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February 20 2014

January 24 2013

Commerce Weekly: Analytics for people, the next big thing in retail

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

New trend in retail customer tracking: Smartphone Wi-Fi

my wifi hotspot is cooler than yours, on Flickrmy wifi hotspot is cooler than yours, on FlickrDan Tynan posted a two-part series (here and here) on IT World this week looking at growing trend of retail Wi-Fi tracking — retailers keeping track of you via your smartphone as you shop, much like online retailers keep track of your movements across the Internet. Tynan explains how they’ll do it:

“When you come within range of a properly configured Wi-Fi access point, it can record the wireless MAC address of your phone — a unique 12-digit number. Every time you pass by, that AP can log that number. … Think of it as Google Analytics for people; instead of measuring Web traffic, they’re measuring foot traffic.”

Tynan takes a look at Euclid Analytics’ software, which works with tracking device systems to help stores gather data on customers, from which aisles they spend time in to how many times they’ve visited the store to which locations they frequent. “[T]hey can even track people who walk by the store every day but never go in,” Tynan writes, “or [know] if more people enter after a window display is changed.” He notes that Euclid gathers data anonymously and in aggregate, storing the MAC address “in a one-way hash, so nobody can go backwards and figure out your actual MAC address,” but that the minute a shopper swipes a credit card, all anonymity is lost, at least as far as connecting a particular phone to a particular purchase.

Once an identity is linked to a MAC address, “all kinds of fun things can happen,” Tynan reports — retailers could text you as you walk by their stores in the mall and offer discounts or coupons to lure you inside, connect your in-store data to your online data for even deeper analysis, or even sell your data to someone else. He explores some of the privacy concerns and scenarios in his first piece and talks with Euclid Analytics director of marketing John Fu for some context in his second piece. Fu says their technology is — purposefully — not as Big Brother as it sounds:

“There are some powerful and potentially scary things you could do with this data if you wanted to, but I want to clarify that we are not doing any of those things. We anticipated these scenarios and came up with ways to prevent them from happening.”

In addition to creating a one-way hash for a customer’s MAC address, Euclid requires retailers to contractually agree “to not combine the behavioral data they collect with information they have about an individual’s identity,” and the company also “salts its data with a ‘statistically insignificant’ number of fictional customers” to further prevent customer identification, Tynan reports. He takes an in-depth look at some real world examples of Euclid’s use in retail locations and their efforts to protect consumer privacy, but also notes that “Euclid is only one of a half dozen companies using different techniques to help retailers track shoppers, most of which don’t bother to tell you.” You can read his complete report at IT World — part one, part two.

Payleven gets investment boost in pursuit of Square-like success

Europe’s Square-like mobile payments platform Payleven announced a new funding round — and a new mystery investor — this week. Ingrid Lunden reports at TechCrunch that “neither the exact funding figure, nor the investor, have been disclosed — except to note that the value is in the ‘high single-digit millions’ of dollars, and that it is ‘largely’ from the new backer.” Along with the funding round announcement, Lunden reports, Payleven also confirmed reports of a group of backers who invested “double-digit millions” last year: New Enterprise Associates, Holtzbrinck Ventures, ru-Net and Rocket Internet.

Lunden says Payleven, which has launched in Germany, the Netherlands, Italy, the UK, Poland and Brazil, still hasn’t disclosed its number of users, but a company spokesperson told her the new funding will be used to build out current markets and to continue Payleven’s international push.

Back stateside, Fast Company’s Austin Carr took a look at what’s making Square successful in the U.S. — and now Canada. Carr writes that part of Square’s success stems from an atmosphere of collaboration geared toward problem solving and a blurring of the lines between engineering and design teams. Square CTO Bob Lee told Carr:

“We’re not just a design company; we’re not just an engineering company. We’re strong in both areas — we need to be. … From an engineering perspective, design is not just about how something looks, but about how something works. We look at reliability, robustness, and performance as features of the design.”

Carr takes an in-depth look at how the company’s teams foster a high level of collaboration through weekly town square meetings, “where everyone from engineers to PR workers can show off their latest projects;” through the design team’s weekly creative reviews, where all work is pinned up and presented gallery-style for all designers to peruse and comment; and through internal education. He also looks at Jack Dorsey’s leadership style and how he manages to make credit card processing, receipts and point-of-sale systems “whimsical and interesting.” You can read Carr’s full report at Fast Company.

