In a small business market, where most companies are non-costumers, Paypal has taken value innovative leadership in developing the market for creditcard payments.
PayPal Here is the world’s first global mobile payments solution that allows small businesses to accept secure creditcard payment. The new service includes a free app and fully encrypted thumb-sized card reader, which turns any iPhone, and soon Android smartphone, into a mobile payment solution.With PayPal Here, small businesses, service providers, and casual sellers can accept debit and credit cards PayPal using one simple product.
A simple credit card reader for your mobilphone or tablet. Plug it in and you got an advanced card terminal accepting all cards.
Value Innovation is the simultaneous pursuit of differentiation and low costs. Focusing on making the competition irrelevant by creating a leaf of value for both the customer and the company and thereby opening up new and uncontested market space. Because value for buyers comes form the offering’s utility minus it’s price and because value for the company is generated from the offering’s price minus it’s cost, Value Innovation is achieved only when the whole system of utility, price and cost is aligned.
Paypal has proven that they can cut the cost of a card terminal and eliminate the installations costs. They engage a whole new market segment which all the traditional players ignore. But as we know many little things add up to a lot.
Paypal focus on the non-cusutomers
Traditionally, to grow their market share companies strive to retain and expand existing customers. This often leads to finer segmentation and greater tailoring of offerings to better meet the customer preferences.
Paypal Here open up oppertunities in all three tiers of non-customers. They have taken the reverse course of their competitors. instead of concentrating on customers, they need to look to non-customers. Instead of focusing on customer differences, they build a solution based on technology platform used daily by all of us.
The convenience of your customer can be more crucial to the purchasing decision than the price. Payment methods is something every business, small or large, can not afford to neglect in their businessplan.
I hope this initiates a wave of rethinking the creditcard business and hopefully banking in general terms. We need changes in this industry.