Innovative: The Case for Persistence
The going paradigm of today seems to be, “If your innovative product or service doesn’t take off quickly, move on to something else.” I understand that the market today responds positively to ideas that look innovative and that have a growth trajectory like a fighter jet taking off.
But, sometimes, Innovation requires Persistence.
This is particularly true with market-transforming innovations. So, what happens when the solution is too innovative, but the opportunity is too good to pass up?
Allow me to reminisce about one of those times. . .
In the early 2000’s, the participants in the Canadian payments industry decided it was time for Canada to migrate from magstripe cards to EMV (chip) cards. It was a unique cooperative experience as issuers, acquirers, payment networks, and major merchants worked together to define what a Canadian EMV market should look like. The Canadian EMV workgroup charted a path and a cadence for the market-wide transformation that proved to be feasible and ultimately successful.
About this same time, Mastercard invented a new technology for cards to interact with payment terminals: contactless. They called it PayPass. Though this type of near field communications was in limited use in security and access applications, it had never been commercialized for use in payment cards.
PayPass was innovative – and it was definitely at least 10 steps ahead of what Canadians were ready to do. Canadians were already transitioning from swiping their cards (magstripe) to dipping their cards (contact EMV). That transition was enough of a stretch for the public to handle – why would anyone introduce another POS interaction method at this time?!!
The opportunity was too good to miss.
The senior executives at Mastercard Canada realized that every Mastercard card in Canada had to be reissued – replacing the magstripe cards with contact EMV cards. Every POS terminal in Canada had to be upgraded or replaced to accept these EMV cards. The issuers and acquirers were already taking on these expenses. For a small percentage incremental cost, these cards and terminals could be upgraded to include contact and contactless interfaces.
The Mastercard Canada Executive and account teams worked with the Canadian Mastercard members to help them overcome the expense delta. They added contactless to their new EMV cards and terminals. Soon, there were some cards and some terminals in market.
There were a few technical problems – but work arounds were soon created. The number of tap cards and terminals in market started growing.
The big challenge was. . . nobody knew how to use contactless. The public was not even sure they wanted to use contactless.
As the number of cards and terminals in market grew, the Mastercard Canada teams kicked into action. It was a crazy time. We were up to our eyeballs in EMV, and somehow, we had to teach and incent Canadians to – tap their cards!
Led by the Marketing, Market Development, and Account teams, the efforts became more creative as time moved on:
Advertising tap (PayPass),
Informational ads telling people how to tap,
Cardholder and merchant educational statement inserts,
Setting up PayPass logos all over the place,
Teaching No Frills staff how to tap and then running an incentive promotion to see which of them could get the most people to tap,
Getting PayPass into Tim Hortons,
The PayPass truck. It had tap terminals all over it. The team with the truck would hand people cards and get them to try tapping on the truck’s terminals 3 times. Then they would tell the people these were $5 prepaid cards that they could tap in the Tim Hortons just across the parking lot.
I remember a day about five years after tap (PayPass) came into the Canadian market. I walked into a home improvement store to purchase something. When I reached the checkout, there was a handwritten sign over the terminal:
TAP NOT ACCEPTED
At that moment, I knew Mastercard’s innovation had finally won.
People were tapping. I was tracking the transaction data, and I could see tap usage rising. People were now also asking to tap – and stores suddenly had to self-identify to customers that they couldn’t do that – yet.
It took five years of focused persistent effort to reach the tipping point. It was a long difficult journey to take people from fearing the innovation to now considering tapping normal payment behaviour!
Once tap got going in Canada, it took off. It had moved from an “innovation too far ahead” to table stakes for any issuer and any merchant. Soon everyone was adding tap. . .