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October 18 2012

Commerce Weekly: Targeting Amazon

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

Strategic maneuvers aimed at Amazon

Best Buy LogoBest Buy LogoRetail competition against Amazon is starting to heat up coming into the holiday shopping season. On the heels of Wal-Mart’s recent moves to square off against Amazon, two other big box brick-and-mortar retailers have announced strategies targeting the Internet retail giant.

Ann Zimmerman reports at The Wall Street Journal that Best Buy not only will price match with Amazon this holiday season, but will also offer free delivery for products that are out of stock. Target has its sights set against Amazon as well. In a report on Target’s planned holiday strategy, Natalie Zmuda at AgeAge notes that tactics include “a price-match guarantee against a group of competitors that includes popular online retailers such as Amazon.” Target also is using QR codes in its holiday campaign to combat “showrooming” on the top 20 selling toys.

In somewhat related news, the US Post Office also is making moves into the e-commerce market. Victoria Stilwell reports at Bloomberg that starting in November, the US Post Office will begin testing its same-day delivery program, called Metro Post, in the San Francisco market. The service is aimed at local physical retailers, which could in turn give them a leg up against Internet retailers like Amazon. Stilwell reports that to participate in the Metro Post test, retailers need 10 or more physical locations throughout the US, with one or more within the test market boundaries.

Square exits taxis

New York City’s Taxi & Limousine Commission (TLC) spokesman Allan Fromberg this week unequivocally dismissed rumors from last week that Square was negotiating an official partnership with TLC, alongside news that Square has ended its pilot payment program with the TLC.

Garett Sloane at The New York Post reports that a letter (PDF) sent by Square’s general counsel Dana Wagner to the TLC on Friday “indicated that [Square] needed to overhaul its payment system in light of new rules the commission is drafting to govern credit-card payments in cabs.” Wagner writes in the letter:

“Square has determined, in light of developments in prospective taxicab regulations in New York and other markets, and based on what we have learned conducting the Pilot Program to date, that we wish to pursue a different hardware and software solution for our TPEP [taxicab passenger enhancement project] offering. It would be commercially unreasonable for Square to pursue a new hardware and software solution for a future TPEP offering while at the same time continue to support the software and hardware solution we rolled out in the Pilot Program.”

Ryan Kim at GigaOm says it’s likely that Square will continue working on a taxi-payment product, quoting Wagner’s letter: “… Square looks forward to further improving our product and making commerce and transportation easier for millions of riders and drives in New York and around the country.”

In other Square news, company CEO Jack Dorsey announced that Square would no longer refer to its customers as “users” and appealed to others in the technology industry to follow suit. He writes in a blog post: “The word customer, given its history, immediately sets a high bar on the level of service we must provide, or risk losing their attention or business.” His post includes a letter he sent to his team that explained: “We don’t have users, we have customers we earn. They deserve our utmost respect, focus, and service.”

Isis is gearing up for launch

Google Wallet competitor Isis is finally gearing up to launch its wallet, after a series of delays this summer. The company confirmed it would officially launch in the Austin, Texas and Salt Lake City, Utah markets October 22.

Nathan Olivarez-Giles reports at Wired that the Isis mobile app has shown up in Google Play, but notes that the Wired team had yet to find a compatible phone. Isis head of marketing Jaymee Johnson told Olivarez-Giles, “By year end, as many as 20 Isis-ready handsets are expected to be in market …We look forward to sharing more details on Oct. 22.” Those details likely will include partnering retailers as well. Isis announced partners in May, but as Olivarez-Giles notes, it’s not yet clear which ones will be part of the initial launch.

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October 11 2012

Commerce Weekly: Will NYC taxis get Square?

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

Square may be courting cabs

Square not only is gearing up to launch in Starbucks stores in November — it may also be looking to enter the New York City taxi cab market. Ryan Mac reports at Forbes this week that negotiations may be underway:

“Late Monday, private company expert PrivCo said that the San Francisco-based startup and the city of New York will be announcing an official partnership with the city of New York to implement Square’s payment systems across the city’s cabs. If negotiations are completed as expected, said New York City-based PrivCo, the partnership may be announced as early as this month.”

Mac reports that neither Square nor New York City’s Taxi & Limousine Commission (TLC) would confirm that a deal was in place, but he notes Square has been testing iPad credit card swipers with TLC since March.

As to its forthcoming foray into Starbucks, Lisa Baertlein at Reuters reports that further innovations are in the works even ahead of the launch. At launch, customers will be able to pay for a coffee by having a barcode scanned off a smartphone, but plans are already in the works to use Square’s GPS to identify a customer in a Starbucks location, who can then pay by giving his or her name to the cashier. Also, Cliff Burrows, president of Starbucks’ Americas region, told Baertlein that by summer 2013, customers will have the option and ability to tip using the technology.

Wal-Mart chases immediate gratification, further targeting Amazon

In recent months, Wal-Mart has been positioning itself to square off against Amazon: It announced it would discontinue its sales of Kindle devices, the gateway to Amazon’s retail ecosystem; it amped up its search engine; and it began testing mobile in-store checkout. Now, Wal-Mart again stepped up its competition strategy against Amazon and is testing same-day delivery. Jessica Wohl reports at Reuters:

“The test of the ‘Walmart To Go’ service began in Northern Virginia and Philadelphia earlier this month and is set to expand to Minneapolis on Tuesday, Walmart U.S. said. Walmart then plans to expand the test to California’s San Jose/San Francisco market in late October or early November.”

Wohl says there is a flat $10 fee for same-day delivery of general merchandise that is carried in the customer’s local store, with no limit to the number of items. The test will be limited to just the four markets during the holiday season, but as Wohl noted, the move is targeted not only at Amazon, but also at Target: Minneapolis happens to be Target’s hometown. Amazon has tested same-day delivery in the past, and it may be positioning itself for larger scale same-day capabilities.

The mobile payment war, major player edition

Kit Eaton at Fast Company took a look this week at the ongoing war to control mobile payments, focusing on the four major players who have the heft to effect real change: Google, Apple, Amazon, and Facebook.

Taking one company at a time, Eaton highlights each player’s advantages and innovations being brought to the table. Google, for instance, started tinkering with online micropayments last week, launching its Google Wallet for web content. Being touted as an “experiment,” the Internet giant is attempting to mainstream a pay-for-content model, wherein users pay for individual articles and web pages. Eaton writes, “It’s essentially Google enabling a micropayment paywall for online content providers, with a frictionless payments for users.”

In the Apple arena, Eaton focused on Passbook, which isn’t a mobile payments solution … yet. Eaton says Passbook may have the initial, basic wallet capabilities and the audience reach to serve as the gateway drug for mobile payments, easing consumers through the culture shock. He writes:

“But as soon as Apple gets everyone comfortable with using your iPhone like this — including passing it under a barcode scanner when you buy your venti Chai Tea Latte, for example — it’s not too much of a leap to imagine Passbook 2.0 offering a popup that says something along the lines of: ‘Would you like to pay for this now?’ And with a single tap — you’ve got a mobile payments system running on iOS.”

Eaton also looks at Facebook, which is perhaps one of the less obvious mobile payments space competitors, “[b]ut its decision to enable in-app frictionless payments via carrier billing hints at a different future,” he says. Amazon, too, isn’t an obvious contender, but Eaton points to rumors of an Amazon payments product to compete with Square. Eaton also reminds us of Amazon’s vast interconnected ecosystem: “If Amazon enabled mobile payments via an own-brand smartphone or its app, it would be able to leverage its hundreds of millions of registered customer credit details in the same way Apple could do with iTunes.” His post is well worth the read.

