Consumers Weigh in on Different Payment Solutions and Technology Standards
Resource for Evaluating a Disruptive Innovation (READI) Model
The READI Model was developed by Crimson Hexagon to illustrate how social intelligence can play a pivotal role in an organization’s decision-making and product development process. The READI Model outlines a new path industry incumbents and institutional investors can take when evaluating consumer-facing innovations. Analyzing the underlying motivations of consumers in both existing and emerging markets, the READI Model empowers these firms to better understand the market opportunities or threats presented by a disruptive innovation, and to help optimize a timely, strategic organizational response. Are you READI?
In part one of this study, we explored the current state of mobile payments and uncovered the factors driving consumers’ bullish and bearish sentiment on the industry. For example, we learned that the majority of consumers discussing mobile payments are bullish (58%), and 7% explicitly state this payment option will be the future of payments.
Regarding bearish sentiment, some consumers are confused by all of the available mobile payment products (7%); however, consumers’ strongest aversion to mobile payments is grounded in uneasiness with data security (22%).
Referencing the framework provided in the READI Model, what can we now learn about specific early movers in mobile payments? Do any of these firms have product messaging that emphasizes security measures?
Square Wallet vs. Google Wallet
Companies can anticipate and react to new marketplace shifts caused by mobile payment technology by strategically tapping into the voice of the consumer. For the purpose of this study, we chose to compare Square Wallet and Google Wallet: Cloud-based vs. NFC technology.
Using the Crimson Hexagon ForSight™ platform, we analyzed over 2,500 relevant online opinions about Square Wallet—the firm’s rebranded “Pay with Square” product. Over the past 14 months, consumer reactions to Square Wallet have been extremely positive (86%). Interestingly, 24% perceive Square as truly game-changing technology, and explicitly equated Square Wallet with overall industry appeal: the future of payments.
“I LOVE that I can pay for my @starbucks with my @SquareWallet! I can’t believe how fast it seems @square has grown! #futurenow #winning”
In addition, over half of the total conversation is consumer praise of Square Wallet, and clamor for a more widespread merchant implementation. Not only are consumers wowed by the tangibility of this technology, but some 43% then postulate as to other familiar transactions in which they could utilize mobile payments. These consumers crave for more merchants to adopt Square Wallet as a method of payment.
“Just bought lunch w/ @PayWithSquare from @Square- once you do this you want EVERY retailer/restaurant to offer it. So seamless, so great.”
On the other hand, Google Wallet reveals quite a different story. Despite 10x greater discussion volume (over 25,000 relevant posts) during the same time period, net sentiment is considerably more unfavorable than Square—only 41% of the conversation is positive. In evaluating the conversational breakdown, there are a few interesting points to highlight in this comparison.
First, the conversation about Google Wallet followed a similar structure to Square Wallet, including a portion of consumer praise when using the technology. However, on the positive side, we also discover that this product is devoid of one special consumer classification: the future of payments. In the eyes of consumers, Google Wallet is not perceived as a game-changer in the payment space.
What’s more, when compared to Square (43%), Google Wallet fails to create an impetus for merchant adoption—only 4% of the conversation demands more merchants to embrace the product as an acceptable payment method.
On the negative side, we found that Google Wallet is plagued by poor app performance (27%), and that the underlying product technology is actually causing frustration. We found this fascinating: consumers are actually weighing in on the battle of technology standards here. In the case of Google Wallet, the absence of NFC technology in smartphones frustrates Google Wallet hopefuls, and has stalled product adoption. As a cloud-based solution, Square remains unaffected by upstream supplier conflict, namely the lack of commitment on the part of device manufacturers to include an NFC chip in all smartphone designs.
Square Partners with Starbucks
What happens when mobile payments became a reality for consumers in the marketplace? Overall, consumer reactions to the highly publicized Square-Starbucks implementation were overwhelmingly positive (96%). Consumers identified the benefits of this relationship for the merchant and the mobile payment provider, and 39% expressed excitement about the new possibilities provided by this partnership. But most interestingly, 45% have even decreed that this partnership—between Square and Starbucks—will change the landscape of mobile payments and ignite the industry.
“Excellent! Now I can use square wallet at Starbucks. One step closer to not needing my wallet =)”
“Woke up to amazing news this morning! Starbucks officially accepts Square Wallet! Maybe I’ll start drinking their coffee.”
And despite minimal negative opinion (4%), consumers are quick to point out that Square does not yet integrate with Starbucks’ loyalty program. Though not a substantial risk at present, prudence dictates monitoring this concern over time.
Deep analysis of online consumer opinion complements due diligence on new market entrants, and potential investment opportunities. With the case of mobile payments, we will continue to gauge the appeal of subsequent merchant partnerships at Crimson Hexagon and uncover the causes for new consumer excitement or reasons for competitor migration.
When employed within a business entity, social intelligence provides a dynamic business-relevant reflex: it can be employed to evaluate new business strategy and to inform the appropriate organizational response to new and disruptive innovations, and marketplace shifts. The READI Model facilitates this discovery process, providing a framework from which firms can drill down into discussions related to specific early movers, as well as consumer perceptions of the emerging market as a whole.
If you want to learn more about our findings, and how social media analytics can be used to gain a more complete picture of portfolio companies, potential investments, and disruptive innovations, download our complimentary ebook.