Good Week for the Olympics (But Not For Everyone There)

Good Week for the Olympics (But Not For Everyone There)
London Olympics are in full swing, and so far it’s been a tremendous success. I thought the opening ceremony was absolutely breathtaking – it was creative, ambitious, beautiful and yet so different from everything else we’ve seen. After Beijing, most people said it would be difficult to surpass the sheer scale and grandeur of that opening ceremony. London organisers knew it and so they didn’t even try it, starting instead with peaceful images of rural England and running through the rich history of Britain, from industrial to digital revolution. There were plenty of worries before the Games that the infrastructure (e.g. transport system, security) would struggle to cope with the influx of athletes, spectators and officials. Many firms asked their employees to work from home (most of us at Celent already do anyway). However, the concerns so far proved to be overestimated and London has been running smoothly. The sport itself continues to thrill, offering a full scale of emotions from pride and joy for the medal winners to drama (e.g. competitors “ganging up” against Mark Cavendish, a favourite to win a cycling race) to shame (e.g. badminton players getting disqualified for deliberately losing matches). It’s also inspiring a new generation of future athletes – my own children (almost 5yrs and 2.5yrs) are wowed by almost everything they’ve seen on TV, from the equestrian events to diving, swimming and basketball. I also heard a kid on the radio saying that he would like to compete in the future Olympic cycling, “you know, the one with bikes, not the one where you sort out the rubbish into different bins”, he added helpfully 🙂 However, not everyone associated with the Olympics enjoyed the last week. The decision to make Visa the only accepted payments brand at the Olympics, continued to attract criticism. The Times, one of the largest newspapers wrote: “The sponsors, of course, are highly visible in the park and the one that emerges as early favourite for the gold medal in mean-spirited pettiness is the payments company Visa. Every commercial outlet and even every cash dispenser bears a sign saying it is “proud to accept only Visa”. They may be proud; everyone else will be annoyed.” That decision was really put to test when card payments failed at one of the events at a Wembley stadium and people could only pay cash (so much for the “cashless Olympics”!) It doesn’t necessarily mean that the failure had anything to do with the Visa network; in fact, Visa blamed “Wembley management”, but the incident clearly did not help the Visa’s brand. There were more bad news from Visa in Europe, when the EC commission had another go at Visa Europe and its credit card interchange fees. Encouraged by the court’s recent decision over MasterCard’s fees, the EC clearly feels the time is right to re-open its ongoing battle with Visa. At Celent we have long questioned the wisdom of regulators to keep pushing against the interchange fees in various markets. It looks like the lawyers and lobbyists at the schemes will continue to be busy.

Payments and the London Olympics

Payments and the London Olympics
It’s less than two weeks until the opening ceremony of the Olympic Games. The Olympic spirit is already in the air in London with all sort of preparations entering their final stages. A section of M4, a major motorway connecting the West of the UK with London was closed for a few days last week causing havoc – all to make sure it can cope with the increased traffic from Heathrow. No doubt, London will be ready to welcome thousands of athletes and guests that will be arriving from next week. If only the weather would be more welcoming as it’s been a terrible summer so far – chilly, rainy and windy… There has been an increased interest from our clients and press in the Olympics-related payments topics as well. Is Visa right in monopolising payments for the Olympics? Will all those who receive Samsung Galaxy S III NFC phones to try out new NFC payments be aware of the potential security risks? And why were the ambitious plans to upgrade the London transport infrastructure to accept NFC delayed? Indeed, as a worldwide sponsor of the Olympics, Visa is investing heavily in payment innovations, such as NFC and contactless and promoting its brand. The Olympic tickets could be paid for only with a Visa card – not that big of a deal in the UK, as most UK debit cards are now issued under Visa brand, but I imagine, a bit of a nuissance for those in other countries who may not have a Visa card. Most recently, the press reported Visa requesting that the existing ATMs in the Olympic Village, which would have accepted all Link cards, were switched off and replaced with eight new machines which would only accept Visa cards. While no one disputes Visa’s right to certain privileges as a major sponsor, it is arguably not the most elegant way to endear your brand to the users. Also, Visa and Samsung, another worldwide Olympics sponsor, have started distributing 1,000 Samsung Galaxy S III NFC phones with a Visa payments app to key stakeholders and decision makers for use during the Olympics. All POS terminals at the Games will be able to accept Visa PayWave contactless payments and the distribution of phones is expected to help promote wider adoption of NFC and contactless services. Those with a chance to try out the new app are reporting favourable first impressions. However, there was also a lot of buzz around a recent blog from McAfee, a security software firm, which (perhaps not that surprisingly) warned about the potential security risks, particularly if the hackers used the so-called “fuzzing” technique. My personal view is that while these risks are real, the organisers are busy making sure they address much bigger and more immediate security concerns around the Olympics. It’s only natural that many people will find their own relevant angle to the Olympics. However, I am sure London 2012 will not be remembered for what it did or did not do for payments. Lets hope it is remembered for all the right reasons – sportsmanship, passion, spectacle and lasting legacy. Let the games begin and lets enjoy them!