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October 04 2012

Commerce Weekly: More brands throw in with Merchant Customer Exchange

Here are the commerce stories that caught my eye this week.

MCX’s mobile payment vision draws in more big names

The Merchant Customer Exchange (MCX) got a boost this week as several more big brands joined the mobile payments network. Nivedita Bhattacharjee reports at Reuters that the new members include Gap, Bed Bath & Beyond, Dillard’s and Dunkin’ Brands, bringing the total to 21 publicly traded members to date.

James Wester at Mobile Payments Today notes that a merchants mobile payment solution doesn’t yet exist and no launch date has been announced. Wester reports:

“MCX said its platform is under development and the company is trying to focus on integrating payments with offers and promotions delivered to a smartphone. But a source familiar with MCX’s effort said the consortium is still working through an RFP process to find technology vendors to help bring its solution to market.”

Wester says MCX officials described the vision for the payment solution as including discounts and promotions, and requiring little involvement from merchants in terms of equipment and technology investments. The platform also reportedly will “take a ‘hands-off’ approach to retailer’s transaction and customer data,” which is a major factor in some retailers choosing MCX over other payment options, such as Google Wallet. Mike Cook, vice president and assistant treasurer at Wal-Mart, one of the MCX partners, made it clear this week that Wal-Mart is not interested in sharing consumer and transaction data and that that played a role in the company choosing to back MCX over Google or Isis.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

Lemon opens its API, but is it aiming at Passbook?

Mobile wallet startup Lemon stepped up its game in the mobile payment arena this week, launching its developer platform “Lemonade,” or “Lemon Application Development Engine.” Sarah Perez reports at TechCrunch that third-party developers now will be able to create branded interactive “smart cards” to better connect with consumers. She writes:

“Using the SmartCard Wizard, developers can customize their cards in terms of design as well as functionality. … A gift card could display the current balance, which is updated as the money is spent. Cards can also be used as mechanisms to allow the card providers to communicate with users, letting users send messages, respond to surveys, receive offers, discounts, and more. Other card add-ons might include integrated loyalty programs, coupon tracking tools, or price comparison tools. Support for tickets is also possible, and these can now be made interactive as well, alerting users to venue or time changes for the event, among other things.”

Ryan Kim at GigaOm says that opening the API “will pit Lemon against Passbook and perhaps Google’s larger vision for Google Wallet,” though he also reports that Lemon founder and CEO Wences Casares told him there are plans to integrate with Passbook. Perez reports that Lemon sees itself more as a complement than a competitor to Passbook and that the planned integration is about two months out.

QR codes breathe new life

While NFC technology continues to take hits in the payment space, it looks like QR codes might be enjoying a comeback. Apple employs the codes in its new Passbook service, and this week Target announced a new holiday shopping campaign using the codes; the idea is to steer “showrooming” consumers to Target’s website in hopes of retaining the sale.

Leena Rao at TechCrunch reports that Target will add the codes to the top 20 selling toys this holiday season. Consumers can scan the codes to purchase the toys with their mobile phones — even if they’re out of stock in the physical store — and then ship them anywhere in the U.S. for free. Rao notes this may be a preemptive strike against any holiday campaign plans Amazon may have up its sleeve — last year, the Internet retailer gave consumers a discount for “showrooming” at physical stores and then buying the products from its own retail platform.

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September 27 2012

Commerce Weekly: An early look at who’s who in Passbook

Here are the commerce stories that caught my attention this week.

Passbook’s early merchants

Apple’s iOS 6 launched last week, bringing the Passbook feature to iPhones, and merchants from all walks of industry have started jumping on board. Target was among the first to push its app update, and Sarah Perez at TechCrunch argues it will be one of the most influential merchants in making mobile wallets mainstream. Perez notes the practical nature of Target’s app, as it focuses on saving and storing mobile coupons. Mobile coupons are nothing new, of course, but Perez argues, “becoming part of a more comprehensive system — one that even pushes you reminder notifications as you walk into a store — it has the potential to actually change user behavior” (e.g. make consumers more comfortable and intimate with their phones as part of the shopping experience).

Perez also looks at startup gift card company Gyft’s new Passbook integration in a separate post. The company sells cards from more than 200 retailers, and for those with which it has a relationship, the app will allow users to check gift card balances, too. The integration also is on a per-card basis, so each card must be transferred into Gyft individually, but Perez says it’s worth the trouble: “instead of having a generic ‘Gyft’ card stored in the Passbook app, you’ll have what appears to be the individual store gift cards there, powered by Gyft.” Perez also looks at a few other startups that were agile enough to jump on board early, ahead of many major brands, including Belly and SnipSnap.

One of the more surprising of the major brands to be slow off the mark is Starbucks. Alex Heath at Cult of Mac reports that the Starbucks app will be updated by the end of the month and points out why it’s such a surprise the coffee mogul is late to the game. Not only is Starbucks mobile savvy with its Square payment integration, but “Apple originally routed Passbook in the iOS 6 developer betas to the Starbucks app in the App Store,” Heath writes.

A few of the other major brands already on board with Passbook include Walgreens, Ticketmaster, Fandango, Sephora and several Major League Baseball teams. To give Passbook a whirl in the real world, Josh Lowensohn at CNET took it to a Major League game. He writes that he was able to get into the game by having his ticket scanned off his phone but that the experience wasn’t completely paperless: “In order to give Passbook users some sort of proof of purchase, the stadium prints out a paper receipt that you need to hold on to. … The stadium also requires those with higher level tickets, to somewhere like the suite levels, to carry an extra paper ticket.”

A little rough, but it’s a start. If you want to peruse all Passbook-updated apps, AppShopper has a running list.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

The chaos in the payment space

Carol Coye Benson took a thorough look at the state of the payment industry over at Payments Views this week. She describes the landscape as being in chaos:

“When we look at the payments industry today, we see a rapidly fragmenting world, with multiple models, many using various decoupled or layered approaches, with many new solutions for both consumers and merchants. Choice and innovation, of course, may bring potential benefits, but will create equally obvious challenges — including a more confusing environment, for consumers and merchants alike. Regulators, too, will find this a more difficult environment to manage, as will investors, given that many of the new solutions do not have clear or established business models.”

Benson delves deep into each area, looking at the various fronts: wallets versus cards, merchants versus payments industry incumbents, secure element (SE) data storage versus cloud, etc. She also stresses that mobile commerce encompasses far more than mobile payments, including online ordering, self-checkout, mobile ticketing and mobile-enabled digital content purchases. You can read Benson’s complete analysis here.

For a hands-on look specifically at the state of mobile payments, CNN reporter Laurie Segall spent a day shopping in New York City sans physical wallet, using only her smartphone to pay. Throughout the day, she visits a variety of merchants and tests Google Wallet, LevelUp, Square and PayPal. You can see how each works out in the following video:

Studies show importance of the mobile shopping experience

A report released by NetSuite, Inc., this week spells out some good news for mobile payments on UK’s high streets. A press release at CNN Money highlights a few key findings from the report:

  • 67% of high street retailers already offer a mobile app, and that percentage jumps to 80% when you include retailers planning to launch a mobile app in the coming year.
  • Retailers expect mobile commerce to grow at a rate of 23%, an increase of £11bn in 2012.
  • 38% of retailers report their biggest challenge is integration with other ecommerce systems, 37% report budget as the problem, and 15% say they just don’t know how best to create a compelling experience.

