I bought a bagel yesterday from Brian and paid for it by credit card. He processed my payment using Square. Having built and run online stores in the US and EU, I find the simplicity of this payment solution staggering. A decade ago, I spent months dealing with banks, merchant service providers, accounting, legal, finance, developers, and designers, just to figure out how to accept money from people who wanted to buy stuff. Today, a merchant can fill out a four-field form and be processing payments in a week.
Industry disruption happens – but it often transpires over years and decades, not in days or weeks. E-commerce hasn’t killed physical retail, but a strong multichannel presence is necessary to win today. Social media haven’t supplanted the mainstream, but outlets see the benefit of an integrated presence. Trends in technology and culture have started to change the payments industry – we’re seeing evolution in NFC, peer-to-peer, and new intermediary models. As mobile devices become increasingly powerful and consumers gain comfort submitting payments in non-traditional ways (think about it: mail to phone to web to mobile), the basis for change is starting to solidify.
One of the best TechCrunch articles I’ve ever read outlined the downfall of Blockbuster Video and the rise of Netflix. Key quote: “Blockbuster probably could have done dozens of things to counter the rise of Netflix in that initial six year space. They were either simply too arrogant, too slow, too stupid, or all of the above to make a move.“
My colleague Kate Niederhoffer talks about the psychological concept of a Just Noticeable Difference (jnd). I wonder if incumbents facing current innovations in payments will dismiss Brian and Square as not meaningful or take note of a jnd within their industry landscape and do something about it. Before becoming a Blockbuster.