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Innovation at the Intersections (Payments is not Just about Payments)

October.06.2014 0 Comments



Mobility is an enabling industry. Why? Because it touches almost every other industry. It creates new value in spaces that are adjacent to it, and it seems as if there isn’t one industry that isn’t benefitting from new value creation from mobility. This is not because there is some secret altruistic pledge to enable innovation outside the mobile borders, but because mobility naturally reveals experiences and propositions that create that new value. From Aerospace to Zoo-keeping, mobile technology is fundamentally changing the way certain things have been done.

Similarly, Payments is also an industry that touches everything else, in the broad sense of the word. Whenever and wherever there is some value being exchanged in a transaction of any kind, there is potential for money to change hands. Of course, this is not by deliberate design, but “by definition”. Perhaps, that’s why people have begun referring to some of the recent innovations in the space as “commerce” innovations, not “payments” innovations. And if we think about the power of the commerce transaction (the new, improved, digital version) in the context of any specific industry – healthcare, transportation, publishing, education, etc., it’s not hard to see that those industries also benefit structurally because of innovation coming “from outside”, e.g. the Uber car service features behind-the-scenes payments enabled by Braintree, which is a huge convenience compared to traditional taxi services.

Now, if mobility and payments are both enabling industries, which one is enabling the other? So far, it seems that mobility is adding more value to payments, just like technology in general. Now, if any of the newer digital wallets (those not owned/managed by a financial institution) starts making money because it chooses to get into the payments business (while still being mobile/technology companies overall), then we could say that the reverse is true, but we are not there yet. However, instead of trying to figure out which of the 2 is “more enabling”, it’s more interesting to look at mobile payments/commerce (the intersection which continues to be riveting for insiders like us) as an enabler itself. Perhaps a double enabler!

Mobile payments/commerce has the potential to transform entire industries. Healthcare, Retail, Music, Publishing, Hospitality, etc. all stand to benefit from the incremental efficiencies that it unlocks. No wonder, entities like MCX are formed in the Retail world with the undeclared objective of fundamentally altering cost structures and potentially consumer behavior as well. Would e-books have become popular if it were cumbersome to buy them? iTunes without the card-on-file feature might never have taken off. Similar transformational initiatives in hospitals, airports, resorts, stadiums, etc. are already afoot.

At LTP, despite the “Payments” in our name, we really cover commerce broadly. We will continue to expand coverage into areas that might not be always obvious, but the possibility of true impactful innovation at these intersections, especially digital/mobile payments + Industry X, is very inspiring for us to expand and grow.

Finally, as we celebrate 1 year+ of LTP being live, we wanted to take a moment and thank our readers for being part of the journey with us.