A new study released by Google this month stresses the importance not only of having a mobile site or app, but of offering a mobile-friendly experience. A few highlights from the study include:

  • 61% of consumers say they’ll leave a site and move on to a competitor if they can’t easily and quickly find what they’re looking for.
  • 74% are more likely to become return customers if a site is mobile-friendly.
  • 67% say they’re more likely to buy a product or service from a mobile-friendly site.

You can download the NetSuite report here and the Google Study report here.

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September 20 2012

Commerce Weekly: Big data in retail

Here are a few stories from the commerce space that caught my attention this week:

Mom and pops sidelined by big data?

Gary Hawkins at the Harvard Business Review took a look this week at marketing and research in the commerce space and argued that the costs associated with big data advantages may be wiping out the little guy. Hawkins writes:

“In this war for customers, the ammunition is data — and lots of it. It began with transaction data and shopper data, which remain central. Now, however, they are being augmented by demographic data, in-store video monitoring, mobile-based location data from inside and outside the store, real-time social media feeds, third-party data appends, weather, and more. Retail has entered the era of Big Data.”

Hawkins points out that this level of consumer intelligence is highly advantageous and even more expensive, thus only retailers with adequate resources (read: deep, deep pockets) can compete. Citing a study (PDF) by the Grocery Manufacturers Association, he notes that “annual industry spending on shopper marketing at over $50 billion, and growing.”

In addition to sidelining smaller retailers, the shopper marketing trend is having a more pervasive effect on the industry as a whole by changing the distribution of budgeted marketing expenditures. “Trade promotion accounted for 44% of total marketing expenditures by manufacturers in 2011, lower than any other year in the past decade,” Hawkins notes. The reason for the shift is all about the ROI — quoting Matthew Boyle of CNN Money, Hawkins writes that “the partnership of Kroger and dunnhumby ‘is generating millions in revenue by selling Kroger’s shopper data to consumer goods giants’ … It is widely understood that Kroger is realizing over $100 million annually in incremental revenue from these efforts.”

This model not only caters to large retailers over smaller retailers because of the size of their wallets, but because it’s easier for brands to interact with the corporate headquarters of a major retailer with 1,000 stores than to interact with 1,000 owners of independent stores, Hawkins writes. He goes into detail about how this business model will affect the industry on several fronts — you can read his piece in its entirety here.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

NFC, a mess waiting to happen?

When Apple unveiled the iPhone 5 last week, the big news on the commerce front was the new device’s lack of NFC technology. After some time to mull it over, most are coming to the conclusion that it won’t be detrimental to Apple — or to mobile payments, for that matter. Brian Proffitt at ReadWriteWeb addressed the issue this week and argues that Apple will be just fine without NFC — you can’t really use it anyway, as NFC payments aren’t universally accepted. And with the expense and hassle on the part of the merchant in setting up for NFC payments, this form of payment is going to have to become far more ubiquitous to make it worth their while. Proffitt writes:

“NFC may afford some convenience to some customers, but if it doesn’t increase sales in a meaningful way it’s going to drop to a lower point on a business’ priority list. Getting more sales and customers is the big win, and NFC might not help with that when something like Passbook or other payment systems like Square could be implemented with less cost and hassle.”

Over at All Things Digital, Carey Kolaja, chief of operations for global product & experience at PayPal, took a look at this issue as well. She argues that NFC is a mess waiting to happen and asks why Apple would want any part of it anyway. Kolaja writes:

“No retailer will have multiple NFC boxes to take payments from different networks, and the NFC terminals shipping today do little more than just transmit the card number and transaction size. They’re not equipped to automatically accept the complex coupons and offers that make the digital wallet so exciting. On the technology side, carriers are trying one solution, phone manufacturers another, and technology companies yet another. Meanwhile, the consumer is standing at the register thinking ‘really, how hard is it to pull out my credit card?’”

Kolaja also defines “mobile wallet” and “digital wallet,” and explains why the terms are not interchangeable. She argues that, in the end, digital wallets will prevail over mobile wallets because “[r]elevance to the consumer will be king, and the ability to act in a seamless and secure environment across any device or platform will be what matters most to that consumer.” Her piece is well worth the read.

Mobile-empowered consumers are driving retail innovation

A new report released this week from MasterCard and the Economist Intelligence Unit showed that consumers are effecting change and innovation in the retail industry more than ever before. The report refers to this shift as “the era of the ‘I-Con’ — the smart, omnichannel, omnipotent consumer.” A couple highlights from the findings include:

  • “Data allows retailers to put the ‘I’ in I-factor”: data was voted the second most important factor in customer retention and in growing market share, as it allows retailers to better personalize services. “41% say they will use data to deliver an improved customer experience in the coming year.”
  • “Retailers are ramping up investment in new technology solutions to keep pace with customer demand”: 44% of retailers say they plan to offer contactless payment in the next year and 35% will invest to improve their e-commerce and m-commerce strategies and platforms.

Additionally, the study looked forward to 2020 and offered a few predictions. One notable highlight focused on mobile:

  • “Mobile commerce is predicted to become king”: 43% of retailers predict that mobile will become the most important channel for customer communication by 2020, ahead of brick-and-mortar stores and desktop PCs.

The findings echo study results from BigCommerce this summer that showed the exponential growth of e-commerce and m-commerce. The study results, visualized in an infographic, in part addressed the changing behavior of consumers and how mobile is driving those changes:


Click for the full infographic.

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September 13 2012

Commerce Weekly: Apple excludes NFC, leaves payment pioneering to others

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

So that’s that: No NFC for the iPhone 5

Leading up to yesterday’s Apple event, there was much rumor mongering over whether or not the iPhone 5 would include NFC technology. The rumors have now been resolved: Apple did not include NFC in the iPhone 5. All Things Digital’s Ina Fried talked with Apple’s Phil Schiller about the lacking technology:

“Apple Senior VP Phil Schiller said that Passbook alone does what most customers want and works without existing merchant payment systems. It’s not clear that NFC is the solution to any current problem, Schiller said. ‘Passbook does the kinds of things customers need today’.”

Schiller’s sentiments echoed those made by Square COO Keith Rabois last year, that NFC is “a technology in search of a value proposition.” Cotton Delo at AdAge reported on Apple’s decision to forego NFC and side step the mobile wallet arena and noted that it’s not likely to have any ill effects on the mobile shopping ecosystem, as there is plenty of competition in the space to advance mobile wallet technology.

All the same, advancement in technology doesn’t necessarily translate into ubiquitous adoption, and the decision not to include the technology could have ramifications beyond mobile payments. Ryan Kim at GigaOm argues that Apple’s “snub” was a big detriment for NFC, that including it on “the most popular phone” would have educated consumers and brought a level of validation the technology hasn’t yet experienced. Kim also highlights the bigger issue:

“NFC is much more than just payments and can facilitate personal media and information sharing, building access, marketing and easy Bluetooth pairing. Google, BlackBerry, Nokia and Samsung have all shown different ways in which NFC can be used. But without many common applications that can work between those devices, there’s fewer chances for people to really adopt the technology. With a new iPhone likely to be a best seller, there would have been a lot of ways for people to get acquainted with NFC-actions. Now, the promise of NFC will still struggle to be fulfilled for at least another year.”

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

There may be light in the tunnel for NFC yet

NFC might have taken a hit this week on the smartphone front, but the technology may have found a problem to solve in an (arguably more) unlikely place: the desktop computer. Adrian Covert at Gizmodo reports that MasterCard and Intel announced a partnership at the Intel Developer Forum this week that will “give merchants and laptop makers the necessary technology they need to act as credit card terminals.”

