Jun 2, 2012

Payment Innovation - US versus Rest of World

If you live in the US, you know what this picture is.

87% of Americans use paper coupons on a regular basis. It is so common that they have a TV show about it called Extreme Couponing.

When US companies innovate in this space, they copy the paper coupon and make it digital. Virtually all of the mobile shopping applications today emulate paper coupons in one way or another. This is virtually the only paradigm that people seem to be aware of.

When American Express decided to go into social media, they launched Link Like Love. This is essentially a digital coupon clipping service. You Tweet about an offer you want, the "coupon" gets clipped and added to your card, and you get the discount when you shop.

People in most other parts of the world know what coupons are of course, but very few of them know how pervasive couponing is in the US. Hardly anybody outside the US spends hours each week clipping through paper coupons before going grocery shopping. You don't see Sunday newspapers filled with 20 pages of coupons. On the other hand, there are marketing techniques in Asia and other parts of the world that work very well, and that US businesses are not aware of. Innovation in mobile payments has so far neglected these.

Take the picture on the right, of credit card offers in front of a restaurant in Singapore. When people across Asia, Latin America, the Middle East and some parts of Europe see this picture, they know immediately what it is. Most people have enjoyed a discount simply by paying with one bank's credit card versus another.

Taggo comes from this angle. Our Fan Clubs service uses this paradigm instead of the coupon paradigm. One benefit is that retailers outside the US understand it very clearly, better than the coupon clipping paradigm. Another benefit is that it results in a solution that is much more simple and elegant than what is currently coming out of US payment innovation. Of course, I do expect that it would work very well in the US as well.

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