NFC’s real role in mobile commerce: Consumer engagement

Mark Bonchek argued this week at Harvard Business Review that the potential for NFC technology in mobile phones goes way beyond payments. “It has the potential to, as no technology before, bridge the gap between virtual and real,” he writes. Bonchek offered up the example of Kraft Foods’ pilot program, which tested consumer responses to an NFC marketing campaign:

“In select grocery stores, small signs were placed on shelves in front of Kraft cheese and Nabisco cookie brands. The signs invited consumers to get recipes, download a mobile app, or share with friends. Consumers could either tap with an NFC-enabled device or snap a QR code — up to now the main technology for linking mobile devices to physical displays. The results were quite remarkable. People were 12 times more likely to tap than snap. Considering that the ratio of QR to NFC-enabled phones is currently about 10 to 1, this means tapping was 120 times more engaging than snapping.”

The level of engagement wasn’t simply the result of novelty, Boncheck reports. Data from the pilot showed that 36% of the people who tapped the sign “converted it into action, whether saving a recipe, downloading the Kraft app or sharing with friends, etc.” Boncheck also notes that consumers who tapped the sign spent 48 seconds engaged in the experience, as opposed to the standard five to 10 seconds of normal brand engagement at the shelf.

Boncheck looks at several advantages NFC wields over current technology and notes that though it won’t happen overnight, “the ability to make the real world clickable holds great promise. … Taps are the new clicks.” You can read his full report at Harvard Business Review.

Photo: my wifi hotspot is cooler than yours by woodleywonderworks, on Flickr

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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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January 03 2013

Commerce Weekly: iPhone NFC rumors return

Happy new year! Here are a few stories that caught my attention in the commerce space recently.

Apple NFC rumors revived

PassbookiPhonePassbookiPhoneWe’ve no sooner outfitted our shiny new iPhone 5s with cases and fancy accessories than rumors of the iPhone 6 have emerged. Matt Brian reports at The Next Web that “Apple has been testing hardware relating to a new ‘iPhone6,1′ identifier, powered by a device running iOS 7.”

There’s also renewed rumors of Apple’s intention to integrate NFC technology into the next iPhone. Mikey Campbell reports at Apple Insider that on December 20, 2012, the US Patent and Trademark Office published a patent application filed by Apple in 2011 “for an ‘Integrated coupon storage, discovery, and redemption system,’ a property covering the receipt, storage and use of digital coupons on mobile device” — basically, what Passbook became this past year. Campbell notes that NFC capabilities also are mentioned in connection with coupon redemption, indicating “that the company is at least thinking about including the protocol in future versions of the iPhone or iPod Touch.”

Joann Pan at Mashable notes the implications such integrated technology could have on retail shopping for consumers and merchants alike. She writes:

“With Apple’s proposed ‘integrated coupon storage,’ patrons will be able to walk into stores and receive notifications about items for which they have coupons. After the transaction is complete, the customer will receive a digital receipt wirelessly. Alerts will also be pushed for coupons with impending expiration dates. The patent also mentions a verification system for coupons and discounts.”

Holiday mobile commerce records are tip of the iceberg

Though the record-setting holiday season is behind us, this is no time for retailers to rest on their respective mobile commerce laurels, says Mobile Marketing Association’s Jack Philbin in a post at Fast Company. Philbin argues that this holiday season was just the “tip of the iceberg of what is sure to become a mobile-dominated shopping experience during the next few years” and that retailers need to think mobile 365 days of the year from here on out.

Philbin offers retailers several “actionable steps,” including expanding the holiday mobile strategy into a year-long strategy with the holiday season as one aspect, and integrating traditional marketing plans into mobile plans, creating one overall strategy. “The lines are blurring between marketing channels,” Philbin writes, “and now more than ever, retailers need to think about how to execute a seamless brand experience — integrating all of consumers’ favorite platforms and channels.”

It’s also time for retailers to “embrace mobile as the shopping companion,” Philbin says — and recent study results indicate he might be right. In separate posts at Internet Retailer (here and here), Bill Siwicki, managing editor at Mobile Commerce, took a look at a two such studies that show consumers are becoming comfortable with their smartphones and are yearning for more shopping integration.

