Estimated reading time: 5 minutes
There are approximately 7 billion people in the world and only very few can describe themselves as an entrepreneur. And I understand, it is a risky concept since there is a lot of valuable resources that need to be invested: time, human and monetary. But once you have had that feeling of satisfaction, of how as a normal person you were able to transform an idea into a multi-national company, to provide new jobs and to have introduced a new technology that changes peoples lives, it is in that moment were you can evaluate that the return of investment is very satisfactory, even more so on your self-esteem.
Mark Zuckerberg success story is a clear example. A boy who didn’t even finish his college career so that he could develop his idea of a web application that would let classmates find out more about the social life of other students in Harvard. Eventually he convinced more investors and in a regular home environment with very few software programmers he was able to expand his application to other universities. Nowadays, Facebook, the name he gave to his application, is valued at approximately $40 billion with 1.4 billion users registered (basically around 20% of the global population has a Facebook account, even though it feels like 99%) and Mark became one of the youngest billionaires in the world.
Another example closer to our industry is Square Inc. For those of you who haven’t heard before about this company, practically they developed a system that can transform your smart phone or tablet into a mobile point of sale and can be used by any person or business with the necessity to charge a payment transaction. Besides the software, it currently includes a free magnetic stripe reader for credit card reading that connects to the jack port on your phone.
What is the purpose of Square?
Throughout the globe, three giants handle the vast majority of payment transactions: Visa, Mastercard and American Express. These companies are known to have become so wealthy that they directed all efforts at large chains and stores from which most of their revenue came from but they paid little to no attention to small business who avoided using POS systems in order to cut hardware costs, installation costs, tax declarations or just the financial commissions that such payment giants are used to charge. That’s why, many of these small or even medium sized establishments, only accept certain types of credit cards or manage all of their transactions purely in cash.
Obviously with the easiness and benefits that involves using your credit cards, including rewards, people nowadays are less accustomed to carry cash with them. Frustrated as a client of one of these establishments which only accepted bills and coins, that is when Jack Dorsey, who is Square’s Inc (and one of Twitter’s founders), decided to provide these giant corporations a solution: a very accessible and easy to use point of sale system that can serve as a liaison for these small businesses with a smaller commission that companies like Visa or AMEX are used too but just enough so that we can penetrate this mom and pop shop market. It was truly a winning idea, since these companies were not receiving a single income from these small shops and so by letting somebody else do all the “dirty” work and just sit down and let the cash flow in, it was definitely an attractive pitch.
Square in the USA has allowed most shops to grow thanks to the ability to attract more consumers without filtering them by their method of payment. From food trucks to delivery trucks, flower and fruit shops, they have all benefit from the idea to be able to close their sales more smoothly. These types of technologies can be called disruptive, basically because it is a new invention that generates a new market and eventually ends up changing the way people use to work. Even more so, this technology also forced other POS related vendors to view a future tendency clearly. Now they must develop new products compatible with this new mobile system like wireless receipt printers, tablet or smartphone stands and covers, wireless barcode scanners and now chip and even contactless card readers. Thus, market grows considerably for everyone.
In Latin America, even though this type of mobile solution has not been required or accepted as openly as Square, definitely it is an opportunity for the future as they adapt to technologies that are successful in their neighboring countries and because of two reasons: (1) you can find a lot (A LOT!) of cash transactions in Latin American countries and (2) every small mom and pop shop also want to grow their business. To be an entrepreneur not necessarily you have to invent something the world has never seen, you can imitate and adapt what has existed in other locations. In countries like Mexico, Colombia, Brazil and Chile, mostly because they are more up-to-date than other countries, you can already find the presence of similar companies to Square like iZettle. That’s why mobile POS will have sooner success starting in these places.
In the same way that we saw the tendency to use less cash every day, at this time you can also see people even avoiding credit cards. In a very digital world, where we pay more attention to where we leave our smartphone rather than our wallet, there is already a solution in existence, for example the Apple Pay system, in which you can authorize any payment with the simple use of your fingerprint reader in your iPhone. If you thought there was already too many ways to spend your money in a much capitalized system, think again. This will bring even more people to keep consuming and buying products. Companies like Facebook, who started as a webpage to know your relationship status, are currently even able to send and receive wire transfers from one account to another.
The future is full of opportunities and of new tendencies. This is the value of these entrepreneurs, they all start small with revolutionary ideas but only those who truly develop them, can convert their ideas into technologies that change the way people live.