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February 28 2013

Commerce Weekly: Visa pursues NFC mobile payments

Visa looks to kick-start NFC

Visa is taking aim at the NFC mobile payment holy grail. On Friday, the company announced the Visa Ready Partner Program. Leena Rao reports at TechCrunch that the initiative “aims to help mobile device manufacturers, technology partners, mobile network operators, and others gain access to Visa IP, licenses and more,” and that Visa “will make APIs and SDKs available to allow mobile point of sale providers to connect to Visa via payments gateways CyberSource and Authorize.Net.”

Rao says the program will serve as a resource for developers and provide a way for financial institutions and retailers to adopt mobile payments solutions. One of the initial program partners announced is Samsung. Ina Fried reports at All Things Digital that per the agreement, future NFC-enabled Samsung phones “will come with Visa’s [PayWave mobile] applet and pre-certified to work with its payment system.” Fried also reports that Visa mobile chief Bill Gadja said that they’re aiming to “turn upstarts into potential allies rather than rivals” with the program.

Marguerite Reardon reports at CNET that while the program may well help kick-start NFC-enabled payments around the world, it may hit a snag in the U.S. She writes:

“Since wireless carriers in the U.S. still have a say in what features are available on devices and which aren’t, there’s a chance that the Visa PayWave technology may only be available on Samsung devices sold internationally and not on most Samsung smartphones sold in the U.S.”

Reardon uses Google Wallet’s uphill battle as an example of potential obstacles Visa may face, noting that “the three major U.S. operators that have already blocked Google Wallet are investors in a joint venture called ISIS, which is building its own NFC-based mobile wallet.” You can read her full report at CNET.

PayPal Here crosses The Pond

PayPal unveiled a version of its PayPal Here mobile payment device that will launch in the U.K. this summer, with other European countries to follow. Rebecca Grant notes at VentureBeat that “PayPal already has a large presence in the U.K. and seeks to capitalize on its existing network as well as name recognition.”

The biggest obstacle PayPal faced in designing the European version of PayPal Here was the complex Chip and PIN system used throughout Europe, technology that Marcus Wohlsen at Wired says “crushes anything available stateside.” Wohlsen explains that the chips in the Chip and PIN cards are more difficult for thieves to copy than the magnetic stripes we have here in the U.S.

Rick Oglesby, a payments industry expert at Aite Group, told Alistair Barr at Reuters that “[t]rying to figure out how to make Chip and PIN work in these devices has been hard” and that the devices thus far have been expensive and “clunky.” Barr also reports that PayPal will charge merchants a “nominal fee” for the European PayPal Here device and that it will charge a per-transaction fee similar to that in the U.S.

Study measures the showrooming effect

Location analytics company Placed released a new study this week, “Aisle to Amazon: How Amazon is impacting brick-and-mortar retailers,” that identifies the retailers that are most at risk from consumers showrooming and then buying from Amazon.

Devindra Hardawar reports at VentureBeat that the study coupled data from nearly one billion location data points measured in January with 14,925 surveyed respondents. The results showed the stores most at risk were Bed Bath & Beyond, PetSmart, Toys “R” Us, Best Buy, Sears, and Barnes & Noble. Hardawar notes that online price matching programs have been launched by Best Buy and Target and says “Placed’s study shows that plenty of other retailers will need to follow in their footsteps.”

In related news, DataPop CEO and co-founder Jason Lehmbeck looked at Google’s recent acquisition of Channel Intelligence and its integration of Google Shopping results into its core search engine in a guest post at GigaOm. Lehmbeck says that Google not only is aiming to “eat Amazon’s lunch” but is also “making a play for all retail” and that “every retailer should be worried about the implications” of Google’s recent actions. He notes that it’s not too late for retailers to position themselves to compete and offers a few strategies marketers can employ to fend off Google’s advances.

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October 25 2012

Commerce Weekly: Square’s big moves

Here are a few stories that caught my attention in the commerce space this week.