What this means for online shoppers, Covert says, is no more entering credit card numbers or storing them online — “you just tap your card or phone to your computer and get on with your day.” What this means for NFC could be a helpful nudge toward becoming a mainstream technology. Covert writes, “… with more and more phones and PCs coming equipped with NFC, the technology will be there en masse (meaning merchants can spend time and money integrating the feature knowing more than 10 people will use it).”

The growing “fustercluck” of services could hold back mobile payments

Leena Rao at TechCrunch took a look this week at what she calls “fustercluck” in the mobile payments arena. Noting the pace at which companies are launching mobile-payment-related platforms, she asks “how many more ways do we need to pay for a physical or digital product via a mobile device?”

Rao lays out the ecosystem landscape, including the major players like Google, Isis and PayPal, but notes that companies like Groupon, LevelUp and Shopkick are dabbling in mobile payments in various ways, and even major retailers have jumped in. The field is going to need to thin out, she argues, before mobile payments can achieve any kind of ubiquity:

“I think it’s safe to assume that there will be more than one clear-cut winner in the mobile payments/digital wallet race, but we will see consolidation. From the user point of view, a consumer is going to get frustrated very quickly if he or she has to use 10 different apps to pay for items.”

The deciding factor in which companies and platforms will come out on top goes beyond scale and the number of customers a platform can secure, Rao says. “I believe that the company or startup that commands the best value for both consumers and merchants will become the clear-cut leader,” she writes. Rao’s piece is well worth the read.

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September 06 2012

Commerce Weekly: Mainstream mobile payment a decade out?

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

Gimmick to mainstream — the difference a decade can make

With Square teaming up with Starbucks, PayPal partnering with major chains like Home Depot and McDonald’s, and all the hype and speculation around the new iPhone having or not having NFC to facilitate payments for Passbook, mobile payments are getting a lot of ink. But when will mobile payments be fully mainstream? Not for at least 10 years, writes Christina Bonnington this week at Wired. Bonnington points to slow adoption and infrastructure holdups as the major bottlenecks:

“Forrester Research estimates only one-fourth of U.S. consumers will own an NFC-enabled phone by 2016, with 100 million shipping in 2012. Until a solid majority of consumers own such devices, merchants have little incentive to create an infrastructure as receptive to smartphone payments as it is to cash and credit cards.”

Bonnington notes that credit card companies are pushing for merchants to upgrade their systems to accept contactless payments, but as analyst Mark Hung told her, this alone could take up to a decade. Bonnington points out that even after that happens, mainstream mobile payments will still face obstacles similar to those that credit card payments face now: competing platforms that force consumers to carry multiple credit cards to accommodate merchants who accept MasterCard and Visa but not Discover, for instance. Imagine a merchant accepting PayPal and whatever Apple develops but not Google Wallet or Isis. Adding to the chaos, processing fee distribution between banks and hardware/software developers will need to be sorted out, she says, as will agreements on how data gathered via mobile payment will be handled.

In a similar vein, Chris Ziegler at The Verge also argued this week that mobile payments are not ripe for the mainstream and pointed to the ultimate hurdle: consumer frustration and distrust. Ziegler shares a personal experience that highlights the cumulative result of the issues Bonnington noted together with the unreliability of cellular networks: even mobile payments in stores that are set up to accept them don’t always work. Until mobile payments become as reliable and ubiquitous as cash and credit cards, he argues, they’ll remain a gimmick.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

Wal-Mart tests mobile checkout, cashes in with new search engine

Wal-Mart joined the likes of JC Penney the Stop & Shop grocery chain when it began testing a mobile checkout service this week. Chantal Tode at Mobile Commerce Daily reports:

“The new Scan and Go [iPhone app] service is being tested at a single store in Arkansas, according to published reports. While customers will be able to scan items with their iPhone, they will not be able to pay via mobile at this point. … The mobile checkout service is currently being tested by employees at the Arkansas store and has not been rolled out to shoppers yet. Users will be able to transfer a list of items they have scanned to a self-checkout kiosk and then pay in one step.”

The motivation behind the new service, Tode reports, is to shorten customer wait times in line and to reduce the checkout area footprint.

Wal-Mart also reported this week that Polaris, the search engine it custom built for its website, is now fully rolled out in the U.S. Nidhi Subbaraman at Fast Company took a close look at how the search engine works:

“One of the ways Polaris is designed to augment the search experience is by treating search terms as categories. So, a search for ‘garden furniture’ may not serve up results with the word ‘garden’ in it, but would offer up suggestions and options for hardy and rainproof, garden-friendly furniture.

Another interesting feature of the search engine is that a product’s popularity on social media sites plays a role in its resulting search display. Sri Subramaniam, VP at WalmartLabs, told Subbaraman “[t]his ‘product popularity score’ is essentially like a Google page rank.” Right now, Subbaraman reports, the search engine integrates with product placements and “Likes” on Facebook, but “[a] product’s popularity on other social sites like Twitter or Pinterest could also one day feed into Polaris’s radar.”

So far, the search engine has proven successful for Wal-Mart — according to a post at Reuters, Wal-Mart reports a 10-15% increase in search conversion (the number of customers who make a purchase after searching on the site) since the rollout of Polaris began a few months ago.

Project Oscar gets a thumbs up

The European Commission approved a mobile wallet scheme this week that it began investigating in April as a potential monopoly. The joint venture by Everything Everywhere, O2 and Vodafone, called Project Oscar, was called into question by UK mobile phone network Three when it was shut out of the venture and by wallet competitors Google and PayPal.

According to the BBC, the Project Oscar founders plan to “release a unified smartphone-based service offering an alternative to cash, credit cards and loyalty cards,” and intend to “create a new company and begin hiring staff ‘as quickly as possible,’” though no launch date for the new wallet has been set.

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August 30 2012

Commerce Weekly: Google Wallet vs Apple Passbook

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

Google prepares its Wallet to compete with iOS 6

Robin Dua, Google’s head of product management for Google Wallet, participated in a video interview (embedded below) this week to talk about Wallet features and plans. Technology reporter Cromwell Schubarth notes in a post at Silicon Valley Biz Blog that the future plans for Google Wallet look a lot like Apple’s newly announced Passbook that’s due to release in iOS 6 this fall. Schubarth quotes Dua:

“‘One of the types of things we’re trying to do is make it easy for airlines, transit providers, and other types of issuers of credentials to make it super simple for them to get their credentials stored in the wallet,’ Dua said. ‘That’s the goal. We want you to be able to leave your leather wallet at home and carry your phone and transact with that as your primary transaction device.”

Dua said they plan for the Wallet to hold credit cards, loyalty cards, IDs and things like boarding passes and transit passes. Very much like Apple’s description of Passbook.

You can view Dua’s interview in the following video:

As far as mobile payments are concerned, however, Google Wallet might retain its leg up on Apple. Earlier rumors of the next generation iPhone, anticipated to be announced at a rumored Apple event on September 12, indicated the phone would include an NFC chip, fueling further rumors that Apple would launch a digital wallet. This week, Brian Klug and Anand Lal Shimpi at AnandTech presented a compelling argument as to why it’s highly unlikely the phone will include NFC. Ryan Kim at GigaOm reports:

“AnandTech said given the reports that the next iPhone will have a metal backing, there will not be enough space in the non-metal window reserved for other antennas to support an NFC chip.”

