Getting tough with China? Good luck.

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If you thought Apple’s recent confrontation with the FBI over phone hacking was fun, you’ll love the sequel taking place in China.

The People’s Republic of China does not have, shall we say, the regard for freedom of access that we in the United States have. According to a recent article in The New York Times, Chinese authorities demand more than the international norm when it comes to prying behind encrypted doors. Nor does China let high tech corporate leaders answer its questions via electronic communication. Executives are required to show up in person. 

And then there’s the matter of government-run Internet censorship in China, which has earned itself the nickname “Great Firewall of China.” It keeps Chinese citizens from accessing what authorities don’t want them accessing. Obviously the Firewall defies market demand. There would have been no need for it were not Chinese citizens accessing, aka creating demand for, now-verboten material.

We’re a little spoiled in the United States. Yeah, I know, we endure our fair share of onerous regulations, especially in financial services, but we still operate in a fairly market-driven economy. It’s tempting to assume that that’s how the world works: Meet market demand and you’ll prosper; don’t and you’d better adapt or go out of business. So it might be tempting for Apple, Google, et al to sit back and smugly wait for Chinese market forces to change the government’s mind.

Just one problem. Well, actually, 700 million problems, all of them living in China and using the Internet. In a reversal that not a few Libertarians should find disturbing, China’s Internet has experienced record growth. The Washington Post reports that China’s 700 million users account for nearly 25 percent of the world market. That’s a slice big enough to make it financially unwise for even the smuggest company to take its ball and go home. The Post also reports:

China is the world’s leader in e-commerce, with digital retail sales volume double that of the United States and accounting for a staggering 40 percent of the global total, according to digital business research company eMarketer. Last year, it also boasted four of the top 10 Internet companies in the world ranked by market capitalization …

Apple, not terribly fond of letting governments into iPhones and iPads, tried getting tough with China. It ended up taking one for the team: China out-toughed them by shutting down iTunes Movies and iBooks. Between China and Apple, guess whose stock took the hit.

The fun has only just begun. Not long ago, Russia’s Safe Internet League, which is a euphemism for “censorship committee” and is at best only nominally a non-government entity, took an admiring look at the Great Firewall and said, “Cool.” Last month, the League met with China’s chief of cybersecurity and Internet policy, presumably to seek advice.

China and Russia. Ideology aside, that’s a lot of users to leave to a competing high tech company willing to play ball with censors.

Oddly enough, all of this is market forces at work. It’s just that you have governments controlling the market forces that control the capitalist tech companies. It’s not supposed to work that way. Is it?

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New player in DYI payments

Securion logoThe Internet has a history of taking services that once required a professional and making them accessible to the Do It Yourself (DYI) crowd.

Not that you can expect to end up with the same level of quality you’d expect from a professional. Knowing your way around the likes of, say, desktop publishing, digital music, word processing, and website template applications doesn’t necessarily make you a designer, rock star, author, or web designer. But if you see no difference between your homemade effort and that of a professional, or if you do see a difference but don’t value it enough to pony up, a DYI app might just be the way to go.

Might be. There’s a caveat. Take a DYI website made from a template app. It may please its creator, but pleasing customers is another matter. Customers have grown accustomed to experiencing world-class sites. If a DYI site lacks a certain look, feel, tone, user-friendliness, or je ne sais quoi, it can end up costing you business.

It was inevitable that the DYI trend would make its way into the payments industry. PayPal and others blazed that trail. Now, Swiss company SecurionPay has announced an online payments function designed to work with drag-and-drop website builder Weebly.

Though there is some question as to whether SecurionPay differs substantially from other DYI payment apps, positioning itself as a made-for-Weebly product creates the impression of a Unique Selling Proposition, or USP. Weebly is klutz-proof and easy to use. Devotees may well favor an option designed specifically for it.

Like other DYI applications, SecurionPay has its limits. Right now it’s available only to companies incorporated in Europe. It lacks the breadth of options and resources that major players like Fiserv, my employer, offers. Its niche will likely be smaller companies that don’t need or can’t afford a full suite of services. There are a lot of them out there. As such, SecurionPay and others like it promise to fill a viable niche.

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PayPal: Making business
and consumer news

Keep an eye on these guys.

Keep an eye on these guys.

PayPal has been showing up quite a bit in the news lately, and not just in the business press. Consumers are well aware that PayPal nixed its plans to build a facility in North Carolina following Governor Pat McCrory’s signing of the Public Facilities Privacy and Securities Act. 

PayPal is making news in the trade press, too. PayPal One Touch, introduced last year, has 21 million and counting active users. As “One Touch” implies, users log in once and, from there, purchase with a single touch on a mobile device, laptop, or desktop computer. Increasingly, retail merchants like Macy’s and others are accepting One Touch as well. 