The first, a study of smartphone owners conducted by ad agency Moosylvania, showed that 80% of respondents “want more mobile-optimized product information while they’re shopping in stores.” Researchers also found that 30.1% of respondents research products when away from home, and 12.4% of those do so in stores. They also found that 76% of respondents are comfortable with mobile coupons and that 44% would welcome mobile wallet capabilities. Siwicki also looked at a survey conducted by Perception Research Services International that showed 76% of respondents who own a smartphone use it while shopping; of those, 53% compare prices, 49% read customer reviews, and 48% hunt for coupons or sales.

Mobile wallets: now or never?

Michael Brush at MSN Money took a look at the mobile wallet battle and says if you don’t already have a mobile wallet, you probably will by the end of 2013 — and maybe more than one. Brush looks at the battleground from both consumer and investor perspectives, noting that for consumers, it will change how — and how much — they spend; for investors, the battle is “worth studying because there will be major winners and losers.” LevelUp CEO Seth Priebatsch told Brush, “I think 2013 is going to be the year where mobile payments will happen and there will be a winner, or mobile payments won’t ever happen at all.”

The battle boils down to two goals from the vendor/retailer perspective, says Brush: improved marketing efforts and potential savings in credit card fees. On the marketing front, the “Big Brother-ish” nature of the data collection efforts will likely force providers to tread lightly, Brush notes, but consumers stand to benefit big as wallet competitors fight for adoption. Industry analyst Aaron McPherson told Brush the mobile wallet battle “will be a bloodbath in 2013.”

Brush also outlines each of the current key players, who they are and how they measure up — you can read his full report here.

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November 01 2012

Commerce Weekly: Mobile wallets and NFC get a global partnership platform

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

Vodafone partners up to launch a new mobile wallet platform

Yet another mobile wallet is gearing up to hit the market in 2013. Vodafone announced a partnership with m-commerce company CorFire and digital security company Gemalto to launch the platform in the first quarter of 2013 in Germany and Spain with plans to expand across Europe, according to a report at Bloomberg.

Natasha Lomas at TechCrunch reports that the initial rollout will focus on NFC-equipped Android devices and that the services “will be compatible with the standards chosen by Weve” (formerly known as Project Oscar). According to Lomas, Dr. Jae Chung, CorFire’s president and CEO, noted the platform’s potential in a released statement: “Vodafone’s customer base spans across more than 30 countries, which means our partnership may become one of the biggest, global implementations of NFC and mobile commerce.”

James Wester at Mobile Payments Today reports that Vodafone’s plan for its more than 400 million subscribers around the globe goes beyond the mobile wallet — plans include developing the platform so that third-party service providers can access the subscriber base.

Cashing in on why we buy

Mick Weinstein at PandoDaily took a look this week at a Tel Aviv startup called Commerce Sciences that is looking to cash in on behavioral economics, the science behind people’s shopping behaviors. The company wants to create interfaces for small- to mid-sized companies that provide insights from behavioral economics, predictive analytics and big data analytics to help them better connect with their customers, and in turn convert more sales.

The company already has launched its first product, Weinstein reports. The Personal Bar “is a free, self-service toolbar that sits on an ecommerce site’s footer and pops up coupons, a chat box, and other messages,” he writes. And he notes the first insights into consumer behavior already are emerging:

“… the bar already includes an Ariellian [ref: Dan Ariely] behavioral econ lesson: They’ve found that a little coupon graphic that a customer ‘tears off’ from the toolbar converts far better than a discount code that you need to Control-V at checkout.”

The bar isn’t the endgame, though — it’s a way to start relationships with merchants and collect data, Weinstein reports. He says company founders Aviv Revach and Eyal Brosh are more interested in creating “the brains behind optimizing the online buying experience.” He reports:

“‘This market lacks an entity that sees and analyzes all of the massive activity across thousands of ecommerce sites,’ Revach says. ‘We can integrate all that data and help merchants react to the changes and particularities of customer behavior. The bar is just the beginning — eventually we’ll integrate with the main elements of sites.’”

The timing for such a company to get off the ground may be approaching the tipping point — analysts predict ecommerce and m-commerce to boom in the next few years across the globe, and retailers will be looking for innovative ways to capture consumer attention.

NFC for the iPhone?

All the buzz leading up to the iPhone 5 release on whether or not Apple would bring NFC to the masses ended (for many) in a collective sigh when the phone launched without the anticipated technology. But iPhone fans who long for NFC capabilities might not have to wait for yet another version release of the phone — tech company Flomio has launched a Kickstarter campaign for FloJack, a pocket-sized NFC plug-in device for the iPhone, iPod Touch and iPad.