Of course, an NFC chip isn’t necessarily required for Apple to launch a mobile payment product. Some analysts have argued that Bluetooth technology would make more sense.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

It’s not about the tap. It’s about the data behind that tap

Dan Rowinski at ReadWriteWeb took a look at the transformative effect technology is having on currency and the way people shop and pay for goods. He argues that major changes to our cash-based society will be “brought on by the two most fundamental innovations to hit the mainstream consumer since the advent of the Web: mobile and cloud computing.” He notes that, philosophically, the cash-to-digital road hasn’t been (and isn’t) easy:

“This notion of using a smartphone to pay has been criticized by many people (including us at ReadWriteWeb) as adding no value. There has been a lot of hype about NFC for the last couple years, but there is really no discernible argument that can validate that a tap is easier or more valuable than swiping a card. This is the crux of the argument against mobile payments: The transformation taking place is not necessary. For NFC in particular, it has been called a solution without a problem.”

Rowinski argues that the transformation to mobile payments does, in fact, add value — the value is in the layers beyond the transaction. “The value of the mobile wallet is the digital transformation of monetary and transaction data,” he writes. “When a consumer makes a purchase on a smartphone, the retailer knows who that person is, the mobile wallet provider gets information about what was bought when and where and by whom, and the consumer gets the value of electronic receipts and the ability to receive coupons, offers and loyalty rewards.” You can read more of Rowinski’s analysis here.

Wallet competition roundup

John Martellaro at The Mac Observer pulled together a roundup of the competition in the digital wallet wars this week, with breakdowns of all the major players: Google Wallet, Merchant Customer Exchange (MCX), Isis, Square, PayPal and V.me. Martellaro addresses a few of the hurdles facing mobile payment as well, including technology and security issues, but also points out what might be the biggest — and perhaps most overlooked — issue: consumer frustration. Martellaro writes:

“… there is also the issue of competition that will confuse and annoy customers. For example, it doesn’t appear that Google Wallet will come to iOS. As a result, banks, telecom companies, and merchants are in a much better position to work out the requisite details. On the other hand, a system from smartphone makers, because of the competing interests, would generate discord. This could explain why Apple hasn’t jumped in with ‘Apple Wallet,’ (other than its iOS 6 Passbook).”

On the other side of The Pond, Mastercard heated up the mobile payment competition in Europe this week, striking a deal with Everything Everywhere, the biggest telecom operator in the UK. The initial offerings will be a bit different from other services that charge purchases to registered credit cards or bank accounts. The BBC reports that, “one of the first products would be a service in which users pre-pay money into an account before being able to spend it via handsets equipped with near-field communication (NFC) technology.” Future plans, according to the report, include adding the ability to pay through a bank account with a mobile phone and a service to facilitate person-to-person money transfers.

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August 23 2012

Commerce Weekly: Bringing mobile payment to the mainstream

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

The race is on

Earlier this month, mobile payment company Square teamed up with Starbucks to bring mobile payment to the coffee mogul’s 7,000 locations and millions of customers. This week, PayPal stepped up its game with two announcements. First, according to a report at Reuters, the company confirmed rumors that it’s running a mobile payment test with fast food giant McDonald’s at 30 of its locations in France.

Alistair Barr describes the program in the Reuters report, explaining that customers can order lunch on their smartphones or online, pay with PayPal, and pick up their orders in a separate line. McDonald’s has more than 30,000 locations worldwide — landing this partnership not only could catapult PayPal ahead of Square in the mobile payment race, but it will bring mobile payments to the everyday lives of the masses, further mainstreaming the idea of mobile wallets and mobile payment.

Upping the ante further, PayPal also announced a partnership with Discover that, according to Ryan Kim’s report at GigaOm, will bring PayPal payments to some seven million U.S. merchants. Through the deal, Discover will integrate PayPal’s payment system into its point-of-sale software, which alleviates involvement and investment from merchants. During its launch, planned for April 2013, the system will be a bit clunky, but it’s expected to smooth out quickly thereafter — Kim reports:

“At launch next year, PayPal users will be able to pay with a PayPal Access Card, which connects to a PayPal account and can be funded from a bank account or credit card. Users will be able to use the card in conjunction with a PayPal mobile wallet app, which will deliver e-receipts, offers and other services. But a few months later, PayPal users will be able to pay directly through point-of-sale terminals by entering in a PIN or phone number or by authorizing a payment through their mobile app after sharing their location with the merchant. That will eliminate the need for any cards or traditional wallets and will enable consumers to get the benefits of a digital wallet to receive offers, track spending and tap into loyalty programs.”

PayPal’s VP of retail services Don Kingsborough told Kim this deal with Discover will be “key in achieving ubiquity” to help facilitate consumer adoption.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

The NFC pain point

Jon Worley, director of business development and customer interaction at The Logic Group, wrote a guest post at InternetRetailing this week, looking at the real business value of mobile wallets. Worley argues that the value isn’t in offering a convenient payment service to customers, but in the potential for increased consumer interaction:

“The mobile wallet enables the collection of valuable data to create customer interaction opportunities for retailers, marketers and advertisers. These interactions can include in-store customer loyalty programmes, vouchers, or location based services for customers. For example, with an NFC-enabled mobile phone, a customer can tap a poster or product label to view promotional and product information as well as offers and complimentary items for cross selling.”

Worley says one of the major pain points for the market right now is the slow adoption of NFC in mobile phones, but if the newest edition of the annual Gartner Hype Cycle report is correct, NFC technology is at the end of its hype and is now experiencing the “Trough of Disillusionment” on its way to the “Slope of Enlightenment.” Dan Rowinski at ReadWriteWeb took a look a the report results and the estimation that NFC will reach ubiquity, or the “Plateau of Productivity,” within 2 to 5 years.

Rowinski says the major hurdle of getting NFC technology into the phones, and therefore the hands of consumers, is being solved fairly quickly, as most new smartphone model releases include NFC. He points out, though, that the solution to the secondary growth hurdle isn’t going to be so straightforward:

“As we have seen, the mobile payments industry is more or less a mess. There are too many competing interests with competing products and standards, none of which are being wholeheartedly embraced by consumers. NFC is trapped in the middle of the mobile payments sector. This is what it is like being in the Trough of Disillusionment.”

Mobile commerce trends

Mashable’s Kate Freeman took a look this week at an infographic created using results from a new report from Monetate on where mobile commerce is headed, with highlights from the iPhone-Android battle. Freeman reports that Monetate’s data was gathered by analyzing more than 100 million online shopping experiences. A few interesting data points include:

  • Between Q2 2011 and Q2 2012, website traffic from smartphones increased 103%.
  • iPhone continues to dominate Android: in Q2 2012, iPhone had a 5.41% share of total website traffic versus 3.31% for Android.
  • The top three shopping activities involving smartphones were taking a photo of a product (37% of users did this), searching for a store (35%), and researching products and prices (35%).
  • 1 out of 3 smartphone users shares their location.

Another mobile commerce trend highlighted this week was the use of video in product sales. Darcy Travios at Forbes cited research performed by ecommerce video company Invodo that videos increase sale conversions, especially on mobile devices. Travios writes:

According to Invodo research, mobile shoppers are three times more likely to click and view the video than desktop or laptop users. Internet Retailer reports that those that view a video are 144% more likely to place that item in a shopping cart. And, 52% say that watching the video makes them more confident about their purchasing decisions (read: fewer returns).

Citing a report from Comscore, Travios also reports that “e-commerce visitors who watch a video are 64% more likely to make a purchase than those that don’t.”

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August 16 2012

Commerce Weekly: U.S. merchants take on mobile payment

Merchants enter mobile payment arena

With mobile payments on the brink of booming, everyone is angling to get in the game, from payment companies like PayPal and Square to mobile carrier ventures like Isis and Vodaphone to Internet giants like Google. This week, a group of U.S. retailers announced they were taking payment matters into their own hands and planning a joint merchant mobile payments network called Merchant Customer Exchange (MCX). And there are some big players involved.

