7 failed payment ideas from successful companies

December 16, 2016 11:27 AM

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The path to success is almost never smooth, and many well-known companies have made expensive mistakes along the way. Here are some of the ideas that are no longer around but may never be forgotten.

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The path to success is almost never smooth, and many well-known companies have made expensive mistakes along the way. Here are some of the ideas that are no longer around but may never be forgotten.

An employee scans a quick response (QR) code displayed on the Ant Financial Services Group's Alipay app, an affiliate of Alibaba Group Holding Ltd., inside a Sa Sa International Holdings Ltd. store in an arranged photograph in Hong Kong, China, on Tuesday, Nov. 1, 2016. The urgency to prepare regulatory environments for fintech is growing as banks begin offering digital services such as biometric authentication and as mobile-payment systems such as Apple Pay and AliPay are introduced around the region. Photographer: Anthony Kwan/Bloomberg

Anthony Kwan/Bloomberg

Alipay Circles

When Alipay added a social networking element to its payment service this year, it likely didn't expect headlines like "

New Update Turns Chinese App Alipay Into Soft Porn & Prostitution Hub

," but that's what happened. The company quickly reversed course, but its example shows just how risky it is for payment companies to

dabble in social media

.

A sign for the launch of the Apple pay system, from Apple.Inc is seen displayed at the entrance to a McDonald's Corp. restaurant in London, U.K., on Tuesday, July 14, 2015. Apple Inc. is making the U.K. the first market outside the U.S. for its digital-wallet system as the company fights for a place in the electronic-payments industry. Photographer: Chris Ratcliffe/Bloomberg

Chris Ratcliffe/Bloomberg

Blocking Apple Pay

Prior to the launch of Apple Pay, Android Pay and Samsung Pay, the there was a mega-retailer venture called The Merchant Customer Exchange that asked its merchants to commit to its own mobile wallet exclusively. But when those rival wallets started rolling out — and the MCX's CurrentC wallet remained stalled in the pilot phase — the agreement became more of a hindrance than a business coup. Ultimately the exclusivity period expired, allowing major MCX merchants like Best Buy and Rite Aid to start accepting Apple Pay and other mobile wallets.

Wolfe, Daniel

Weird mascot

There's no question that AT&T, Verizon and T-Mobile have built very successful businesses in the mobile phone arena, but their expertise did not translate well into mobile payments. The companies could be forgiven for their poor choice in naming their mobile wallet ISIS before the militant group rose to prominence. But as part of their rebranding effort, the companies enlisted a puppet named "Tappy" that was designed after a generic NFC payment terminal — as well as a conspicuously nonverbal performance by the normally loudmouthed wrestling superstar Rowdy Roddy Piper.

A student is reflected in the window of an Amazon.com Inc. kiosk on the University of California, Berkeley campus in Berkeley, California, U.S., on Wednesday, Oct. 12, 2016. By the end of the year, Amazon will have staffed pickup kiosks serving more than 500,000 college students at 16 schools around the country. Students order items from Amazon.com Inc. and retrieve them from new pickup lockers. Photographer: David Paul Morris/Bloomberg

David Paul Morris/Bloomberg

Amazon at the register

Seeking to bring its e-commerce expertise into the real world, Amazon released a mobile card reader called Local Register in mid-2014. Its aggressive pricing undercut Square's fees, but the product had little else going for it. Amazon's merchants immediately complained that the product's shortcomings did not make up for its reduced cost. Little over a year after Local Register's launch, Amazon announced it would stop selling its device.

A woman look at an Apple Inc. iPhone 7 Plus at a SoftBank Group Corp. store in Tokyo, Japan, on Friday, Sept. 16, 2016. Apple hopes its new iPhone 7 will help to stem a two-quarter decline in iPhone sales by enticing users to upgrade to the 7's faster processor and expanded memory options. Photographer: Yuya Shino/Bloomberg

Yuya Shino/Bloomberg

Overpowered in-app purchases

Apple wanted to make it easy for iPhone users to purchase digital items in games, so it allowed a single login to serve as authentication for subsequent purchases. This became problematic when parents handed the free Smurfs' Village game to their kids, not realizing that their kids could then spend up to $99.99 on batches of digital "Smurfberries" without having to enter an Apple password for a short amount of time. Apple

fixed this security flaw

in 2011, and agreed to refund about $32 million to consumers in a

2014 settlement

with the Federal Trade Commission.

The Google Inc. Mobile Wallet application for cardless payment is displayed on a smartphone screen at the Mobile World Congress in Barcelona, Spain, on Wednesday, Feb. 29, 2012. The Mobile World Congress, operated by the GSMA, expects 60,000 visitors and 1400 companies to attend the four-day technology industry event which runs Feb. 27 through March 1. Photographer: Chris Ratcliffe/Bloomberg

Chris Ratcliffe/Bloomberg

Google Wallet 1.0

The original Google Wallet expected that banks would jump through hoops to add their brands to Google's payment app. Only one issuer (Citigroup) agreed to go through its enrollment process to access smartphones' secure element, but even then most carriers would not allow Google to have that level of access on their phones. A year later, Google retooled the process to work through software, and the company ultimately scrapped its original idea in favor of the more streamlined Android Pay.

JPMorgan Chase & Co. bank signage is displayed outside a branch in New York, U.S., on Monday, July 11, 2016. JPMorgan Chase & Co. is scheduled to release earnings figures on July 14. Photographer: Eric Thayer/Bloomberg

Eric Thayer/Bloomberg

Chase 'blink'

When contactless cards began their rollout in the U.S. a decade ago, JPMorgan Chase rushed to put its own branding at the forefront. The issuer's "blink" label was arguably more prominent than the card networks' own branding, but few consumers warmed to the technology. In 2011, Chase dropped the brand, and like many banks it began shifting its focus to supporting the same technology for mobile payments.