According to a report published two days ago entitled “Online Payment Type: Conversion Analysis,” by comScore’s Associate Analyst of Media Insights Amy Peterson, PayPal enjoyed a conversion rate of 87.5 percent during Q4 of 2015. Visa came in a distant second with 51.1 percent. “All others” combined totaled 45.6 percent, that is, just over half of PayPal’s performance. 

So when Kat McKerrow of recently reported, “PayPal has grown into a giant,” she was not hyperbolizing. “In 2015 alone,” wrote McKerrow, “the company processed 4.9 billion payments, more than a quarter of which were made with mobile technology. The company has 179 million active customer accounts and handles transactions in more than 200 markets worldwide and in more than 100 currencies.” 

It would not be unfair to characterize PayPal as something of a tail that has wagged more than a few dogs. PayPay began life in 1998 under the name Confinity, making security software for handheld devices. In 2000, Confinity merged with, Elon Musk’s foray into online banking. Later that year, Musk discontinued other online banking operations to focus on Confinity, by then rebranded as PayPal. Not longer after, he changed the parent company’s name from to PayPal. 

It was only a question of time before PayPal went public. Shortly after the IPO, eBay gobbled up PayPal and encouraged its shoppers to use it. With shoppers only too willing to comply, PayPal took off, outperforming and outlasting competing payment services such as Citibank’s c2it, Yahoo!’s PayDirect, Google Checkout, and Western Union’s BidPay. 

It wasn’t long before the acquired became the acquirer. Over the years, PayPal has picked up Verisign, Fraud Sciences (per Wikipedia, “a privately held Israeli start-up company with expertise in online risk tools”), Bill Me Later (now PayPal CREDIT), IronPearl, BrainTree, Xoom Corporation, and others. Along the way, PayPal forged partnerships with the likes of MasterCard, Discover, and others. 

Midway through last year, eBay spun off PayPal into a separate, publicly traded company. If recent numbers are any indication, the newly independent PayPal should manage quite well on its own.

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Say goodbye to
Google Wallet Card

But not to Google Wallet.

Sent packing.

Sent packing.

Google Wallet is getting out of the loadable debit card business.

A few days ago, an email from the Google Wallet Team told cardholders, “After careful consideration, we’ve decided that we’ll no longer support the Wallet Card as of June 30.”

Nor does it appear that Google plans to replace the card, as indicated by Google’s having referred cardholders to American Express and Simple, promising them an “added bonus” at sign-up.

The email offers no explanation for the move, and beyond announcing the card’s discontinuation, Google is keeping mum.

Still, it’s clear that Google remains very much in the payments arena. The email’s penultimate paragraph reads, “As we wind down support for the Wallet Card, we’re excited to continue enhancing Google Wallet to give you the best possible experience when paying friends and family. We’re hard at work on new features, so keep an eye out for those in the coming months.”

Curious to see where this leads? Me too. I’ll keep you posted.

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Of cryptocards
and being first

In a feat of logic, the BitPlastic, Xapo, CoinKite, and Bit-x cards each claim to have arrived before the others


FROM THE MOMENT in 2009 when Bitcoin debuted as the world’s first decentralized cryptocurrency, I knew it was a question of time before someone introduced the world’s first cryptocurrency-based debit card.

What I hadn’t expected was just how many someones that would turn out to be. A casual search reveals that the BitPlastic, Xapo, CoinKite, and Bit-x cards all claim to have been first. In fact, they make a big deal of it.

For all of them to have been first presents something of a mathematical impossibility. Why go to the trouble of making that claim? I cannot help but wonder if someone in their marketing department read Al Ries and Jack Trout’s book Positioning: The Battle for Your Mind and decided they had to be first at all costs.

If that was the case, they don’t understand firstness.

Don’t get me wrong. Being first has its advantages. 3M Post-It® Notes provides a good example. Of the many knockoffs out there, I bet you can’t name one.

And remember Snuggie, the blanket-bathrobe hybrid that took the world by storm a few years ago? Bet you can’t name one Snuggie knockoff either.

Fooled you. Snuggie is a knockoff. The first blanket-bathrobe hybrid was the Snanket. And I bet you never heard of it.

What soft drink comes first to mind? If you’re like most people, you thought of Coca-Cola. (And yes, the name really does derive from the fact that the original recipe contained cocaine from the coca leaf and caffeine from the kola nut.) Yet orange soda, root beer, and Dr Pepper all came along first. Somehow, I don’t expect that revelation to win away very many Coke aficionados.

All of which demonstrates a point about being first that not a few marketers miss.

First in the customer mind, which is a strong position, doesn’t necessarily follow from being chronologically first. It follows from delivering a level of quality that sets you apart, and from effectively communicating as much to your target market.

Sometimes advertising goes to absurd lengths to get away with claims of having been the first to market. Don’t bother. You needn’t have arrived first to be first.

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