Monday, April 25, 2011

Facebook deals: the start of a new payment system?

It does happen that I don't know much about what I talk or write. This article is a case in point and it was triggered by the well-published launch of Facebook Deals. (Read here). The new industry offering real world deals (or coupons or offers) to digital social networks is really fascinating. While it is still very much in its infancy, I do believe that it has the potential to produce some killer applications.

First a summary of what is out there:
  • Groupon is probably one of the pioneers of this industry, having launched the service in 2008. Today it is available in a hundred markets and have 35 million registered subscribers.
  • Living Social is a similar company based in Washington and has close ties with Amazon.
  • Google Offer was recently launched and is growing into new regions on the Google brand.
  • Of course there are many-many more similar examples. Companies with names like LevelUp, Scoutmob, zozi, etc.
Why is it important from a payment perspective:
  • It strikes me that the process of offer, accept and pay will change. This may require a new way to pay.
  • Many existing payment features (like refunds, discounts, fees and commissions), may not be suitable for this world. Payment schemes offering more suitable features will work better.
  • The existing payment domain (so called four party model), may not map onto this world, with much more intermediaries that will participate in the payment process.
It is definitively important to scratch around in this industry from a payment perspective. My gut feel is that there is something that someone may just uncover that will make coupons/offers and deals much more palatable if the payment experience is better.

1 comment:

Frans Stander said...

There has definetely been a huge surge in new innovations in payment method solutions during the past five years, especially during 2010-2011.

This is realy healthy for the international market, with so many passionate ventures being launched. Also note the take-up by the very large corporations, scrambling to be the first to get a foot in the door on new innovations.

This is good for technology, good for the entrepreneur and good for the global market take-up, as this ensures a vibrant and dynamic flow of ever improving payment solutions being devised, tested and deployed,... healthy competition and something to suit the ever increasing demand of different products to suit different markets.

Never a dull moment in this industry.