What have music and money got to do with each other? Visa knows.
Visa just sent me a new white paper on the similarities of the
experiences of the music industry over the past decade or so and the lessons
that the industry teaches banks.
Here’s the brief overview:
Visa Europe is in the
data business. When a Visa payment
is made, all that is exchanged is data.
The twenty fifth of February 2013 was a watershed moment for
the global music business. It was the
day the International Federation of the Phonographic Industry (IFPI) reported
that global revenues from recorded music had returned to growth – for the first
time in 14 years.
The rise itself was modest (at just 0.3 per cent) and the
value of revenues was still 70 per cent below the 1999 peak, but the news was nonetheless
significant – indicating that the business may be coming to terms with the
shift to digital, and offering a shred of hope to other sectors facing similar
Of course, payments and music are very different businesses.
We are not rock stars. And the services we provide tend not to fire the emotions.
Even so, the changes in the music industry do resonate.
The liberation of payment data means that we operate across
a larger, more open ecosystem. It also opens up new opportunities to engage
much more closely with consumers and retailers. And these opportunities are
appealing, not just to incumbent payment businesses, but also potential partners
and would-be competitors. At the same
time, revenues are under pressure.
We may not be plagued by piracy (in fact, fraud levels are
close to a historic low, equating to just 0.04 per cent of all spending). But regulatory
intervention is putting pressure on current business models. And, as new
payment alternatives emerge, market pressure adds to the burden.
So, considering what’s happened in music, here are six big
lessons for payments:
1. Embrace the change
2. Innovate the business model
3. Understand what the customer really values
4. Make it easy and convenient
5. Create great partnerships
6. Recognise and build on core capabilities
If you want to download the whole paper, just click: “Lessons
from the music business: How to profit from next generation payments”