Assignment 1 - Hip to be Square

Sonal Rewanwar

Answer 1:
The shift into the new mobile payment market started mainly with the advancements in wireless connectivity. The availability of cheap and readily available cellular and WiFi connectivity gave merchants an option to move from the restrictive and geographically limited wired point of sales.
The major contributors to this shift were the four payment services using mobile payments that sprung up, namely,
1.
2.
3.
4.

Premium Mobile SMS Based payments
Direct Mobile Billing
Mobile web payments
NFC based payments

Premium Mobile SMS Based payments:
This service allowed for the payments of a purchase to be made via an SMS based service. The charges from the same were added in the users monthly bill or deducted from the prepaid account balance. Direct Mobile Billing:
Similar to SMS based billing, this was an utility used on smartphones. This involved a two step authentication procedure to securely authorize payments from the smart phone.This did not require and credit card or bank accounts and the charges were levied on the customers mobile account again. Mobile web payments:
Consumers made payments using internet based application or internet browser. Similar to Paypal this required credit cards/debit cards
NFC based payments:
This technology relied on RFID enabled chips or NFC enabled smartphones to communicate with the radio frequency enabled receiver. The payment information was wirelessly communicated between the receiver and payers device using RFID and payments were authorized. This was the most popular and easy to use service which many believed had the most promising future.
Thus the ease of payments both for the merchant the payer, brought by advancements and innovations in Information Technology, led to a surge in mobile payment industry.
Answer 2:
a) With the lightening fast advancements in technology and its innovative applications in various problem spaces, the number of products for a customer to choose form and their features has sky rocketed.
b) Although, this competition ensures timely improvements in the quality of products and also an environment in the market where the customer benefits the most, there is also a huge down side to this mass consumerization.

Assignment 1 - Hip to be Square

Sonal Rewanwar

c) The various collaborations and competitors being left out from the same, competitors coming up with almost similar products with slight improvements/differences, Products using same technology but different competitor backends, and many more such reasons often lead to extreme fragmentation of customer base.
d) This is strikingly evident in fields that experience a technology boom and lot of market players jumping in the domain in a short time period.
e) This fragmentation of consumer base not only leads to an extremely volatile market place but also makes it very difficult for a market player to claim market majority or leadership in the domain. f) Thus, mass consumerization of technology erodes market leadership.

Answer 3:
a) The age today demands solutions that are highly collaborated with technology for the ease of customer use and experience.
b) Unlike a few decades age, not only is it important, today, to provide a robust solution to the problem at hand but also one that is technology savvy.
c) Companies with legacy products of supreme quality also have acknowledged this fact and have begun their journey in joining hands with technology a long time back.
d) The main reason for this is proliferation of technology in a common mans' life, easy availability of increasingly affordable hardware and increasing comfort level of a large number of consumers with technology.
e) It is veritable that not only does technology help the customers in better and more easily accessing the services but also merchants and service providers in providing the services.
f) In such an age, the service provider with a product more tightly coupled with technology surely gains and edge; and it also might be a case that a better service provider might lose out on consumer base since it's product isn't as technology enabled.
g) This not only means that it becomes difficult for more and more service providers to gain market leadership since they need technological expertise along with domain expertise too, but also means that a service provide cannot rest on it's laurels since a competitor might come up with a more technologically advanced solution solving the same problem in a better way. Or come up with a new technology altogether, to solve the same problem better. h) This makes gaining and sustaining market advantage more and more difficult for a service provider. Answer 4:
a)
b)
c)
d)

Coming up with services that are a perfect blend between problem solution and technology.
Security concerns arising out of the popular adoption of mobile payments.
Standardization of protocols/mobile payment laws/regulations.
Coping up with rapidly changing horizon of mobile hardware and software/ hardware and software support from manufacturers.

Assignment 1 - Hip to be Square

Sonal Rewanwar

e) Reliability of mobile networks and smart phone technology penetration especially in developing countries.
f) Handling scattered collaborations and too many products so as to consolidate consumer base and bring up standardized products.
Answer 5:
My understanding of Square and their business prompts me to say that it would be beneficial for
Square to invest back into its customers in form of the options enumerated below,
a) Expand product offerings to existing customer base.
b) Offer Additional End-user focused services.
c) Monetize transactional data in terms of mining the same for user benefit.
The above three options are closer to the concept of organic growth as put forth by the author, i feel. Sighting that there is still scope of growth, and a substantial one- one that can highly improve the user experience of their existing base-it is prudent to consolidate this ground as a priority before moving on towards adjacencies of customer base or newer markets.
Although, intuitively, expanding to new adjacencies or international markets gives a sense of larger profit promises, expanding to the same after having a robust and a well rounded product that caters to the customer base makes more sense.
Not only will this ensure that the existing customer base isnt hampered by the shift in focus while expansion but also ensure that a robust, well rounded and a tested product is available with the company to launch in new markets/ adjacencies.
Providing knowledge from transactional data can also create a substantial and a steady stream of income from merchants that can use the knowledge to make help their businesses.
An added feel of security and trust that merchants already has with Square can help with adoption of the product as well.