3 examples when Digital Payments failed. What can they learn from store cards?


1. BebaPay

BebaPay was Google’s attempt to introduce digital payments to Kenya. BebaPay was a prepaid card powered by Near Field Communication (NFC) technology. It was first introduced to the transport system with the view to extend to shops and small businesses. BebaPay also hoped to expand to other parts of Africa eventually. It was introduced to the transport system to solve the inefficiencies of the current cash-based system. Commuters were running out of change, losing their tickets and sometimes being overcharged. Drivers and conductors were unable to obtain meaningful data to assess where the popular routes were. BebaPay was trying to make payments simpler but ultimately found it hard to compete with the simplicity of cash. With cash, bus operators were paid in real-time and to the full cent. They also had more flexibility and privacy to do as they wish with the cash. For everyday consumers, BebaPay was less convenient than cash and therefore had no value-add. With the bus operators offside, commuters indifferent and no regulation/law to enforce the use of BebaPay. It died.


2. Square Wallet

Square was a digital wallet, invented by Jack Dorsey (inventor of Twitter). Square is a mobile application with a credit card reader attached to a plug-in from a headphone jack. Customers could swipe their credit card and set up a tab with their name and then head into one of the participating stores to pay by just saying their name. It was supposed to revolutionize payments by making transactions more human and easier. However, against the convenience of cash, cards and the benefits of store cards, Square did not add enough value to cause any real disruption. Even with Starbucks and Whole Foods Markets on-boarded, it failed to gain widespread adoption. The application was removed from Apple and Play stores.


3. Google Wallet

Similarly, Google Wallet failed to gain adoption for similar reason. The NFC chip wasn’t integrated with many devices and the user experience wasn’t compelling enough to gain widespread adoption. It made payment simpler but not simpler than what was already available.

Digital payment ventures based only around the idea of simpler payments may wish to ask themselves the following questions. Am I really making it simpler? How well do I know my customers, both the merchants and users? Will I be adding an additional layer of complexity?

Vs Starbucks

Alternatively, store cards like the Starbucks store card have done very well. Starbucks store cards have had widespread adoption with millions of active users and billions of dollars being deposited into their cards annually. The differentiator being the loyalty program and free in-store deals that provides customers with a true end-to-end customer and payment experience.