The campaign is set to run through November 26 and needs to meet or exceed a goal of $80,000. As of this writing, the campaign had raised $14,238. You can check it out here.

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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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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 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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June 28 2012

Commerce Weekly: Is NFC poised for ubiquity?

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

The blossoming NFC ecosystem

iPhone PassbookOne of the holdups to NFC mobile payments, especially in the U.S., is the lack of ubiquity in the technology. This, it seems, is about to change. Last week, Microsoft announced its Windows Phone 8, which includes NFC complete with Wallet Hub, will arrive this fall (The Verge has a nice analysis of the new features and larger plans that may be in store for the phone's NFC use).

This week, 9to5Mac uncovered compelling evidence that the next generation iPhone will include NFC. 9to5Mac writer Seth Weintraub reports that they had "previously been able to pull data from PreEVT iPhone 5,1 and iPhone 5,2 prototypes" but that they'd forgotten one thing: "Further investigation into this hardware code dump leads us to believe that these iPhones also have Near Field Communication controllers directly connected to the Power Management Unit."

Christina Bonnington at Wired took a look at some possibilities for NFC technologies in iPhones, given Apple's WWDC announcement of Passbook coming in iOS 6. She notes that Passbook isn't set up to process payments but points out that NFC could change that:

"In its announced iteration, Passbook would let you load up your Starbucks card with money, for example, and then let you pay for items with barcodes displayed on the iPhone's screen. But NFC could let you pay for that grande macchiato even more easily with just a tap of your iPhone. With Passbook, that tap could also account for any coupons or discounts you've collected. Payments could also be tied with your iTunes account through iOS."

If rumors hold true, the new iPhone should appear some time this fall. Add in the iPhone and Windows Phone 8 to the list of current and expected phones to include NFC and perhaps NFC mobile wallets will get the ecosystem they need to get off the ground.

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 considerations and preparations

It looks as though NFC technology is simmering its way to a boil, and a couple stories this week presented particularly prudent points of consideration given that likelihood. First, Kendra Srivastava at Mobiledia reported on a malware "paycardreader" app designed to allow thieves to "skim the card numbers and dates, along with transactions and merchant IDs" from NFC-enabled phones. The app was built by security researcher Thomas Skora, who presented it at Integralis Security World 12 in Germany as a warning to the dangers of mobile banking. As a demonstration, the app hacked an NFC-based PayPass Mastercard at the show. Srivastava reports:

"Skora insists the app is meant 'only for technical demonstration.' ... Google promptly removed the paycardreader from its Play store, but the source code is now widely available on open-source code provider GitHub."

Another story reminded readers that NFC technology has the potential to disrupt more than just payment sectors — it has the potential to reach across industries at fast clip, and businesses should be prepared. Derek du Preez at Computerworld UK reported that SITA chief technology officer Jim Peters told attendees at the Air Transport IT Summit in Brussels "they need to be prepared for the proliferation of near field communications (NFC) technology ..." Peters said at the summit that "[b]oarding passes are going to be the next step with this technology" and that the industry "need[s] to get ready, this is coming. ... By the end of the year the majority of smartphones that you go and buy will have NFC on them."

The mobile commerce revolution reaches Thin Mints and Tagalongs

A white paper (PDF) recently released by TNS Global declared that mobile commerce was at its tipping point. The report says mobile banking and mobile wallet services are getting ready to "surge worldwide" as consumers look past security concerns and opt for convenience. Citing The Mobile Life 2012 study, also being conducted by TNS Global, the report states that 50% of the phone owners worldwide are either using mobile banking or are interested in it and that 45% "show the same level of enthusiasm for making payments using their phone."

The trends indicated by the study appear to be playing out in practice. John Milliken, managing director of Mobile Money Network, wrote at The Guardian this week that mobile devices are causing a "revolution" in the retail industry "on a par with the introduction of plastic payments in the 1950s or the launch of the internet and e-commerce in the early 1990s." Milliken says mobile represents "a fundamental shift in consumer behaviour and retailers have a unique opportunity to move quickly and take advantage of the true power of mobile."