Robin Sidel at The Wall Street Journal reports that 14 merchants have signed on so far, including Wal-Mart, Target, Best Buy, 7-Eleven, and Lowe’s. Wal-Mart corporate VP and assistant treasurer told Sidel, “We’re open to all partners, but it has to be beneficial to member merchants in a way that improves the system and doesn’t layer on additional costs.”

Saving money appears to be one major motivator behind the new network. Ryan Kim at GigaOm asserts that member merchants are setting themselves up to save money in multiple ways. He writes:

By banding together, they may be able to get better interchange fees from the credit card networks. And in a mobile wallet, they may be able to steer consumers to use their own issued cards or prepaid gift cards. And if an issued card is pulling funds directly from a bank account, they can avoid card fees. You might see retailers offer deals on the spot for consumers who fund a purchase using their bank account through their mobile wallet.

Kim also notes that by launching their own system, the retailers will retain control over their own data and keep it out of third-party hands, pointing out that “Google, for example, is trying to get at the purchase data through Google Wallet.”

No launch date has yet been set for MCX, and Sidel reports that the search for a CEO is underway.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

The future of shopping is all in the tech

Recent Nielsen reports show that not only are smartphones holding a majority in the U.S. (50.4% of mobile subscribers as of March own a smartphone), but that smartphone owners are using their phones to shop. The latest Nielsen report shows that 47% of smartphone owners (or 45 million users) used shopping apps in June, with eBay Mobile and Amazon Mobile apps in the lead.

There’s no question that mobile technology is beginning to change the retail landscape, but we’re just at the tip of the iceberg. Jon Swartz took a look at the future of shopping over at USA Today and writes that technology advances will change everything from physical appearances of stores to shifting the retail workforce focus to be more customer centric. Shopkick CEO Cyriac Roeding told Swartz, “The next five years will bring more change to retail than the last 100 years,” and a Gartner analyst told him that retail we know today will be a thing of the past in 10 years:

“Big-box stores such as Office Depot, Old Navy and Best Buy will shrink to become test centers for online purchases. Retail stores will be there for a ‘touch and feel’ experience only, with no actual sales. Stores won’t stock any merchandise; it’ll be shipped to you. This will help them stay competitive with online-only retailers, Sterneckert says.”

Some of the interesting tech Swartz examines includes digital dressing rooms that allow customers to see how clothing will look and fit simply by standing in front of an Intel Magic Mirror that simulates body type and fabric fit, with no need to actually try on the clothes, and 3-D printers that will allow consumers to print-on-demand many household necessities such as towels and utensils.

Swartz also looks at the coming brick-and-mortar retail revolution and notes that mobile technology will play a key role:

“By the time you walk into a store in the near future, the employees there will probably know what you want to buy, based on information on your trusty phone or tablet. Merchants will know your gender, age, race and income … imagine waving your smartphone over products and seeing what’s inside. Holding the phone over a DVD’s bar code might activate a movie trailer on the phone’s screen … All of this will be made possible with so much personal data on smartphones, and the ability of merchants to parse it to gauge who is just browsing and who’s on a mission to buy.

Swartz examines smartphone technology, the death of cash, augmented reality and harnessing social media as the driving forces behind the future of retail. His post is well worth the read.

East vs West Coast mobile shopping trends

Big data company Sense Networks released its first Mobile Advertising Pulse report, showing East and West Coast mobile shopping behaviors tend to align with lifestyle stereotypes of the two coasts. The company press release on the report identifies the East Coast as “a hub for education and the more practical consumer,” and the West Coast as “being known for residents that are focused on health and fitness.”

Looking at click-through rates (CTR) for mobile advertising deals, Sense Networks identified the top two ad deals for East Coast consumers as “optical and eye doctor deals,” whereas West Coast consumers leaned toward mani-pedi offers and Pilates classes. A few of the fun East Coast versus West Coast data points include:

  • “Consumers throughout the East also had a 60% higher CTR on education deals, including art and photography courses.”
  • “Overall West Coast consumers had a 24% higher CTR on health and fitness deals than east coast mobile users.”
  • “East Coast consumers had a 26% higher CTR on nightlife and an 18% higher CTR on restaurants.”
  • “West Coast consumers had a 136% higher CTR on travel and 33% higher CTR on food and drink (for example, wine tasting).”

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August 09 2012

Commerce Weekly: Starbucks gives Square’s mobile payment a big push

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

Square gets Starbucks, cash and Howard Schultz

SquareSquare announced a new partnership with Starbucks this week. Peter Ha at TechCrunch reports:

“Beginning this fall, Square will begin processing all U.S. credit and debit card transactions at participating Starbucks stores across their 7,000 locations. Pay with Square users will be able to find a nearby Starbucks in the Square Directory from their iPhone or Android smartphone.”

Ha notes in his post that as part of the partnership, Starbucks also is ponying up $25 million in series D funding for Square and offering up its CEO, Howard Schultz, to serve on Square’s board of directors.

Harry McCracken points out in a post at Time Techland the partnership will put Square in a much better position to compete on the mobile payment front. McCracken writes:

“At the moment, Pay with Square is accepted at around 40,000 locations — mostly neighborhood businesses such as independent coffee shops, restaurants and beauty salons. The agreement with Starbucks will put it in a major nationwide chain for the first time, and therefore puts it in closer competition with Google Wallet, which is already accepted at Home Depot, Office Depot, Starbucks rival Peet’s, Macy’s, RadioShack, 7-Eleven and other major merchants.”

Another important aspect of the agreement is that Starbucks will promote other local Pay with Square merchants “from within a variety of Starbucks digital platforms, including the Starbucks Digital Network and eventually the Starbucks mobile payment application.” As Ha notes in his post, “this catapults Square into the mainstream consciousness for the millions of drones who drop by their local Starbucks on the way to work.”

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

And the winner is …

There’s a lot at stake in the race to control the blossoming mobile commerce market. A new report from ABI research predicts that by the end of 2017, 24.4% of online revenue will come from mobile commerce. And given that the mobile device market is just starting to boom, that percentage is likely to increase.

Consumer goods analyst Austin Smith interviewed with Isaac Pino at The Motley Fool this week and declared eBay, Amazon and Google early winners of mobile commerce race.

Smith highlights several reasons for his choices. EBay, he notes, sells 8,000 cars per week on eBay Mobile, and he also points out that eBay’s PayPal division is expected to handle $10 billion in transactions next year. As for Amazon, Smith says the company recently saw mobile sales top $1 billion and pointed to its ever-growing ecosystem of tablets and a possible transition toward a phone. And for Google, Smith reasons that “there are very few companies out there that have as powerful data analytics as Google … virtually no company has better data about how you shop.”

Keeping itself in the winner’s circle for now, eBay announced this week that the eBay Now mobile app will allow shoppers to order products from local retailers, with same-day delivery (a service Amazon has also been rumored to be pursuing). According to a report at Reuters, eBay is testing the app with a number of retailers, including Target, Best Buy, Macy’s and Walgreens, in the San Francisco market. The report describes the consumer experience:

“Shoppers involved in the test can download the app onto mobile devices such as Apple’s iPhone and iPad, then search for products to buy from local stores in San Francisco. When they find a product, users press a ‘Bring It’ button and the order is sent to couriers. The courier closest to the product accepts the order, drives to the store to pick up the product and then delivers it to the shopper’s home. Customers pay when the product arrives.”