Square gets international, plans major growth; PayPal Here hits retail

Square made a couple of big move announcements this week. First, the company literally will move to a new office space in the Central Market area of San Francisco by mid-2013, according to a report by Leena Rao at TechCrunch. Rao notes that the company has grown to more than 400 employees and reports Square plans to expand its staff to almost 1,000 people before the end of 2013.

Square also announced this week that its service is now available in Canada, at the same 2.75% rate it charges in the U.S., according to a report by Ingrid Lunden at TechCrunch. Lunden reports one of the obstacles for Square in Canadian as well as European markets is that its dongle depends on the magnetic stripe on the backs of credit cards; many credit card processes in these markets use a chip-and-pin system instead.

The obstacle isn’t insurmountable, however, as Lunden notes, Square’s partnership with Starbucks to incorporate its Pay With Square app service as a mode of payment might pave the way forward with retailers in other markets, making the card processing format irrelevant.

Square competitor PayPal Here was on the move this week as well — into retail shopping. Rao reports in a separate post at TechCrunch that PayPal CEO John Donahoe announced a U.S. retail deal with AT&T during eBay’s earning call this week. PayPal Here previously had a retail presence only in Japan with Softbank. Rao reports that Here will retail for $15, with the purchaser receiving a $15 discount upon signing up; Square is sold in 20,000 outlets in the U.S. and sells for $10, with a $10 purchaser sign-up discount, Rao reports.

Let the mobile payment testing begin

The long-awaited Isis mobile wallet began testing this week in Austin and Salt Lake City markets. Stephanie Mlot reports at PC Magazine that compatible phones at launch include Samsung Galaxy S III, Galaxy S Relay 4G, and Galaxy S II on T-Mobile; the HTC Droid Incredible 4G LTE on Verizon, with Motorola Droid Razr HD and Droid Razr Maxx HD support coming yet this week; and the Samsung Galaxy S III, the HTC One X, the Samsung Exhilarate, the LG Escape, and the Samsung Galaxy Rugby Pro on AT&T.

Mlot also reports that T-Mobile customers can get $10 in Isis eCash if they visit a brick-and-mortar location and activate the application. At launch, Isis works with Chase, Capitol One, Barclaycard, American Express, Visa, Mastercard and Discover credit cards.

As to Isis’ success, a report at Consumer Reports says services like Isis are solving “a non-existent problem” and concludes: “Isis, like Google Wallet, still seems to require a lot of work and needless complexity for the questionable convenience of paying by cell phone.”

Apple also announced this week that it too soon would be testing a mobile payment solution in a limited market — its own retail stores. Mark Gurman reports at 9to5Mac that Apple is preparing to update its point of sale system to scan Apple Store payment card codes through Passbook. The payment system update could be ready as early as the end of this month. Jordan Golson writes at MacRumors that though it’s not confirmed, it’s possible in-store customers also will be able to pay for any merchandise using their iTunes account information; thus far, only select accessories have been available for purchase through Apple’s EasyPay self-checkout system.

Google Wallet on the iPhone?

Business Insider’s Owen Thomas was paying close attention this week, noting the “The next version of Google Wallet, coming soon” statement at the top of Google’s Wallet homepage, with an option for visitors to request an invite. Thomas reports that when he requested the invite, he was prompted to select the type of device he uses: iPhone, Android, or “other.”

Ryan Kim at GigaOm agrees with Thomas’ assertion that this likely suggests Google is looking to expand its purview beyond Android phones and into iPhones and “others,” but notes it really could mean anything. Kim writes:

“It could mean that Google may be pursuing a more cloud-based approach to payments that doesn’t require NFC for transactions. Or Google Wallet could integrate with Apple’s Passbook or evolve to support QR codes or 2D barcodes, which is how Starbucks and Dunkin Donuts handle mobile payments. Or it could just mean Google wants to know how many iPhone users are interested in Google Wallet.”

You can sign up for an invite here.

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