Weekly payments: Facebook Pay, Apple, Netflix

It’s been a big week for big brands in the payments space, with the common theme of getting even bigger.

According to Adam Coyle, CEO of Digital River, who spoke to Karen Webster for the latest edition of The Week in Payments, whether it’s Facebook Pay coming off the platform, Apple’s push. in BNPL or Netflix, which is embarking on digital gaming, they all ask themselves: “What can I do to add value around my platform?” “

“There is a change coming in the way people do business,” Coyle said. “It comes from working from home [trend], and that has been a priority this week, ”he added, noting that how businesses come out of the pandemic and how they adapt will have a significant impact on how and what they sell.

Facebook Pay extension

Facebook has officially announced its intention to pursue its payments law, with plans unveiled this week to make Facebook Pay available outside of its own website for the first time. Expansion will begin next month with Shopify merchants, but Facebook has already made it known that it intends to roll out its payment app around the world.

The move itself, Coyle noted, was expected – the interesting part to watch will be whether or not consumers want to use Facebook Pay when shopping outside of Facebook, and how it fits into their lives. financially compartmentalized. It’s a transition that many have tried, he noted, but has historically proven to be more difficult than most players imagine.

“We saw the challenges of Apple Pay early on, to get people to try it,” he said. “They seem to have found their niche both in brick and mortar and online. It will be interesting to see if Facebook can make the same kind of transition by getting customers used to using their own device or payment vehicle in one context, and then using it in another context.

It’s not an impossible mission, he noted, given the above-average willingness in their core market – millennial consumers – to try new things in a payment context. But, as Webster and Coyle agreed, these digital-native consumers still have to have a reason to override their established payment preferences with Facebook’s new offering. Just because they can use it doesn’t mean they will.

“He’s got to have some independent utility – if not, he’s just another voice in the crowd,” Coyle said.

Apple’s BNPL game

Speaking of standing out in the crowd, the world was watching Apple this week as it was reported that Apple Pay will soon be working with Goldman Sachs to launch the buy now, pay later (BNPL) feature in its digital wallet. According to reports, consumers won’t have to sign up for the Apple Card (which has coincidentally been managed by Goldman since 2019) to use the service, but will have to apply through Apple’s digital wallet.

In Coyle’s estimate, this move was a very smart game – even given the crowded BNPL market, with all kinds of pure startups, big players like PayPal, and even card issuers stepping into the game. The market, he noted, will start to contract as things tighten – and Apple is in a strong position.

“I’m really interested in looking at buy now, pay later solutions because there are a lot of them,” he noted. “And if we get to a point where there is an economic downturn, will some of them start to come out of it?” Apple certainly has the wherewithal to be a long-time player, as it is sort of an independent utility. I think the ease with which they can implement it will be attractive to a lot of people.

Apple, he noted, does not want to become a direct underwriter of credit, but wants to seek out partners to help it provide utility in its wallet and through its devices.

“It would be interesting to know if they think in terms of e-commerce first or if they think in terms of physical stores first,” Coyle said. “They definitely have that franchise, and if they could bring that ability to the physical point of sale, then obviously they’re going to get a lot of traction, because in general it can be difficult for traders.”

Netflix gaming push

This week, Netflix was also looking to build on a huge existing franchise, which all but confirmed its entry into the streaming gaming world with the announcement that it had hired a new gaming division head in previous positions at Facebook and EA.

It’s a necessary expansion and a natural evolution, Coyle told Webster, given how Netflix increasingly defines itself as a home entertainment business that can deliver content of all kinds. What will be interesting to watch, however, is how this changes the nature of competition, as it will put Netflix one-on-one with some players they are not used to competing against, like Amazon and Apple – as well as console makers like Microsoft, Sony and Nintendo that they have never faced before.

“It will be interesting to see how successful they can be and whether consumers want to source this service from this particular compartment,” Coyle said. “The only caveat is that maybe they are a little late and maybe had to jump on it earlier, because obviously the console vendors have been very aggressive in directing people to subscription-based game models. “

The gaming market is becoming just as crowded as the streaming market, he added. “It remains to be seen whether or not this market will evolve to be device specific or whether consumers want something that maybe play on all of their devices,” he said.

In fact, that could be said of any of this week’s expansions. They all make sense in terms of what they offer – but the mystery that hangs over every ad is how consumers will react, how interested they are in the change, and whether any of these new offers and ideas are more compelling. than what already exists.