Chantal Tode at Mobile Commerce Weekly also took a look at the effects of mobile and how they're transforming in-store shopping. She writes that the much discussed practice of "showrooming" is just the tip of the iceberg, that "mobile in-store engagements at scale are coming." Tode points to Target's recent nationwide rollout with Shopkick and says that mobile can be used to drive in-store sales, "which is why it is imperative for merchants to have an integrated mobile commerce site."

If there's any question as to how mobile is affecting the retail and payment spaces, one needs to look no further than the Girl Scout cookie drive. In a separate post this week at Mobile Commerce Daily, Tode reports that 30 Girl Scout councils partnered this year with a mobile payments company to enable the troops to accept credit card payments via swipe machines on mobile phones. The ability to accept mobile cookie payments resulted in nearly quadruple the sales year over year.

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May 31 2012

Commerce Weekly: NFC delays give Bluetooth an opening

Here's what caught my attention this week in the commerce space:

Apple, Bluetooth and the path of least resistance

Bluetooth LogoThe road to mobile payments, especially in the U.S., is mired with speed bumps in terms of consumer security concerns with NFC and the fact that the technology isn't yet in the hands of enough consumers and retailers to get a foothold. The solution, however, may not be expanding a new technology, but rather opting to not reinvent the wheel.

Recent speculation indicates this may be the tactic adopted by Apple, which some have argued is poised to disrupt the space. ResearchFarm analyst Pablo Saez Gil told Mary-Ann Russon at ComputerworldUK that Bluetooth technology makes more sense for Apple than NFC. He said Bluetooth would work in a similar fashion to NFC tags, but would allow for "long-distance connections between devices of up to 50m." Russon observes additional inherent advantages:

"The idea is that Apple could introduce an app that enables the Bluetooth transaction but relies on the cloud. This would completely negate the need for NFC, cash registers or even credit cards and thus allow retailers and SMEs to bypass costly hardware upgrades."

Making mobile payments more ubiquitous using existing technology not only would help bypass the technology growing pains, but using technology that consumers are already comfortable with would largely bypass the learning curve and may help alleviate security concerns. Marguerite Reardon at CNET took a look at the NFC issues hindering Google's Wallet and noted an additional problem with NFC that could be bypassed with Bluetooth: politics. A mobile payment company CEO told Reardon that with NFC payments, it all comes down to "who owns the customer." With the rapidly expanding competition in the fledgling NFC payment space, opting for a path of less resistance with Bluetooth technology may very well end up being the mobile payment solution holy grail.

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 is too slow for the London Underground

Discussion of NFC's growing pains wasn't isolated to in-store mobile retail payments this week — it seems the technology is having growing pains in the transportation payment space as well. IDG News' Mikael Ricknäs took a look at the situation in a post at PCWorld. He reports:

"NFC still remains a technology that is just around the corner — a corner that never seems to come, according to [Shashi Verma, director of customer experience at Transport for London (TfL)]. For any contactless technology to work in the London Underground, read speed has to be faster than 500 milliseconds, he said [at the Open Mobile Summit conference in London]."

The speed was achieved with an earlier model Nokia phone, Ricknäs reports, but Verma said that a shift in standards in 2008 created a physical hardware gap that slowed down the read speed. Verma also said that NFC has user issues as well: "The technology is still too difficult to use for ordinary consumers and if its proponents want NFC to become a mass-market technology worldwide it has to become less fidgety to use."

PayPal signs on more partners, launches a new payment solution

PayPal announced 15 new national (U.S.) retail partners for its mobile payment solution this week, including Abercrombie & Fitch, Barnes & Noble, JC Penney, and Office Depot. The press release noted the company's point-of-sale beta test with Home Depot has been successfully rolled out to every Home Depot store across the U.S. Part of the company's mobile payment success thus far can be attributed to its ease of use for consumers and merchants as well as on its cost-effectiveness for retailers.

Consumers will be able to pay at participating stores with a physical PayPal Card connected to their PayPal account or via their phone number with a PIN. As a post at AdAge points out, PayPal ultimately hopes to expand their mobile payment solutions to better engage consumers with loyalty programs as well as with discounts and coupons while shopping.

PayPal also rolled out a mobile payment option in the U.K. this week: the PayPal In-Store App. The app generates a unique barcode for a purchase that retailers can scan for payment.

