with Zapp in the UK. Zapp was launched in Autumn 2014 looking to take advantage of both QRCode based technology and NFC. They re-branded a number of times, each time doing a shoddy job. Vocalink has invested more than £33m in to Zapp with further investment from institution and private investors, taking their overall investment up to £75m and yet they’ve produced nothing! As mentioned they were originally taking on retail alongside Paypal and co, but now they’ve changed their plans to allow customers to basically pay online using a button that connects directly to their bank account and thus bypassing the card schemes. And the success? None, all this money and they’ve basically got a payment gateway that no one uses. £75m, hundreds of employees and they’ve produced something a coder in his back bedroom could do in a couple of months between masturbation sessions. Really…
Now we have CurrentC in the US. Great name by the way guys! The major retailers in America were being bent over a barrel by Apple, Google and the card schemes, so 7-Eleven, Alon Brands, Best Buy, CVS Health, Darden Restaurants, HMSHost, Hy-Vee, Lowe’s, Michaels, Publix, Sears Holdings, Shell Oil Products US, Sunoco, Target Corporation and Walmart clubbed together. The initial retailers that are part of the new company account for about $1 trillion in annual sales, because of this ‘This will be the success story’ I hear you cry, WRONG! What happens when you get so many chiefs around the table with egos the size of the universe, bugger all, that’s what! They all want things their way that no decisions ever get made and everyone leaves the room in a huff. So much so Walmart has put two fingers up to the rest and created their own version with Walmart Pay. Other reports suggest, CurrentC (trading style of MCX) are in big trouble. They’ve had tens of millions invested, they’ve struggled to get a solution that works and they’ve delayed launches more than 3 times. They’re now trialling a scaled back version in a hand full of stores, but it’s not even receiving lukewarm success.
For me the only real innovation to come out of mobile payments is LoopPay. These guys created an incredible product allowing users to use their mobile device to pay at more than 10m merchants, or 90 percent of retail locations in the US. LoopPay’s technology uses a metal coil to emit a magnetic field that can communicate to most card terminals. This basically means that holding the phone up against the part of the terminal reader where you usually swipe your card, it transmits a frequency that means the terminal thinks the cards has been swiped and the transaction goes through. Now for me…That’s innovation! In early 2015 Samsung bought LoopPay and has integrated this in to their new devices. Samsung bought LoopPay for roughly $250m and what a bargain they got themselves.
I’d love to know the nitty gritty of why these companies, who raise such big amounts, can’t tell their arses from their elbows. The frustrating thing, because of who they are, the businesses they are associated with and their friends at VC’s, Private Equity and Private Investors they are absorbing all the cash out there that real innovators and start-ups need. Just with the companies I’ve mentioned above there’s more than $700m invested and they’ve all produced absolutely nothing that’s changed the payment world. It’s about time investors, whether VC, Private Equity or Individuals pulled their heads out their arses and look at whether a business has a product rather than what a company is associated to or what someone’s done in the past at big companies. Maybe then mobile payments will see some real innovation rather than the flat joke it is today.