Amex LinkedIn Campaign

Every company is now using Facebook and Twitter for marketing.  Still, although they opened their APIs in 2009, few companies have successfully launched a campaign on LinkedIn. 

Amex is now trying to buck this trend with their 'For Everything You Do' campaign, with which people are able to nominate and vote for their favourite administrative staff.  The admin with the most votes at the end of the campaign will receive $2500 and 100 randomly selected nominees will receive $25. 

Amex is clearly using LinkedIn to connect with their more affluent and professional customer base.  However, the campaign is interesting in that it demonstrates the potential of LinkedIn for more subtle, less intrusive marketing campaigns.

Amex Exec on Digital Payments and Key Criteria for Success

A couple of days after Amex launched Serve, David Messenger, head of the online and mobile business unit at Amex today spoke at the Web2.0 Expo about the emergence of digital payments and what Amex views as the key criteria to excel.  Below is a summary of his talk along with a link to his talk.

Driver for digital payments:

• Mobile penetration
• Internet speed
• Social networking and commerce
• New POS technologies, such as NFC

Lessons from other industries: changes come faster than expected and many incumbent don't survive.

Promise to merchants: whole new approach to marketing and promotions.  Can we enable the insights from rich data captured to drive intelligent and personalised promotions.

Developing countries may be at the forefront:

• Limited existing infrastructure to replace
• Governments push for phasing out of money

Criteria for success in shaping digital payments going forward:

• Scale: essential to keep costs low and get the data required to develop interesting analytics
• Platforms must bridge distinction between online and offline
• Need to be open (agnostic to payment method, technologies and form factors)
• Partnerships to drive scale in complex ecosystem
• Security: particularly as organisations will manage increasing amounts of sensitive data
• Real-world servicing: managing money and sensitive data, providers must be able to provide service to customers

Range of players that will compete:

• Data players (Google, Facebook,etc), that are primarily entering for access to data
• Banks and incumbent payments companies
• Startups that are offering a new approach

http://www.youtube.com/watch?v=CsMsKBfWcSg&feature=relmfu

American Express launches Serve, its PayPal competitor

On Monday, American Express announced Serve, a digital payments platform and electronic wallet that will enable users to pay online and offline merchants with a broad range of payments options, including Visa and MasterCard credit and debit cards.

Serve will be accepted at all online and offline merchants that currently accept American Express, in addition to enabling users to perform Person-2-Person transfers.  For offline transactions, users will initially be issued a prepaid Serve card that is directly linked to its electronic wallet.  As these cards are considered prepaid, merchants will be charged the lower transaction fee associated with prepaid cards.

Although Serve will undoubtedly introduce an NFC solution shortly, Amex appear to go out of their way to remain technology agnostic and not associate itself too closely with any particular technology.

Partnerships will be core to Serve's long-term vision, focusing on verticals such as social networks, online commerce, gaming and entertainment.  At launch, partners include Ticketmaster, Concur and Flipswap.  Although Amex is likely to quickly grow this network, the initial list does not appear particularly inspiring. 

It is beyond doubt, that Serve is a very core part of Amex long term strategy.  And, Amex certainly have considerable assets to bring to the table; merchant network, world class servicing customer organization, robust payments infrastructure and a highly respected brand. 

However, at present it is difficult to assess its likelihood of success.  Although Amex intend to launch new functionality on an ongoing basis, Serve currently does not appear to bring anything new to the industry. 

Moreover, it will be interesting to see if Amex, a company that has traditionally had its strengths in marketing and customer service, is able to compete in an increasingly technical and innovative industry.  This might require a far greater cultural shift.

The Foursquare + Amex Link-Up Explained

Foursquare has linked up with Amex for a pilot at SXSW, the technology conference in Austin, Texas.  By providing their Amex card details, Foursquare users are able to collect specials and trigger donations with purchases at select Austin merchants.

The specials: participating merchants give a $5 credit to Foursquare users who check in at their store and make a purchase of more than $5.

The donations: the first time signed up users swipe their card at any Austin merchant during SXSW, Amex will donate $1 to Grounded in Music, a music-based non-profit.

I truly believe that this is a peak into the future of location-based deals and the path to profitability for Foursquare and its competitors.  However, once mobile payments becomes more mainstream, I'm uncertain if they will need Amex.  I would essentially expect Foursquare to build its own mobile wallet or PayPal integration that users can register to with the card of their choice.

