At Glenbrook, we’re pretty interested in what makes mass consumer adoption of new payments capabilities happen – or not. We’ve been talking lately about “brand as action” – the notion that consumers (and merchants) need a way to express how they are going to pay or be paid.
This can be brand with a “capital B” – “I’ll give you my American Express”, or brand with a “little b” – “I’ll give you a check.” But it has to be something that the consumer understands and the merchant understands. And it has to be something that one consumer can explain to another consumer – even if they bank at different banks, or use different payments services. “I just paid by card” is understood from one consumer to another, regardless of who their card issuers are.
The card brands have obviously been down this track many times, and understandably consider themselves brand experts. But in a way I think they have fooled themselves. The differentiating “capital B” aspect of the MasterCard or Visa or American Express brands is undeniably there, but so is the utilitarian “little b” which comes into play when someone says “give me a credit card” or “I’ll pay you with my debit card”.
I’d argue that the utilitarian “little b” is the grease that has made the gears work. It is an essential component of the large scale, open-loop card networks. The ACH networks biggest successes have come when they have stumbled on “little b” solutions: “direct deposit of payroll” and “preauthorized debit” are pretty generally understood terms. But they have failed dismally on the whole “eCheck” concept: note the following from Amazon’s website:
Payment Methods We Accept
Amazon.com accepts American Express, Diners Club, Discover, JCB, MasterCard, Eurocard, Visa, Visa Check Cards, payment from your bank account, Amazon.com gift cards, Amazon.com Gift Card claim codes*, Amazon Store Card, and Webcertificates.
So it is interesting that when the card networks have introduced important new product capabilities, they have focused on the “capital B” and ignored the need to provide the “little b”.
Here are two examples. One is in the infamous arena of Internet card security. Visa and MasterCard have invested hundreds of millions of dollars and years of work in introducing “Verified by Visa” and “MasterCard SecureCode”. But there is no generic expression that a consumer (or a merchant) can use that covers both (virtually identical) services. Even within the industry, when we talk about it, we stumble over “Verified by Visa or MasterCard Secure Code”. What a mouthful! Let’s say I’m a security conscious consumer, and I’ve signed up for and am using Verified by Visa. I want to tell a friend about it – I start talking about it – she says: “oh, I have a MasterCard” – what do I tell her? Does Visa really think that consumer will say “gee, I better get a Visa”?
So, how are these programs going? Not well, in a nutshell. There are a number of reasons for this – but I think the brand vocabulary issue is a big one.
A newer example is in the whole area of contactless cards. We have MasterCard PayPass and Visa payWave. Two completely different brands for – the same thing! And this a technology that requires a store clerk to be conversant in the whole subject! What conversation do the card networks think is likely to happen between the teenager staffing the 7-11 and the confused consumer with a wallet of cards? Couldn’t the networks at least have quietly collaborated on a “small b” nomenclature for consumers and merchants to use? Admittedly, they did at least collaborate on an acceptance mark:
But how useful is that?
Can a consumer say:
And don’t get me started on the whole confusion over tapping versus waving. I won’t belabor the point – but I think you get my drift.
Not long ago, I hired a consultant I found on the Internet to help me with some computer problems. We had a short, satisfactory business relationship – and I then emailed her, asked her to send me an invoice, and asked her how I should pay her. The answer came right back: “just PayPal it to me”. She understood, I understood: brand as action.
Now ask yourself: if you are an open-loop card network, what’s worse than the failure of a new payment method due to your own failure to provide the market with a “little b” brand? Maybe it’s having one competitor gain mind-share with a “capital B” brand!