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March 14 2013

Commerce Weekly: Intuit Pay heats up U.K. mobile payments market

Intuit Pay enters U.K., PayPal Here takes on Square Register

On the heels of PayPal announcing it would bring PayPal Here to the U.K. later this year, Intuit launched its Intuit Pay mobile payments solution in the U.K. market. The platform includes a mobile app and a card reader, much like its competitors iZettle’s, Payleven’s and (soon) PayPal Here’s platforms.

Ingrid Lunden reported at TechCrunch that like its competitors, Intuit Pay will charge a per-transaction fee — in its case, a 2.75% flat rate — but unlike its competition, Intuit will offer its mobile payment card readers for free for a limited time. Lunden noted that Intuit Pay will be able to integrate with Intuit’s QuickBooks accounting software and its other business products, so offering the card reader for free doubles as an incentive for merchants to join Intuit’s business ecosystem.

The card reader at launch is available only for iOS devices, but Lunden reported that “other platforms like Android are on their way soon.”

In related news, PayPal launched PayPal Here for the iPad to compete with Square Register as a small business point-of-sale solution. Leena Rao reported at TechCrunch that the app — PayPal’s first native tablet app — features multiple log-in capability to accommodate multiple employees and multiple “cash registers,” and allows for a variety of payment methods, including swiping a credit card with PayPal Here, manual card number entry, and scanning a card using Card.io. Rao also noted that the app integrates with eBay’s RedLaser technology so merchants can scan barcodes to make a sale or even to add to their inventories, something Square Register isn’t yet capable of doing.

PayPal’s new iPad app only works in the U.S. using the PayPal Here dongle, but Rao reported that PayPal intends to integrate the technology with its international offerings in the future.

Insights into the future of retail from SXSW panels

Retail and the future of commerce has been a topic of sessions and discussions this week at the South by Southwest (SXSW) conference. In a post at Publishers Weekly, Rachel Deahl reported on the “Retail is Going Mobile” panel, which covered the ways in which mobile has already changed the retail experience and how it might influence it going forward.

Deahl highlighted comments from panel member Christopher Mason, CEO and co-founder of Branding Brand, who noted many retailers are falling behind in their mobile strategies, if they even have one. Deahl reported:

“Mason said that, of the top 500 retailers, 60% have a mobile consumer interface. This means, he noted, that for the first time, the relationship between the customer and the retailer is being shaped in a world where ‘the customer is ahead of the retailer.’”

Looking at where mobile is headed, Deahl noted that Mason pointed to Sephora’s new “skin scanner” technology that personalizes and IDs a customer’s unique skin tone and integrates with Sephora’s mobile app to send customers alerts when new products for their coloring arrive. “This kind of user experience, Mason feels, is where mobile retailing is headed,” Deahl wrote. “He sees mobile retailing apps focusing on using our personal information to improve and personalize the in-store experience, such as, say, alerting a customer how many pairs of shoes are in stock in their size when they enter the shoe store.”

In a post at Salon.com, Andrew Leonard covered an SXSW panel that featured Mondelēz International’s VP of global media and consumer engagement B. Bonin Bough. Bough related an in-store experiment that points to the future of retail. Leonard wrote:

“Bonin described an experiment with shoppers at Stop & Shop who used their mobile phones to scan the bar codes of the items they wanted to buy, and then paid with their phones at checkout. He said that by seeing what shoppers were scanning, in real time, Mondelēz could zap them coupons for different items physically located on that aisle and were able to significantly boost sales of those items. ‘Targeting people in aisle, in the moment, at the moment of truth, is the holy grail of retail marketing,’ said Bonin. This is how the millennial shoppers of the future, who are ‘more mobile, more connected, and more into sharing,’ will do their business.”

Time editor at large Harry McCracken also served as a moderator on an SXSW panel called “Mobile Disruption & the Rise of the Local Web” that addressed the rise of services involving commerce between local individuals, which are designed more for phones and mobile devices than for PCs. In a post at Time Tech, McCracken noted that the panel discussion kept circling back around to person-to-person lodging rental service Airbnb — one attendee in the session tweeted: “Wow… About a quarter of the room here at #SXSW2013 is staying at @airbnb place. Hotel chains – prepare for major disruption. #localweb.” McCracken aggregated tweets sent during the session using Storify to highlight the session’s key points — you can read his post at Time Tech.

FTC report tackles mobile payments concerns

The rapid growth in the mobile payments arena — one recent study estimated global mobile payments transactions could reach $1 trillion by 2015 — has caught the attention of the U.S. Federal Trade Commission (FTC). The government agency released a report this week, “Paper, Plastic… or Mobile? An FTC Workshop on Mobile Payments.” According to the press release, the report offers guidelines for developing dispute resolution policies, encourages industry-wide adoption of strong security measures, and “highlights the need for companies in the mobile payment sphere to practice ‘privacy by design,’ incorporating strong privacy practices, consumer choice, and transparency into their products from the outset.”

Diane Bartz reported at Reuters that the FTC’s report “also urged all companies in the mobile data chain — from app sellers to telecommunications companies — to encrypt the entire payment chain and take other steps to ensure that consumers’ data cannot be hacked and used to steal from them.” She noted the FTC also is encouraging mobile payments companies to be more transparent with consumers about how their data is collected and used, and quoted from the report: “‘Companies should provide reasonable security for consumer data and should limit data collection to that which is consistent with the context of a consumer’s interaction with that company,” the report said.’”

