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Things are not always what they seem
In addition, we are surrounded by famous labels that
typically sell above $15 a bottle, but we forget how critical
the "beverage wines" are to the wine industry. For example,
Gallo is positioning itself here as a premium winery,
but its Night Train Express and Thunderbird are highly
profitable. We take it for granted that the premium wines
carry the day for the wineries, but this is not so. Things are
not always what they seem.
Shake up in the payments biz
In the payments business, Visa Inc.'s traditional model
seems to be as permanent and immutable as a law of
physics. But, as Paula Rosenblum has pointed out in her
excellent www.retailwire.com articles, the industry is ripe
for disruption. Disruption occurs when there are new
technologies, new demands from seller or buyer, new
regulations, and crises of confidence.
Rosenblum has noted three causative factors in her
columns:
By Brandes Elitch 1. The Target Corp. data breach is a game changing
CrossCheck Inc. event for privacy and data breach security.
Consumers in particular are now focused for the
n the first quarter of 2014, the quote, "Things are first time on what can and cannot be trusted.
not always what they seem" from The Phaedrus by
Plato, seems to take on new meaning. Now we are 2. Retailers believe the prices they are paying for
I not so sure of things we used to take for granted. credit card processing are too high – this is what
Here in Sonoma County, we count on an abundant supply spawned the notion of MCX.
of water. It takes roughly five gallons of water to make a 3. All this noise about mobile payments is not
gallon of wine, and we typically get about thirty inches resonating with retailers, because consumers are
of rain a year. But right now we are in the middle of the not on board; the average person just doesn't see
worst drought in many years. the benefits of paying with a phone.
The wine industry creates nearly $60 billion in value for We routinely see new technologies designed to circumvent
the California economy and supports 330,000 jobs. We the existing payment platforms or pricing models, but we
know rising temperatures from climate change can do don't see much traction. Part of the reason is that consumers
great harm to our wine business, but we don't yet know have to be motivated to forego the benefits and reward
how to deal with it. miles from their current cards without sacrificing the
reliability and convenience that they have now. However,
Assumption check when consumers are unhappy, retailers think they are
Another thing we commonly agree upon is that some paying too much, and technology creates new products,
wines get better with age. However, local wine expert Dan disruption can and will occur. As an ISO who gets paid
Berger believes only 5 percent can predictably age well. To based on the traditional model of interchange, you might
a person knowledgeable about wine, this is about trading want to pay attention to these developments.
the fruitiness of a young wine for the complexity of an
older wine. It also depends on the quality of the original There has been much talk about Europay/MasterCard/
vintage, and of course, how it is stored – ideally at 55 to 60 Visa (EMV) chip cards, but the major issuers will take
degrees. Then there is gratuitous advice such as: "It's a big, a cautious approach to re-issuing hundreds of millions
bold wine," which really means, "It has 16 percent alcohol of mag-stripe cards. Merchants who take them are
and should have a "Flammable!" warning label, or "It's a going to need meaningful incentives. There are about 8
delicate wine," which really means, "It has no flavor at all." million card-accepting locations in the United States, and
Things are not always what they seem. these merchants are not happy about buying new EMV
equipment and training employees on a new system.
32
Things are not always what they seem
In addition, we are surrounded by famous labels that
typically sell above $15 a bottle, but we forget how critical
the "beverage wines" are to the wine industry. For example,
Gallo is positioning itself here as a premium winery,
but its Night Train Express and Thunderbird are highly
profitable. We take it for granted that the premium wines
carry the day for the wineries, but this is not so. Things are
not always what they seem.
Shake up in the payments biz
In the payments business, Visa Inc.'s traditional model
seems to be as permanent and immutable as a law of
physics. But, as Paula Rosenblum has pointed out in her
excellent www.retailwire.com articles, the industry is ripe
for disruption. Disruption occurs when there are new
technologies, new demands from seller or buyer, new
regulations, and crises of confidence.
Rosenblum has noted three causative factors in her
columns:
By Brandes Elitch 1. The Target Corp. data breach is a game changing
CrossCheck Inc. event for privacy and data breach security.
Consumers in particular are now focused for the
n the first quarter of 2014, the quote, "Things are first time on what can and cannot be trusted.
not always what they seem" from The Phaedrus by
Plato, seems to take on new meaning. Now we are 2. Retailers believe the prices they are paying for
I not so sure of things we used to take for granted. credit card processing are too high – this is what
Here in Sonoma County, we count on an abundant supply spawned the notion of MCX.
of water. It takes roughly five gallons of water to make a 3. All this noise about mobile payments is not
gallon of wine, and we typically get about thirty inches resonating with retailers, because consumers are
of rain a year. But right now we are in the middle of the not on board; the average person just doesn't see
worst drought in many years. the benefits of paying with a phone.
The wine industry creates nearly $60 billion in value for We routinely see new technologies designed to circumvent
the California economy and supports 330,000 jobs. We the existing payment platforms or pricing models, but we
know rising temperatures from climate change can do don't see much traction. Part of the reason is that consumers
great harm to our wine business, but we don't yet know have to be motivated to forego the benefits and reward
how to deal with it. miles from their current cards without sacrificing the
reliability and convenience that they have now. However,
Assumption check when consumers are unhappy, retailers think they are
Another thing we commonly agree upon is that some paying too much, and technology creates new products,
wines get better with age. However, local wine expert Dan disruption can and will occur. As an ISO who gets paid
Berger believes only 5 percent can predictably age well. To based on the traditional model of interchange, you might
a person knowledgeable about wine, this is about trading want to pay attention to these developments.
the fruitiness of a young wine for the complexity of an
older wine. It also depends on the quality of the original There has been much talk about Europay/MasterCard/
vintage, and of course, how it is stored – ideally at 55 to 60 Visa (EMV) chip cards, but the major issuers will take
degrees. Then there is gratuitous advice such as: "It's a big, a cautious approach to re-issuing hundreds of millions
bold wine," which really means, "It has 16 percent alcohol of mag-stripe cards. Merchants who take them are
and should have a "Flammable!" warning label, or "It's a going to need meaningful incentives. There are about 8
delicate wine," which really means, "It has no flavor at all." million card-accepting locations in the United States, and
Things are not always what they seem. these merchants are not happy about buying new EMV
equipment and training employees on a new system.
32
