26 September 2017
Alexander Peschkoff


Alexander Peschkoff - TEDIPAY

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Innovation in Financial Services

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

Did we see it coming?

06 February 2013  |  3582 views  |  1

A year after the iPhone was launched, Nokia's CEO Olli-Pekka Kallasvuo was still bullish: “iPhone is a niche product.”

Five years later, Nokia lost its mobile crown to Apple.

What didn't Nokia know back in 2008? The concept of exponential: it takes just 49 minutes to fill a huge stadium with water, starting with a single drop and doubling water amount every minute. Most importantly, just four minutes before the apocalypse the stadium is still 93% empty...

Over 18 months ago, Visa announced its EMV roadmap that included "expanding Technology Innovation Program to the US merchants". Obviously, that didn't work - top US merchants launched their own QR-based payment network. A few days ago Visa decided to "provide some of its proprietary EMV chip technology to the industry". What industry? Which one of them - Visa or US retailers - is unaware of "exponential"?.. 

In the meantime, UK issuers are "riding the contactless wave". Well, every wave ends up going in one direction - down...

We don't hear much about the mobile operators and their payment endeavours lately - perhaps, because of the "wallet fatigue". Who pays attention these days to "mobile operator N launched Z m-wallet"? Mobile World Congress in Barcelona in four weeks' time is not likely to provide any fresh excitement in that field (most operators still think that "roaming" is a milking technique, and that they own customers and the world).

Let's use the USA as an example. US retail sales are US$4.7 trillion. At 1.5% gross, the payments industry is worth just over US$70bn. Dozens of companies within that industry are aiming to fix what ain't broken.

US advertising expenditure last year was over US$150bn. John Wanamaker, a pioneering American retailer, said in the last century: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Nothing changed much since then in the advertising industry, from the perspective of effectiveness.

The next big thing
It could be coming from where we least expect it. Did Nokia see iPhone as a threat? Does Visa pay due attention to MCX? Are issuers of contactless cards in the UK aware of "wallet collision"? Did mobile operators pay attention to Amazon's Kindle model (the first truly global consumer M2M deployment)? Do banks pay attention to Apple's patents? What did print media think of online advertising ten years ago? And last year? Do TV execs think that iPad is just a niche product? Can we recall any TV ads for Google, Facebook and Twitter during their hyper-growth stage? It's hard to see an apocalypse when the stadium is still 93% empty...

TagsMobile & onlinePayments

Comments: (1)

A Finextra member
A Finextra member | 07 February, 2013, 09:32 PayPal: V/MC took their eye off the ball and that revolution happened right in front of them - they have only recently released defensive innovation to try and counter that threat.
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I am the co-founder and CEO of TEDIPAY, the company that is bringing to the market a game-changing platform for secure mobile transactions.

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