This approach would open the Foursquare solution up to any user, regardless of whether they have an Amex card or not.  Moreover, it would enable Foursquare to leverage its customer relationship to get a foothold in the payments value chain and a piece of the associated revenues.

http://www.businessinsider.com/foursquare-amex-deal-2011-3#the-first-step-is-to-go-to-amexs-sxsw-site-and-sign-up-your-credit-card-1

Interesting Interview about Mobile Payment with Dan Schulman at Amex

In this interview with Dan Schulman, President of Enterprise Growth, the emerging payments group at Amex.  He talks about the importance of smartphones and how they are set to transform payments and commerce. 

Particularly he is concerned with how smartphones will blur the lines between online and offline experiences and create an entirely new commercial ecosystem. 

In this new, commercial ecosystem, payments will not simply be a separate part of the purchasing process, but an integrated part of the shopping experience.  This experience will include marketing messages and offers, product information, loyalty & reward programs, payment and more.


http://www.pymnts.com/exclusive-interview-dan-schulman-of-american-express-talks-payments-innovation-and-regulation/?t

Visa Acquires PlaySpan and Takes a Bite of the Digital Goods Market

Visa yesterday announced its acquisition of Silicon Valley based PlaySpan, a payment processor in the digital goods space.  Visa will pay $190 million cash, plus an additional performance based element.

So what are digital good; these are products or services that are purchased, delivered and consumed in its digital form.  Most common examples are software, music files, online movies and e-books.

Although these categories are experiencing rapid growth, the most exciting category are purchases made on social networks or within online games.  This has become an incredibly attractive space where PayPal has taken an early lead.

PayPal launched micropayment solution last year, with a number of high-profile partners onboard, such as Facebook, the FT, Autosport and Justin.tv.  What sets PayPal’s solution apart is its frictionless, two-click convenience and open APIs that enable merchants to customize the solution to their needs and easily integrate with their systems.

Importantly, micropayments also require a different pricing structure, as the traditional structure is not economical for smaller payments.  PayPal has therefore introduces a different structure that reduces the fees from a $1.00 transaction from $0.33 to $0.10.

And it is exactly this that PlaySpan provides to Visa.  Like PayPal, PlaySpan has developed a frictionless e-wallet that enables consumers to complete transactions across social networks and online games without interrupting their online experience.  It also operates with open APIs, so that merchants can easily integrate the PlaySpan with their application. 

Within four years to launch, PlaySpan is already the number two company in this space, with 28 million users, only after PayPal with its 80 million users.

As TV producers, online game developers and mobile operators increasingly seek to monetize their content through digital goods and micropayments, PlaySpan’s market potential is rapidly expanding.  This acquisition could consequently provide Visa access to entire new markets.  Let’s see how other networks such as MasterCard, American Express and Discover respond!

Cardlytics: Merchant Funded Rewards for Debit and Prepaid

Red Herring, the business and innovation magazine, yesterday named Cardlytics among its 2010 Global Awards Winners.  Previous winners include Google, Skype, Netscape, Salesforce.com, YouTube and eBay.

Cardlytics is a deals intermediary that connects retailers and potential customers through their online bank.  Cardlytics leverages its proprietary technology to target offers according to customers’ actual card transaction data, enabling a more targeted marketing approach – a “market-of-one” approach, as Cardlytics refers to it.  The retailer is charged only when a customer actually acts on an offer and purchases the goods.

Cardlytics partners with banks and integrates its technology with the online banking platform. Cardlytics analyses customers’ transaction history and displays offers on their bank statements.  For interesting offers, customers simply click a button on the statement to activate the offer.  Once they complete the transaction, the discount is automatically transferred to their account, rather than the customer having to worry about coupons or promotion codes.  According to Cardlytics their campaigns consistently generate activation and conversion rates that are 20 – 50 times higher than other marketing channels.

So far, Cardlytics has implemented its programme with more than 100 banks, through which it reaches more than 30 million customers with offers from more than 100 merchants.  Unlike, other deal intermediaries, such as Groupon and Living Social, Cardlytics’ merchant partners are primarily national retailers, rather than local service providers.

However, the transformational aspect of Cardlytics is its impact on banks’ debit card programs.  Through Cardlytics, bank customers get a reward program for their debit cards.  Retailers attract new customers with a transaction-based marketing program with a pure pay-for-performance model.  Banks generate additional revenue from debit, an already low-revenue product, which has recently come under even more pressure from the Durban regulation.

