People of a certain age likely remember the battle between VHS and Betamax. These were the first two affordable in-home video tape systems, and they were completely different formats, incompatible with each other. Sony’s Betamax hit the market in 1975, but the company had previewed the product to other manufacturers the previous year. The company hoped that the other manufacturers would back their Betamax format, thus enabling competitors to develop and market compatible products to the marketplace.
Instead, JVC developed a competing format, VHS (Video Home System)—and the home video recorder format war began. The competing platforms battled on the retail cost of the systems and on recording time. JVC licensed the technology to other manufacturers, while Sony was the sole manufacturer of Betamax until the late 1980s. Sony went from owning 100% of the market share in 1975 to just 25% of the U.S. consumer home market.
What does that history have to do with the quickly evolving world of mobile payments? In “Mobile Pay Not Yet Ready for Prime Time,” Boston Globe’s Scott Kirsner writes, “We’ve got smartphone apps and accompanying devices [for mobile payments] that work at one retail chain or a bunch—but nothing yet that’s universal.” Given that, the market is poised for another potential platform battle.