Nostrums for rostrums

IN 1949 Frank McNamara, an executive at a struggling finance company, had the idea of a charge card to settle the tab at high-class eateries. First, he had to solve a tricky problem. Restaurants would not accept a charge card as payment unless customers wanted to use one; and diners would not carry a card unless restaurants accepted it. His solution was to give away his card to a few hundred well-heeled New Yorkers: once the elite of Manhattan’s gourmands were signed up, he could persuade a few upscale restaurants to accept his new charge card and also to pay him a commission. Within a year, the Diners Club card was accepted in hundreds of places and carried by over 40,000 people.The Diners Club may not seem to have much in common with digital giants like Facebook, Google, Uber and Amazon. But such businesses are all examples of “platforms”: they act as matchmakers between various entities and they typically charge different prices to different actors in the market. Google connects websites, consumers and advertisers, who foot the bill. Facebook does something similar for its members. Uber matches passengers and drivers, who pay the ride-hailing app a slice of the fare. Amazon brings together shoppers with retailers, who pay a fee.