Transaction-based marketing could have a fundamental impact on the revenue model of the payments market, which has historically relied heavily on discount revenue funded by merchants.  American Express is the primary example of a company that has pursued a premium discount rate strategy.  They justify this premium by giving merchants access to affluent cardholders who are more likely to spend with merchants that accept the card. 

However, under the discount rate model, merchants are asked to blindly trust that they will see incremental revenues and are generally not offered data to track the impact.  Transaction-based marketing turns this on its head, as merchants pay a much lower discount fee and a fully performance based marketing fee for incremental transactions. 

As Cardlytics and similar providers expand their networks of bank partners and extend their services to other parts of the payments industry, such as prepaid and credit, one could imagine that merchants would increasingly favour this model and shy away from traditional discount rates.  It is therefore no surprise that the payments networks have long tried to implement their own transaction-based marketing services and that industry observers and investors view the emerging market leaders with much interest.

Social Commerce: Leading the Future of Online Shopping & Payments

Until recently, e-commerce was the domain of online shopping sites and payments was a fenced-off part of a now-familiar ‘check-out’ process.   With the emergence of social and geo-location-based services, e-commerce will change fundamentally.  This will disrupt the current online payments process and require more flexible and customisable solutions.  This blog entry looks at the emergence of social commerce, early market leaders and possible implications for online payments.

Although online social networks have been around since the late 90s (sixdegrees.com launched in 1997), the tipping point can be traced to 2003 when PC penetration, the emergence of broadband technologies and the rise of software platforms fuelled the growth of these networks.

Today, these networks have fundamentally changed the online experience from a passive, read-only mode, to an active, read-write experience.  The corporate world has thrown itself on the bandwagon and nearly all companies now have a presence on social networks.  Still, very few have cracked how to transform this presence to dollars on the bottom line. 

In a recent edition of the Lydian Journal, Karen Webster identified 4 forces that will trigger a tipping point for social commerce:

The explosive growth of social networks

·  75% of worldwide online users now visit social networks or blogs, a 24% increase from 2009 

·  Although younger users are more likely to visit social networks, half of Internet users aged 50 – 64 and one in four of users aged 65 or older now use social networks

·   Among the different networks, Facebook is the largest with close to 600 million users, followed by Twitter (190M), MySpace (122M) and LinkedIn (70M)

Social networks become the dominant destinations online

·  Time spent on social networks Facebook and Twitter accounts for nearly one-quarter of the time spent online for Americans, up nearly 50 percent from a year ago

·  One explanation is that social platforms allow their users to do everything from online gaming to messaging with friends to exploring their interests and favourite brands, and thus economise on their time spent online

·  Mobile phones are also increasing the time we spend on social networks; 150 million people connect to Facebook via their mobile and 37% of Twitter users connect via their mobile

Social networks are high-trust sources of information

·  People join social networks to be part of a connected community

·  Communities of peers are high-trust networks where users are more willing to disclose personal information and even make purchases

·  Peer-to-peer word-of-mouth has always been a source of valued, dependable information – social networks have the potential to systematise this and become a hub for purchasing decisions

Merchant begin to see the value and growing importance of social networks

·  Based on the above factors, merchants are beginning to view social networks as a sales channel with which to turn fans into customers

·  Nearly all major retailers have a fan page on Facebook as traffic to their own websites is being cannibalized by traffic on Facebook, where fans are more willing to buy and advocate on behalf of the brand

·  Analysts estimate the value of an average Facebook fan to be $136.38, suggesting that fans are likely to spend an extra $71.84 they would not otherwise have spent

·  More than half of Twitter-users recommend companies or products in their Tweets, with just about that same percentage actually following through to buy that product

Although social networks clearly represent a fantastic prospective sales channel, very few companies have yet managed to generate revenues on these platforms.  Attempts to tap into this opportunity can be grouped in three categories:

·  Shopping cart technology that facilitates check-outs on Facebook (e.g. Payvment)

·  Deal-sites off social networks that drive sales at discounts (e.g. Groupon or Living Spaces)

·  Promotional activities aimed at driving traffic to online or offline stores off social networks (e.g. JetBlue’s Twitter promotions)

However, the next years will no doubt see tremendous innovation and social networks will transform our current experience of online shopping.  New forms of online shopping are likely to tap into social dynamics in new ways and will require more flexible and customisable shopping and payment interfaces. 

It is therefore essential that payment providers develop technologies that can support this development. PayPal and IP Commerce have approached this challenge by opening up their platforms to external developers.  However, the other major players, such as Visa, MasterCard and American Express will undoubtedly have their own responses.