Mercator Perspectives

The Two Questions New Product Designers Must Ask

1. Can this be done?
2. Will customers do it?

The first question is a technical one. Can we set up the programs, integrate to the systems, and deploy the point-of-sale terminals to make payments happen in the way that we want? Despite the complex nature of this question, it is often the easier one to answer. Technically, a wide range of options exists for payments innovations. Software and hardware engineers have done innovative and fascinating things that would have seemed impossible not too long ago.

The second question is a cultural one. When one asks whether customers will adopt something, the term customer needs to be divided into two more pieces. On one side you have the payment acceptor, the retailer, service provider, or other company who is charging for a product or service. On the other side you have the end user of the payment device.

For the merchant, new technologies present new expenses in time and money. They need to upgrade their points of sale, retrain their staff, and make customers aware of their acceptance of a new payment type. Overcoming the hurdles of legacy systems and limited budgets are the task of any payments innovator. Those bringing new payments to market need to find ways to show that the value of accepting new payments is greater than the costs and temporary hassles of adopting them.

For the end user, the cultural question is whether or not the shopper will like the new way to pay enough to stop using the cash in their wallet, the cards that give them rewards, and the last gee whiz application they downloaded. There is also the issue of expectations. In others words, some people will always give plastic gift cards because the plastic means they have something to wrap and hand over to their mothers and significant others.

While this can all seem like a big hassle for bringing something new to market, innovators should take heart. It has been done many times before, as evidenced by the plethora of payments options today. In strategizing around bringing new tools to market, payments companies should think about the obstacles that exist in both of these arenas and work to solve them simultaneously. This will help lead to a smoother product launch and path to profitability.

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