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May 17 2012

Commerce Weekly: Another mobile wallet is on the way

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

Isis prepares its mobile wallet rollout

Isis-Mobile-Wallet.pngIsis Mobile Wallet had some big news this week. First, American Express officially got on board with the mobile payment platform. Damon Poeter at PCMag notes the announcement was something of a formality, as American Express joined the Isis Mobile Commerce Platform last year along with Visa, MasterCard, and Discover, but he writes: "... the credit card company did offer up specifics on which member accounts will be eligible for the Isis Mobile Wallet — namely, the U.S. Consumer, OPEN Small Business, and Serve cards."

On the heels of that announcement, Isis announced its initial rollout in Austin and Salt Lake City will begin this summer. According to the press release, the first of its local merchant partners includes "hundreds of merchant locations in both Austin and Salt Lake City," from bookstores to bakeries to pizza and burger joints. In addition to local partners, several national partners also were announced, including Aeropostale, The Coca-Cola Company, Champs, Dillard's, Foot Locker, Jamba Juice and Macy's. A list of partners can be found in the press release.

This is a step forward in the U.S. for mobile commerce, but in a post at Wired, Nathan Olivarez-Giles writes: "As for which smartphones will actually work with Isis, the mobile payments consortium is keeping mum." He also says not to "feel too bad for Google Wallet," Isis' main rival, as many of Isis' national partners have already signed on with Google Wallet.

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.

Canada gets a mobile wallet

Canadian banks recently agreed on a new set of guidelines that support secure transactions using NFC chips. In a post at The Globe and Mail, Grant Robertson and Rita Trichur report that the new guidelines will "change the way Canadians pay for goods at retailers across the country" and will "open the door for partnerships between financial institutions and telecommunications companies to embed credit card and debit card information inside smartphones."

That door didn't need to be open long — almost immediately, Rogers Communications and Canadian Imperial Bank of Commerce (CIBC) announced a partnership to launch Canada's first mobile wallet. Alastair Sharp and Cameron French at Reuters report that the wallet will be available later this year. The mobile commerce technology situation in Canada is a step ahead of most Western countries, including the U.S. — as Sharp and French point out, Canadian retailers have broadly adopted the electronic reader equipment required to interact with NFC chips.

Rob Bruce, president of communications for Rogers, told Reuters "60 percent of Rogers' postpaid customers use a smartphone and that some 300,000 of those are already NFC-enabled." Bruce speculated that mobile wallets will be as common as cameras on smartphones within a few years. Robertson and Trichur at the Globe and Mail also note that "[s]ince most consumers upgrade their cellphones every 18 to 20 months, it is estimated that the majority of Canadians will have NFC-enabled smartphones by 2014."

Benefits of sharing may trump NFC privacy concerns

According to research conducted by Catapult, technology isn't the only holdup for U.S. mobile wallet adoption. EMarketer reports that "[91% of respondents to the Catapult survey] said they would worry about maintaining their privacy, including two-thirds who would be 'very concerned' about this."

Consumer privacy concerns may have a lot to do with the newness of the technology, however, and once consumers use it, they might find it more useful and convenient than worrisome. Kit Eaton at Fast Company argues that sharing your identity and a touch of personal information via NFC will lead to discovery and finding things you never knew you wanted. He says such sharing allows businesses to better understand and serve consumers:

"Picture a music festival in five years' time when instead of a wristband you'll wave your smartphone at a wireless portal, and an app you've pre-set to share particular pieces of personal info (perhaps age, gender, and so on) communicates with the festival's computer. In return it sends a promotional tweet and you'll get a free ringtone to promote the upcoming single of the band you're listening to or an invite to a streaming music service where the band has created a playlist of artists you might like."

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May 04 2012

Publishing News: Nook gets Microsoft, and soon NFC

Here are a few stories from the publishing space that caught my eye this week.

Microsoft enters the battle of the publishing tech giants

NookLogo.pngAfter hinting in January that something might be in the works for the Nook, a deal between Microsoft and Barnes & Noble was announced this week. Reuters reports:

"Microsoft Corp will invest $300 million in Barnes & Noble Inc's digital and college businesses ... Microsoft will get a 17.6 percent stake in the new unit, while Barnes & Noble will own about 82.4 percent ... The business, whose name has not yet been decided, will have an ongoing relationship with Barnes & Noble's retail stores."

Much discussion is flurrying about.

Felix Salmon has an interesting analysis at Wired, writing that "the news does mean that Barnes & Noble won't need to constantly find enormous amounts of money to keep up in the arms race with Amazon. That's largely Microsoft's job, now." He also points out that the real winners here are readers: "... we finally have a real three-way fight on our hands in the e-book space, between three giants of tech: Apple, Amazon, and Microsoft. And that can only be good for consumers."

