A Forrester Research report analyzes the early successes and failures of Apple’s mobile payments system.
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Another way for consumers to sign up free for the InstaBuy service is by visiting www.instabuy.com, which advertises selected specials from many of the participating merchants, including The Sharper Image, Sports Superstore and Egghead.com. “Instabuy.com represents a launch point, a Web site where consumers can get their InstaBuy wallets and start buying online with ease,” says Yaro.
While CyberCash executives are mum on the exact cost of InstaBuy, Perez says the company is tinkering with the payment formula to reduce any perceived barrier to entry. But its biggest ally so far may well be First USA. The Wilmington, Del., credit-card behemoth is marketing the InstaBuy technology on a non-exclusive basis under the name VersaPay, and already fields a merchant roster that includes Borders.com, CDnow and 1-800-FLOWERS.
Perhaps the biggest challenge facing CyberCash is selling merchants and consumers on the virtues of InstaBuy. If the customers are there, the merchants will follow. And if the merchants are there, the customers will find them. “It’s kind of a chicken-and-egg thing,” Yaro admits.
To that end, a TV ad for InstaBuy began a three-month run on CNN and Headline News in April. The campaign is aimed primarily at building the product’s visibility among online merchants, while fostering consumer awareness for the InstaBuy brand as well.
Other elements to CyberCash’s multimedia campaign include banner ads tied to the InfoSeek search engine, print ads in Interactive Weekly, and a direct-marketing piece specifically targeted at the top 400 online merchants. All that ties in closely to the company’s new slogan, “e-commerce. Simply.”
While the company continues
to add new merchants for its CashRegister service at the rate of about 900 a month, Yaro hopes to have upwards of 4,000 merchants sold on one-click shopping in time for the coming holiday season. “We’ll be packaging up InstaBuy for our new clients and remarketing it to the installed base,” he says.
CyberCash presently handles an average of more than 100,000 transactions a day through its CashRegister service. By Christmas, it expects to handle at least double that number, and perhaps just as many again on the InstaBuy side. “What we’re finding so far this year is merchant volume has not dropped off post-Christmas,” says Yaro.
As for Condon’s aggressive projection-that CyberCash, which trades on the Nasdaq, will turn a profit by 2000-time will only tell. “InstaBuy sounds really promising,” says Eviva Lighten, research director for payment systems with the Gartner Group, Stamford, Conn. “They may find some profitability with that product.”
But she warns that CyberCash still suffers from an industry image of having poor service. Noting that competitors such as CyberSource Corp., San Jose, Calif., and Internet Commerce Consulting, San Francisco, “have gone directly after their customers and won them over,” Lighten adds, “they have the lead, but they need to improve.”
Jim Condon concurs. “We need to work on better customer support and satisfaction,” he admits, noting that CyberCash is putting about 65% of its spending into “customer facing functions,” such as hiring more troubleshooters and beefing up management in customer service. (Perez points out that the company’s operating systems have been operating at efficiency levels exceeding 99% in recent months.)
Internet analyst Keenan’s research indicates that customer satisfaction seems to have improved in recent months-good news for CyberCash. “The e-commerce bubble could drive them toward profitability because their business model will certainly give them the ability to be profitable,” he adds. “Their existing customers are increasing their volumes, and they probably are gaining new customers even as you consider churn.”
Where it’s at
CyberCash has learned a lot from its earlier misfires. Four years ago, in what Yaro now refers to as the “prehistoric” era of electronic commerce, CyberCash introduced the first electronic wallets to a less-than-electric reception. “We distributed lots of wallets,” he recalls, “but we didn’t get them used.”
But this is a different CyberCash-a little older, and a whole lot wiser. The world of e-commerce doesn’t fit conventional two-dimensional models, Perez notes. It’s more like a gyroscope, he suggests, with “lots of things on the surface and other things moving counter to the real pillars of the technology.”
If you find the gyroscope analogy confusing, CyberCash wants to help. “To our [bricks-and-mortar] customers, we’re saying, We’re gonna help you bridge from the physical world to the virtual world,” says Perez. “We have the offerings to go with that. We’ll have InstaBuy and other products. We’re not just in the payments business anymore. E-commerce is where it’s at.”