In life there are few shortcuts — and on occasion when a difficulty is encountered on the map there is no way to go over or under or around. The only way to go is directly through, jumping hurdles as they pop up along the path. That reality was on display in payments and commerce this week as Apple attempted a reset in its leadership team, Etsy had to calm a legion of underpaid sellers and Lyft managed to pull out and toward the IPO finish line early in the race in 2019. Apple New Leadership Groove As Apple’s most recent earnings reports sharply demonstrated, iPhone sales aren’t quite what they used to be, and Apple is reorienting its future accordingly around its services and full ecosystem offerings to offset shifting smartphone ownership trends. The most recent iteration of those changes came into view this week with the news that Apple is redirecting its leadership ranks and realigning its priorities around a greater focus on services, artificial intelligence, hardware and retail. The changes, according to reports, have been on the drawing board since last year — and have included some high-profile hires as well as some high-profile departures, including Apple’s Head of Retail Angela Ahrendts, whose exit was announced last week. Apple has also moved to put projects on hold to give the new managers a chance to refocus priorities, according to people familiar with the matter. “This is a sign the company is trying to get the formula right for the next decade,” said Gene Munster, a longtime Apple analyst and managing partner at venture capital firm Loup Ventures. “Technology is evolving, and they need to continue to tweak their structure to be sure they’re on the right curve.” Given slowing iPhone sales and increased competition in markets like China, Apple’s move toward diversification is a rational play — though perhaps not an easy one. As Apple eyes the media market, it already has formidable competitors, including Netflix and Spotify, which have more subscribers and the early mover advantage. Google’s self-driving vehicles have logged more miles on the road than Apple’s have, while Amazon’s Echo speaker and voice-activated assistant Alexa and Google’s Home Assistant have long since overtaken Siri in terms of capabilities and reach. Apple, however, points to the health of its ecosystem — particularly its services business. Home to Apple Pay, streaming music and the App Store, the services portion of the business is expected to surpass $50 billion by Apple’s fiscal year 2020 and to account for more than 60 percent of total revenue growth for the company over the course of the next five years. Will it be enough to offset a slowing iPhone that is 60 percent of Apple’s revenue — and the flywheel of its entire ecosystem? Stay tuned … Etsy’s Payments Mishap The good news is they weren’t hacked. In fact that was the best news Etsy could offer a legion of put out sellers who saw large sums of money removed from their seller accounts for no reason they could understand. Complaints about the problem started emerging in Etsy‘s community forums and on Twitter, when the sellers started seeing amounts from hundreds of dollars to tens of thousands of dollars either being taken out of their accounts or charged to their accounts. In its forum, an Etsy representative reportedly posted a statement saying the company was “aware of a bill payment error affecting a small group of sellers which resulted in some cards being incorrectly charged.” Etsy two days later offered a fuller explanation of the issue, saying it had already issued refunds to the incorrectly charged cards with plans to send funds to bank accounts within 48 hours. Etsy further had to warn sellers they might have to wait a few days to get their money back as funds would have to clear and settle. “For affected sellers, we are very sorry for the trouble or concern this may have caused,” wrote the company. “Our first priority has been to correct the issue. This was not a fraud issue, but instead, an error related to a site change which affects a small group of sellers and is unrelated to buyers’ purchases. “This is an issue we do not take lightly,” the statement continued. “We’ve assembled a payments task force, including senior executives across Etsy, to address any concerns or troubles resulting from this error. We will refund any undue fees associated with this incorrect charge and change in deposit schedule. We don’t expect this error to impact additional sellers going forward.” The issue for sellers was further complicated by the fact that the payments error took place on a Friday going into a holiday weekend — meaning closed banks on Monday further slowed refunds. Lyft Speeds Toward An IPO It looks like Lyft will be the first big name in U.S. ridesharing to make it to an initial public offering (IPO) this year, with reports emerging that Lyft has filed to list shares on the Nasdaq exchange at the end of March. The move follows Lyft’s late 2018 submission of paperwork for an IPO to the Securities and Exchange Commission (SEC). The actual IPO filing is expected later this week. The roadshow for investors is reportedly happening in the middle part of March. The Nasdaq listing is significant because Nasdaq competes with the New York Stock Exchange (NYSE) to snag important and notable technology companies, and it wants to be the exchange that gets the better ones. The NYSE was home to a few notable listings in 2017, however, including Spotify and Snap. Analysts expect many more high-profile companies to go public in 2019. For Lyft the most important other IPO this year however, will be Uber’s, as the rival ridesharing firm is planning an IPO for this year. Uber is expected to go public in the first half of 2019, having filed paperwork with the SEC at the end of December. It is believed that when the ride-hailing company goes public this year, it will have a valuation of a little less than $90 billion. Lyft by contrast, was last valued at around $15 billion. According to reports, it is seeking a $25 billion valuation for its initial public offering. We’ll let you know if it gets there. What did we learn this week? Forward is the only direction available in payments and commerce, whether the issue is resetting the core business, refunding payments to angry vendors or pushing to get an IPO done while the year is still young.


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