Publisher Thad McIlroy offers an initial analysis of the deal, likening the "marriage" to "two losers stumbling to the altar without bridesmaids or witnesses," and a subsequent in-depth look at just what the $300 million exchange means to both sides:

"I know that Microsoft gained in part because the press release states that the two companies 'settled their patent litigation.' To merely settle patent litigation gives you no idea of who the winner is; the settlement can take myriad forms.

However, the sentence in the press release continues, 'moving forward, Barnes & Noble and Newco will have a royalty-bearing license under Microsoft's patents.' That means Barnes & Noble has agreed to pay Microsoft for some or all of its previously disputed patents via this new company (currently called 'Newco'). And that means Microsoft managed to gain the upper hand in these negotiations." [Link added.]

Microsoft analyst Mary Jo Foley over at ZDNet took a look at what the partnership could mean for future devices: a Windows-powered e-reader, perhaps? She reports that during a press/analyst call, "[Microsoft President Andy Lees] mentioned a few times that Microsoft is positioning Windows as key to the future of reading."

O'Reilly GM and publisher Joe Wikert argues this isn't about ebooks at all, suggesting that "Microsoft should instead use this as an opportunity to create an end-to-end consumer experience that rivals Apple's and has the advertising income potential to make Google jealous." He also wonders if Microsoft might influence B&N to deeply discount Nook prices with a two-year content purchase requirement, similar to what the company just did with the Xbox.

In any case, it looks like Wikert's wish for an end-to-end UX might already be in the works. In an interview about the Microsoft deal at CNN Fortune, Barnes & Noble CEO William Lynch says plans are underway to improve offline-online integration to bring a richer experience to customers:

"We're going to start embedding NFC chips into our Nooks. We can work with the publishers so they would ship a copy of each hardcover with an NFC chip embedded with all the editorial reviews they can get on BN.com. And if you had your Nook, you can walk up to any of our pictures, any our aisles, any of our bestseller lists, and just touch the book, and get information on that physical book on your Nook and have some frictionless purchase experience. That's coming, and we could lead in that area."

In response to whether NFC functionality will roll out this year, Lynch said, "Maybe ..."

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Amazon loses shelf space

Target decided this week that it would cease carrying the Kindle and its accessories. The Verge reports that "the company is going to stop carrying the line of products due to a 'conflict of interest'" and that "[c]ertain accessories will remain in stock, but shipments of Kindles themselves will cease as of May 13th." Exactly why this decision was made remains a bit unclear, though speculations are being bandied about.

The LA Times quotes a Target spokeswoman with the official benign company line: "Target continually evaluates its product assortment to deliver the best quality and prices for our guests," but then points to a New York Times story with a much more telling tidbit:

"'What we aren't willing to do is let online-only retailers use our brick-and-mortar stores as a showroom for their products and undercut our prices,' Target executives wrote in a letter to vendors, asking them to think of new pricing and inventory strategies, according to a note that Deborah Weinswig, a Citi analyst, sent to clients."

Laura Hazard Owen at GigaOm covers a couple possible reasons for Kindle eviction. Given the note quoted in the New York Times, the most likely seems to be that Amazon tried to negotiate new terms that Target just couldn't accept, or vice versa. Owen notes a couple of other important points to consider: Target will continue carrying other brands of ereaders and accessories, including the Nook, and that Apple is set to begin a mini-store test program with Target.

Also notable: Thus far, I haven't seen Amazon comment on the situation.

Is the end of ereaders and ebooks nigh?

The battle for King of the Ereaders may soon come to an end — not because one of tech giants wins the war, but because ebook formats lose out to the web and HTML5. So argues Jani Patokallio, publishing platform architect at Lonely Planet, in a blog post.

He says it all boils down to publishing rights and publishers opting "to circle wagons, stick their fingers in their ears and pretend digital is print." He argues that "in the print publishing industry, publishing rights for different countries and languages are both standard practice and a big deal," but these same agreements don't make sense for digital publishing. They are, in fact, hindering the customers' ability to purchase and read books:

"Customers today are expected to buy into a format that locks down their content into a silo, limits their purchasing choices based on where their credit card happens to have been registered, is designed to work best on devices that are rapidly becoming obsolete, and support only a tiny subset of the functionality available on any modern website. Nonetheless, publishers are seeing their e-book sales skyrocket and congratulating themselves on a job well done."

