Wall Street Journal reports that the once promising Groupon has failed to live up to its hype and now has investors pulling out. After losing at least four of its pre-public backers, “…Groupon has shed more than three-quarters of its stock-market value, or about $10 billion.” These findings confirm speculation in PaymentSolutionsBlog.com‘s continued discussion on Mobile Wallets.
In our most recent post, Who stands to lose most from the success of mobile payment systems? , CoreCard’s Manish Gupta wrote the following :
Which players will emerge as winners after the early shake out phase is anybody’s guess. But I believe that the biggest losers will be the daily deal companies such as Groupon (stock already at an all-time low) and Living Social.
This new breed of payment systems has been conceived in post Facebook, Twitter, FourSquare, Groupon era. They understand the inherent value in connecting people (merchants and customers) and utilizing the power (apps, location, alerts, social networks and all time connectivity) of the phones they carry. If observed closely most mobile payment systems (if not all) are attempting to enable two things: 1) providing merchants an ability to accept payments without the use of clunky and costly infrastructure and 2) giving consumers an app which can be used to find merchants and deals, make payments and redeem promotional offers…In doing so, they will obviate the need for the daily deal sites and apps provided by the likes of Groupon and Living Social, whose value in generating profits for merchants is already in question. So, in my humble opinion the success of mobile payment platforms (whichever ones prevail) will be the last nail in the coffin of already ailing daily deal businesses.