Welcome to our new Payments Insights newsletter, a morning email with the top news and analysis on the digital payments industry, produced by BI Intelligence.
AN E-COMMERCE TIDAL WAVE IN THE U.S.: Business Insider’s Joe Weisenthal points out that the rash of late deliveries this holiday season are very suggestive of an e-commerce surge that even heavyweights like Kohl’s and Amazon weren’t ready for: “Although weather, Web glitches and … manufacturers played a part in late deliveries, the sheer unanticipated volume of holiday buying this year may have been the biggest problem, retail analysts said. Meanwhile, there have been several stories about physical retail having a rough season, with stores being forced to offer massive discounts to get folks in the door.
So it seems the big e-commerce boom is … clobbering physical shopping at a level that nobody anticipated.” (Business Insider)
The bottom line is that major players in the U.S. consumer economy — like retailers and UPS — just haven’t kept pace with shoppers’ shift to online. For the payments industry, it’s a flashing warning signal that online, mobile payments, and transactional infrastructure better be up to snuff, or payments glitches will cause embarrassments of their own.
AMAZON’S E-COMMERCE STATS AND FUN FACTS: In a press release published today, Amazon included a very, very long grab-bag of bullet-pointed statistics to give people an idea of the sheer scale of mobile commerce and e-commerce shopping this year:
- More than half of Amazon customers shopped using a mobile device this holiday.
- Prime was so popular this holiday, that Amazon limited new Prime membership signups during peak periods to ensure service to current members was not impacted by the surge in new membership.
- Between Thanksgiving and Cyber Monday, Amazon customers ordered more than five toys per second from a mobile device.
- Amazon also included a bunch of fun facts about sales of specific items that proved popular, like this one about Griddlers: Customers purchased enough Cuisinart Griddlers to place one in every McDonald’s restaurant in the world.
QUOTE OF THE DAY – “Square overlaps a bit with the smaller guys. But as a soon as those stores start to make more money and want to know where their business stands, we believe they’ll want the functionality we provide. Square doesn’t match up. It’s like comparing apples and oranges,” Revel Systems Founder Lisa Falzone, in a great Street Fight Q&A.
In other news …
SOCIAL & MESSAGING APPS AS TRANSACTION PLATFORMS: The latest social app to launch a payments/commerce feature is Japan-based LINE, which has some 300 million registered users globally. It has launched LINE Mall, an eBay-style peer-to-peer e-commerce service. Here’s some analysis from Mobile World Live: “LINE Mall is similar in intention to eBay, with no charge for listing but a commission of 10 per cent charged on final purchase prices. Users also receive points after transactions that can be used for future discounts. LINE Mall sellers and buyers can either identify themselves using their existing LINE accounts, or sign-up for a separate account.” (Mobile World Live)
SOCIAL PAYMENTS?: It’s not just LINE. Other social and messaging services also want to be at the center of consumer transactions. Facebook has a service called “Autofill,” which is similar to “Pay With Amazon,” a feature that allows Amazon customers to autofill their credit card and payment information on e-commerce sites. Third-party developers are also developing tools that bridge the gap between social media and commerce. For example, Brazilian-based startup, called Arco, has enabled purchasing on Instagram. Camera manufacturer Leica partnered with Arco to allow its Instagram followers to purchase its products by simply commenting “Purchase” on an Instagram photo. (Digiday)
WELCOME TO PAYMENTS INSIGHTS.This is our new newsletter covering all things payments. Don’t forget to sign up and get it every morning in your inbox. Please email [email protected] or BI Intelligence director [email protected]
TARGET’S DATA BREACH GOT THE HEADLINES BUT THE HACK OF ADOBE WAS THE MOST WORRISOME SECURITY INCIDENT OF 2013. So argues American Banker, in a paywalled article. Adam Levin, of Credit.com, explained back in November in an article on the Huffington Post why the Adobe incident was particularly scary. (American Banker’s Payments Source, Huffington Post).
Meanwhile, Target is denying that four-digit Personal Identification Numbers were also stolen in the data breach. (CBS New York)
American Banker provides a useful analysis of how different banks reacted to the data breach. (American Banker)
Dread Pirate Roberts says bitcoin booty is his: Ross Ulbricht, who is accused of running the underground Internet site Silk Road — used by drug dealers and cyber criminals — is trying to argue in court that the U.S. government has no right to seize some $US34 million in bitcoin as part of a money laundering case. Ulbricht, who allegedly used the Internet handle Dread Pirate Roberts, says bitcoin is not an asset covered by federal forfeiture law. Legal experts disagree with his argument: Attorney Jeffrey Alberts, who used to specialize in asset-forfeiture actions as a federal prosecutor … said Ulbricht should have ‘a difficult time’ proving his argument because typically ‘anything of value’ can be seized in money-laundering cases.” (New York Post)
BEACONS AND PAYMENTS: PYMNTS has their take on how beacon devices will impact the payments market. (PYMNTS)
**At Business Insider Intelligence, we’ve recently published our own in-depth report on beacons and their impact on retail and payments.**
As we reported a few days ago, U.S. Bank is touting a new app that uses image and audio recognition to allow people to buy stuff on their mobile device after seeing it or hearing it advertised on digital, print, radio, or TV. Here’s a YouTube video that shows how the technology works.
PAYPAL SIGNS DEAL TO HELP CHINESE EXPORTERS: PayPal China has signed a deal with Beijing Post, one of China’s largest postal providers. The deal means that companies sending merchandise abroad from China will find it easier to connect with customers around the world. (PayPal)
GROUPON NEWS: In case you missed it: As of Dec. 20, consumers in Argentina, Denmark, Finland, Greece, India, Israel, Norway, Poland, Portugal, Romania, Turkey and the United Arab Emirates can use the company’s mobile app on their iPads. It’s part of the company’s plan to expand internationally and be a go-to commerce portal for its users. (Chicago Business Journal)