Unless you are a strong value creator for BOTH consumers and merchants, consider your payment start up destined to hit the rock.

Whether you are in the business of mobile wallets, loyalty, payments processing, card linked offers, social payments or alternate payments , make sure that you are creating value to both the segments.

The recent Venmo acquisition by Braintree   was indeed a smart move. There is only so much you can do to your core segment without increasing your value to the other segment.

While Square started with the focus on the merchants with the dongle, it had to quickly come up with the magical “Pay with Square” experience for the consumers. Google’s wallet (consumer) is supplemented with Google checkout(merchant). Amazon’s 1-click shopping (consumer) with Amazon checkout (merchant) is an other example.

I look at it as a growing spiral involving different aspects of the merchants and consumers needs addressing different types.  In the context of the law of diffusion of innovation, you could look at it this way:

Navigating the Merchant-Consumer spiral

Unless you find the 100th monkey in both these segments, you are not out of woods.

Stripe, Intuit, Groupon – what’s your consumer market strategy?