According to the report, the first three deliveries are free, and “after that, delivery is $5 for the test period, and the minimum order is $25.”

The secret to winning the mobile wallet race

Forrester Research senior analyst Denee Carrington has a new report out this week on the mobile wallet wars. In a post at Forbes, Carrington shares a few takeaways from her research, including the secret to winning the mobile wallet race:

“Winning wallets will be convenient to use, contextually relevant, with a compelling experience. Moving the needle on the adoption of digital wallets — particularly for mobile digital wallets — will require infusion of significant value throughout the purchase journey before, during, and after payment. Winning solutions will bring this to life through greater convenience, contextual relevance, and a compelling purchase experience.”

Carrington also takes a look at the market dynamics and competitive nature of the mobile wallet landscape, and argues that NFC wallets may not reign victorious in the end. Hardware-agnostic wallets face fewer hurdles and thus will enjoy faster adoption. You can read more of Carrington’s insights here and find her full report here.

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August 02 2012

Commerce Weekly: Apple buys into NFC security

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

Apple looking to secure NFC?

Further fueling the rumors the next gen iPhone will include NFC (there hardly seems to be much doubt at this point), Apple announced this week that it will shell out more than $350 million to buy AuthenTec, a technology company that, as Poornima Gupta and Sinead Carew at Reuters describe, “provides mobile security software licenses to companies like Samsung, and fingerprint sensor technology to computer makers such as Hewlett-Packard Co and Dell Inc.”

As with most things Apple, much speculation ensued as to what this pending purchase will mean for the next iPhone. As noted in the post at Reuters, AuthenTec’s fingerprint sensors are used in mobile phones in Japan to authenticate mobile payments. Erica Ogg at GigaOm runs through the evidence pointing to a pending “iWallet,” including: the launch of Passbook; the 400 million credit cards stored in iTunes; and the fact that “[o]ne of [AuthenTec's] key products is an NFC chip with on-chip encryption, which is designed specifically for mobile payments.” Ogg notes that it’s possible Apple purchased the company so its competitors couldn’t, but points out that “AuthenTec is considered a leader in the secure mobile payments field.”

After the recent NFC hacking demonstration at Black Hat, Apple’s intended acquisition of AuthenTec has also fueled speculation that Apple is looking to provide a level of NFC security that nobody else has. Ian Paul at PCWorld points out that “AuthenTec’s expertise could help Apple bolster the security of any NFC feature it implements. This would also make the iPhone and iPad more appealing to security-conscious IT managers at large corporations.”

Mobile payment conjecture aside, Maribel Lopez at Forbes argues that, sure, Apple could use this company’s technology to help advance the “stalled” mobile payment market in the U.S., but the potential of the technology goes far beyond a mobile wallet. Lopez points out it can be used to manage and verify digital identities, a function that, she argues, will become an inherent part of daily life as services become “people-centric, but device and network agnostic”:

“The future is contextual identity that will be based on multiple factors, including location, device, username/password and possibly biometric authentication. … Fingerprinting recognition in Apple devices could unlock a new age of usability where each user’s preferences and customization could be retrieved by simply pressing a finger on a screen. This could also be combined with the next generation of Siri to enable seamless navigation with voice. The post-PC world needs a new set of navigation and identity tools. It’s clear that Apple is trying to build this via home grown products and strategic acquisitions.”

Lopez’s piece is this week’s recommended read — you can read it in its entirety here.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

PayPal teams with The West Australian daily to cross the digital divide

Embracing digital isn’t the same as assimilating digital — one of the most difficult obstacles in the era of the Internet is figuring out how to successfully integrate digital into traditional sales and business models. Many retailers and newspapers, for instance, have erected digital silos, creating digital products and websites as their own entities, often to the detriment of both the digital and traditional products.

In a post examining the current state and future potential of mobile commerce, Jay Henderson, global strategy program director at EMM, writes:

“Perhaps the biggest obstacle marketers face is the fact that 79 percent are running mobile campaigns in silos, discretely and on an ad hoc basis. In today’s cross-channel world, marketing channels cannot survive on islands where fragmented views of customers compromise the ability to measure overall performance and hinder the customer experience.”

Likewise, much of newspapers’ traditional marketing and advertising efforts have failed to cross the digital divide. PayPal and The West Australian daily newspaper, however, have launched an advertising sales campaign that looks to do just that by making the newspaper’s print product more mobile. A report at Mobile Payments Today describes the campaign:

“The West Australian is including QR codes in advertisements, turning a reader’s mobile device into a personal shopping assistant. … When the newspaper’s readers scan a code, they are taken to a mobile optimized shopping cart that lets them order and pay for the item from their PayPal account … [PayPal's mobile wallet tool] prepopulates relevant shipping information into order forms so shoppers don’t have to contend with entering information on a small mobile screen.”

You can see the mobile-print campaign in action in the following video:

Mobile wallets enter the cloud

Since its launch a little over a year ago, Google Wallet has seen its share of issues, not the least of which were concerns with security and the fact that it couldn’t seem to establish credit card partners, aside from MasterCard. Google took that bull by the horns this week — it put its wallet in the cloud and now supports all major credit and debit cards.

According to the press release, the cloud-based wallet stores users’ card numbers on Google servers rather than on individual phones, and “[a] wallet ID (virtual card number) is stored in the secure storage area of the phone, and this is used to facilitate transactions at the point of sale.” This change allows for the added credit and debit card support.

The move to the cloud also allows Google to enhance security beyond the Google Wallet PIN. The release states:

“[W]e’re adding a Google Wallet security feature that makes it possible for you to remotely disable your mobile wallet on a lost phone. … When you successfully disable your wallet on a device, Google Wallet will not authorize any transactions attempted with that device*. If the Google Wallet online service can establish a connection to your device, it will remotely reset your mobile wallet, clearing it of card and transaction data.” … [* For now, Google Prepaid Cards and some Citi MasterCard cards will remain active until Google Wallet can remotely connect and reset your mobile wallet.]

The new cloud-based wallet is available now on Google Play. Users will need an NFC-enabled device as well as an Internet connection to register cards, view transactions and to select a card to pay with. Actually paying at the cash register, however, doesn’t require an Internet connection.

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July 26 2012

Commerce Weekly: Square disrupts, PayPal shrugs

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

The mobile payment war rages on

David Pogue took a look this week at Square’s latest maneuver in the mobile payment race, its Pay With Square app. Pogue says it’s far more disruptive than the simple ability for anyone to accept a mobile credit card payment:

“You walk into a shop or cafe. The cashier knows that you’re on the premises because your name and thumbnail photo appear on his iPad screen. He rings up your items by tapping them on the iPad.

“And now the magic moment: To pay, you just say your name. The cashier compares your actual face with the photo on the iPad’s screen, taps O.K., and the transaction is complete. No cash, no cards, no signatures — you don’t even have to take the phone out of your pocket.”

Writing about taking the app for a spin at a coffee shop in San Francisco, Pogue describes a few hang-ups: merchants have to use an iPad as a cash register and they must enter every item they sell. Another issue concerns Square’s security and actually stems from customers themselves — users are required to upload a photo of themselves to set up a new Pay With Square account, but as the coffee shop cashier told Pogue, “sometimes use pictures of cats or SpongeBob instead of their own photos,” which prevents a visual ID of the customer.

