All The Fintech - Issue #12

Hi everyone -

I was on a vacation in Stockholm and Copenhagen so I missed last week's newsletter! While in Copenhagen, I couldn't help but notice that I barely touched cash for any of my purchases. All of the merchants, retailers, and restaurants I went to accepted my chip card and a lot of them were also on MobilePay. After some further research, turns out MobilePay was developed by Danske Bank and was able to gain significant market share and merchant acceptance (which might be more important) by offering a best in class solution that was first to market amongst the large banks in Denmark. Initially starting in 2013 as a P2P payment mobile app, the app soon grew into a widespread mobile payment method accepted by merchants. User adoption was extremely key as, within just four months there were 500,000 users, and three years after the launch, more than 3.4MM Danes had downloaded the application.

That playbook sure sounds familiar for Venmo, Square, Zelle and Apple Pay in the US. One thing that typically isn't discussed in conjunction with P2P offerings from Venmo + Square are their developer platforms for merchants. MobilePay was pretty ubiquitous amongst a wide range of merchants and I am curious to try to find out more about how that happened.

I believe that one of the key success factors for merchant acceptance and distribution for any "wallet" is the ease of which one can integrate with said wallet. Venmo merchants can integrate Braintree, Square Cash merchants can integrate Square, and Apple Pay merchants can integrate Square + Stripe + many others. I have yet to see an equivalent merchant integration platform from the banks, although Chase's WePay acquisition might have come to play there shortly (whether for more adoption of Chase Pay or Zelle though, I'm not sure). Venmo and Square's issuance of a linked debit card is also an interesting strategy to test user demographic spending habits and potential merchant adoption (i.e. focus platform wherever cards are being chipped) without the need for an integration.

Still early days in mobile payments in the US...