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January 17 2013

Commerce Weekly: PayPal marches toward ubiquity

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

PayPal expands its footprint with new partners

PayPal JambaJuice AppPayPal JambaJuice AppPayPal announced this week it has expanded its U.S. footprint to include 23 new partners for its PayPal in-store payments service, in addition to the 15 national partners announced last May, making its service available in 18,000 physical store locations across the country.

According to a post on the PayPal blog, new retail partners include Barnes & Noble, Office Depot, Foot Locker and Jamba Juice, and “two additional partners that [they] will share publicly soon.”

The deal PayPal struck with Jamba Juice goes beyond the in-store payments service that allows customers to pay with their phone number and a pin, or by using their PayPal payment card. Chloe Albanesius reports at PCMag that PayPal is testing its PayPal App in one Jamba Juice location to allow customers to place and pay for their orders, so when they arrive at the location, they just have to pick up their smoothie.

Global product VP Hill Ferguson notes in a post at the PayPal blog, that the feature is available only for iPhone users at this point and that there are plans to expand to more Jamba Juice locations this year.

In addition to its announcement of new retail partners, PayPal also announced a new hardware partner. Sarah Perez reports at TechCrunch that PayPal is “also partnering with point-of-sale and hardware maker NCR to expand into restaurants, as well as into other businesses, including gas stations and convenience stores.”

PayPal retail services VP Don Kingsborough explains on the PayPal blog that in the first phase of the agreement, PayPal mobile payments options will be integrated into the NCR Mobile Pay app and NCR Aloha Online Ordering. “PayPal will be a payment option and allow consumers greater choice for simple, fast and secure purchases, alongside credit or debit cards.,” Kingsborough writes. “Consumers will also be able to use the PayPal mobile application to locate, order-ahead and “check-in” at participating NCR Mobile Pay merchants to access the same functionality.”

According to Kingsborough’s post, the agreement also will involve integrating PayPal mobile payments into NCR’s Convenience-Go (C-Go) app for gas stations and convenience stores and an enhancement to NCR’s Netkey Endless Aisle app “to enable in-store payments with PayPal to either buy-in-store or provide shipping capability for out of stock items.”

Mobile wallets aren’t trumping credit cards, but perhaps Apple’s can

Mobile Commerce managing editor Bill Siwicki argued this week in a post at Internet Retailer that mobile wallets are not going to catch on anytime soon “due to a variety of hurdles, credit cards being perhaps the biggest.” Quoting an email exchange with Ben Saren, vice president of marketing at payment processor Litle & Co., Siwicki writes:

“‘People are never going to switch to mobile wallets as long as it’s just as easy to pull out a credit card as it is to pull out your phone. There’s no incentive to change the channel,’ Saren says. … ‘Love or hate the card networks, they have paved all of the highways and largely made them traffic-free. When you go to a retail location and buy something with a piece of plastic, the authorization happens in less than a second. … So somebody needs to tell me how the system is broken today and why we need something else.’”

Siwicki does note, however, that though “mobile wallets today are not a better mousetrap,” they do connect with the Internet in ways that credit cards can’t, which opens new avenues for merchants to offer coupons and loyalty programs. “Somewhere down the line, way down the line,” Siwicki writes, “I think making payments via smartphones will catch on, simply because of the central role smartphones are coming to have in people’s lives.”

In that same vein, SAS Institute’s Lori Schafer argued this week at the NRF 102nd Annual Convention & Expo that Apple is in a better position to disrupt mobile payments than current competitors. Quoting Schafer from her session, The Tech Titans’ War for Mobile Dominance – How Amazon, Apple, eBay, Facebook and Google are Shaping Our Mobile World, Lauren Johnson reports at Mobile Commerce Daily:

“‘When Apple adds in NFC, it will have two advantages over everyone else,’ [Johnson] said. ‘First, the iTunes database is huge, with over 400 million people already signed up. Second, the iPod touch and iPads are fast gaining traction as the next generation of cash registers, and a number of retailers are now starting to roll them out to their associates in-store instead of using the traditional cash register. This sets up Apple to potentially own both sides of millions of transactions.’”

Mobile commerce strategies shouldn’t hinge on transaction data

Amy Martinez observed at The Seattle Times this week that retailers are “lukewarm” about integrating mobile commerce into their sales strategies. Citing a new report from Forrester Research, Martinez notes that smartphones only generated $5 billion of the $226 billion e-commerce market in 2012, and because of that, “[r]etailers will continue to invest in mobile strategies, but the bulk of their technology spending in 2013 will be on the basics, such as improving online checkout, product descriptions and the overall user experience, according to the report.”

In a presentation at the National Retail Federation’s annual convention this week in Manhattan, Martinez reports, Forrester analyst Sucharita Mulpuru said that “[r]etailers have been burned getting very, very hyped up over mobile … Even though consumers have these phones, the number of transactions on those phones is still small.”

Responding to Martinez’s piece, Colin Gibbs at GigaOm Pro writes that he doesn’t doubt Forrester’s data, but argues that mobile commerce is more than transactions. Gibbs says the very fact that smartphones are an inferior platform for browsing, price checking and entering or linking to credit card information is the reason retailers need to step up their mobile strategies. He writes:

“That’s why the top priorities for retailers in the mobile world should be building solid mobile websites, establishing relationships with their customers, delivering targeted ads and discounts, and encouraging them to come in to the store or to visit online stores on their PCs.”

Gibbs argues that even though closing mobile transactions remains difficult, “ignoring every mobile commerce strategy is short-sighted and dangerous.”

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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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