The mobile payment competition isn’t sitting still, however. Pogue also notes that PayPal is working to catch up with Square’s frictionless purchase technology with its own local payment system, PayPal Local. And at the recent VentureBeat MobileBeat conference, PayPal’s vice president of global product Hill Ferguson said he isn’t particularly concerned with Square. John Koetsier reports at VentureBeat: “Though [Square] can facilitate very personal commerce — put it on Bob’s bill — [Ferguson] says it is not going to work very well at Safeway.” Ferguson also acknowledged that PayPal is a “two-click” system, as it doesn’t own the ecosystem “like Google Play or Apple,” but says he sees both companies as “fantastic potential partners, doing highly complementary things.”

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

NFC security hacked at Black Hat 2012

Andy Vuong at the Denver Post took a look at NFC technology this week, its potential uses — including but not limited to mobile payments — and the likelihood of it becoming mainstream in the U.S. Vuong writes that the biggest question concerning NFC’s future may be whether or not Apple will include the technology in its next generation iPhone.

Mohamed Awad, associate product line director for NFC products at Broadcom and a board member of the NFC Forum, told Vuong that he doesn’t think the future of the technology hinges on Apple’s adoption, and he also dismissed security concerns. Vuong reports:

“‘The credit card in your wallet is just magnetically encoded, so anybody with a magnetic reader can read all of your credit card information,’ [Awad] said. ‘On your smartphone, there is a secure element in there, the encryption is much more tight and it’s a much more secure platform.’”

The security concerns, however, may not be so easily discounted. Research consultant Charlie Miller demoed the security gaps at the Black Hat security conference in Las Vegas this week. Meghan Kelly at VentureBeat reports that Miller showed a video in which he closely followed a friend, keeping his hand “awkwardly close to his buddy’s back pocket” in order to hack his phone. Kelly says that though Miller noted the attack was difficult and that the NFC bugs he found are “not too extensive,” he was still able to exploit a bug in the Nokia N9 smartphone. She writes:

“The N9 has a feature in it called ‘pairing,’ which allows the phone to connect to other devices using Bluetooth and NFC. … If a hacker creates a tag that can pair the phone, she can have access to the Bluetooth network and eventually make it into the rest of the phone. Miller demoed the hack and pulled all the data from the phone, including the photos and address book. He also showed that you can send text messages to other phones using the hacked phone, as well as make calls.”

Kelly writes that Millers takeaway for the mobile security community is to “[m]ake phones prompt the user before accepting an NFC connection.”

Visa takes mobile payment to the Olympics

Bill Gajda, Visa’s head of mobile, brought some perspective to the state of mobile payments this week in an interview with Roger Cheng at CNET. Gajda says that though mobile payment experiments are underway, the mode of payment won’t become mainstream in the U.S. for two to three more years. Cheng reports that the issue isn’t only related to hardware and technology hang-ups, but that “Gajda’s more realistic view of the broader acceptance underscores the difficulties in changing long-drilled consumer habits and getting past the comfort level of paying with cash or swiping a credit card.”

Visa is planning to address the issue of consumer awareness at the 2012 Summer Olympic Games in London, England, which begin this week. Cheng reports:

“Visa is using the Olympics as an international showcase for mobile payments. The company has hooked up 140,000 payment terminals in London with near-field communication, or NFC, chips that enable the tap-and-pay process. The locations include 5,000 London taxis and 3,000 point-of-sale venues at the Olympics. The company is handing out several thousand Olympic-edition Galaxy S3s to VIPs such as athletes to test out the service.”

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July 19 2012

Commerce Weekly: Amazon chases immediate gratification

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

Same-day delivery could be the Holy Grail for Amazon, kiss of death for physical retailers

Farhad Manjoo at Slate took a look this week at Amazon’s change of heart in its tax war with US states and what it might mean. Manjoo notes the company dropped its sales tax fight with California last fall and began signing tax agreements with many states, including California, New Jersey, Indiana and Nevada.

Looking at an investigative series the Financial Times is conducting on Amazon (subscription only), Manjoo reports that this move plays into Amazon’s new game strategy: to set up distributions centers all over the country in order to achieve same-day delivery speeds in as many locations as possible. Manjoo says the implications of this for brick-and-mortar retailers are hard to overstate:

“Same-day delivery has long been the holy grail of Internet retailers, something that dozens of startups have tried and failed to accomplish. (Remember Kozmo.com?) But Amazon is investing billions to make next-day delivery standard, and same-day delivery an option for lots of customers. If it can pull that off, the company will permanently alter how we shop. To put it more bluntly: Physical retailers will be hosed.”

Christopher Matthews at Time Business took a look at the Amazon situation as part of a series on the future of retail. He cites analyst Aaron Kessler’s estimation that “e-commerce represents roughly 12% of retail sales overall and that that figure could double in the next 10 years,” and he notes that Amazon isn’t just growing along with the market: “It’s actually gaining market share in that category — by growing at three times the rate of e-commerce overall.” Matthews addresses Manjoo’s piece at Slate as well, and doesn’t necessarily agree that brick-and-mortar retailers will be “hosed.” Matthews argues that Amazon is strong, but competition is fierce:

“Indeed, traditional retailers do not see their obsolescence as inevitable and are doing all they can to leverage their main strength: their brick-and-mortar stores. And there is reason to believe that many will have success with this strategy. Consumers still want the social experience of in-store shopping. They want knowledgeable and attentive service, and they want to test, touch and try on products before they buy them.”

Both posts are well worth the read: You can find Manjoo’s piece here and Matthews’ piece here.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

JC Penney to launch mobile checkout

Though some predict Amazon and e-commerce will wipe out brick-and-mortar retailing, JC Penney CEO Ron Johnson is certain this will not come to pass. During an interview with CNN Money’s Miguel Helft at Fortune’s Brainstorm Tech conference this week, Johnson defended the position of the physical store. Helft reports: “[Johnson] said he is bullish on physical retailing, and predicted that online retailing, just like catalog shopping a few decades ago, will eventually reach a plateau. He said different categories of retailing will level off at different points, and that ‘the physical store will have a permanent place.’”

Johnson also dropped something of a retail-strategy bomb. Helft writes:

“He announced that JC Penney had scrapped an outdated technology infrastructure and replaced it with an Oracle-based system. The new technology will allow the company to improve the in-store experience with mobile checkouts, self checkouts and tags based on RFID instead of bar codes, which would speed up purchases.”

Kim Bhasin at Business Insider highlighted tweets posted during Johnson’s talk at the Brainstorm Tech conference that indicated the mobile self-checkout system would be in place by the end of 2013. During his interview with Helft, Johnson, who formerly was the Senior Vice President of Retail Operations at Apple and pioneered Apple’s Genius Bar and retail store concepts, compared JC Penney’s situation to Apple’s renaissance. He said Apple had “much tougher years” than what JC Penney is experiencing and noted that “[t]ransformation takes time.”

PayPal buys Card.io

PayPal announced this week that it has acquired Card.io, a startup that allows developers to scan credit card data using a smartphone camera. Hill Ferguson, PayPal’s VP of global product, wrote on the company blog that the acquisition will allow the Card.io team “to work on projects that will accelerate innovation at a scale that’s just not possible at a startup.” Hill also noted the technology will still be available to outside developers, which could point to a licensing strategy down the road, but Hill didn’t elaborate.

PayPal already had integrated Card.io’s technology into its PayPal Here product to better compete against Square, but Ryan Kim at GigaOm notes the technology opens other doors as well, allowing “PayPal to not only facilitate more payments but also potentially help with other visual scanning uses such verifying identification cards.” Kim also points out that the acquisition “keeps Card.io out of the hands of Square or other competitors.” This acquisition is PayPal’s second in the mobile payment arena, having acquired Zong last year.

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