Patokallio says that "[o]n the Web, the very idea that the right to read a website would vary from country to country seems patently absurd," and that ebooks have an obvious replacement:

"The same medium that already killed off the encyclopedia, the telephone directory and the atlas: the Web. For your regular linear fiction novel, or even readable tomes of non-fiction, a no-frills PDF does the job just fine and Lonely Planet has been selling its travel guidebooks and phrasebooks a chapter at a time, no DRM or other silliness, as PDFs for years now. For more complicated, interactive, Web-like stuff, throw away the artificial shackles of ePub and embrace the full scope of HTML5, already supported by all major browsers and usable right now by several billion people."

Patokallio's post is a must-read, and there were a couple indications this week that he might be on to something. First, "[t]he Financial Times is preparing to kill off its iPad and iPhone app for good, signalling its final conversion from executable-app to web-app publishing." Second, in a post at Wired regarding the Microsoft deal with B&N, Felix Salmon says: "... over the long term, we're not going to be buying Kindles or Nooks to read books. Just as people stopped buying cameras because they're now just part of their phones, eventually people will just read books on their mobile device, whether it's running Windows or iOS or something else."

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May 03 2012

Commerce Weekly: Mobile payments and the consumer experience

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

Don't forget the mobile payment UX

PayPalSquareLogo.jpgCompetition in the mobile payment space is heating up, as Square's payment pace closes in on PayPal's, according to a report at Bloomberg. The report highlights a recent move by Square to lure in merchants: "The San Francisco company is making cash from sales before 5 p.m. on any day available in merchants' accounts on the next business day, compared with as many as five days out for other processors."

The real endgame, though, will be adoption by consumers, and Lauren Goode over at All Things Digital addressed the battle to control digital wallets from a UX perspective. Goode reports on her experience shopping around San Francisco and New York, paying either with Pay with Square or PayPal's mobile app. She says both apps are easy to use and that the biggest issue for both was the lack of merchants accepting payments of this type. Another issue she mentions caught my eye, however — the execution inconsistencies:

"Square has been touting the idea that this app actually allows for 'hands-free' payments ... One shop I bought coffee at didn't see my name right away, even though I had turned on the tab in the iPhone version of the app. I tried to buy another item using the app on a Samsung Galaxy Nexus Android phone, and my name didn't appear at all on the list of customers in the store.

But at another downtown coffee shop I was able to walk in, place my order and say, 'Charge it to Lauren Goode' — without taking my phone out of my pocket — and the transaction was completed in seconds."

And regarding a beef jerky purchase using PayPal's app:

"Since data service on my phone happened to be particularly bad in that area, I initially had trouble dropping the digital pin within the app that's supposed to let the merchant know I was there. The merchant also had to reboot his phone once to process the payment on his end. But once I switched over to Wi-Fi, I had four options for paying him ..."

Goode also reports on location-based features and the importance of merchant-provided content — her entire account is well worth the read.

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.


E-gifting and mobile commerce get social

Social gifting is gearing up to be one of the next big mobile commerce booms, according to a report at Reuters. The post focuses on the launch of Wrapp, a Swedish-based app startup, and highlights the blurring lines of online and brick-and-mortar commerce worlds. It describes the app:

"It allows Facebook friends to buy each other gift cards from participating retailers either individually or by teaming up, which they can store on their mobile devices and redeem either online or inside physical stores. Retailers like it because there is little marketing cost and because customers often end up buying more once they are inside the store."

Wrapp's CEO Hjalmar Winbladh told Reuters, "Brick-and-mortar retailers are all looking for new, more efficient ways to drive sales into stores without diluting their brands ... we wanted to really see how retailers can leverage the megatrends of smartphones and social networks."

TheFind also launched a social commerce app this week. It's called Glimpse, and it's a Facebook app that, according to the press release, "uses Facebook Like data from across the web to instantly personalize and curate a stream of fashion and design items that are trending, tailored to the tastes and preferences of an individual and their community of Facebook friends."

Ryan Kim at GigaOm calls the shopping discovery app a Pinterest rival and reports: "TheFind's CEO Siva Kumar told me TheFind has been working with Facebook for some time to bridge the two data sets, mapping a user's likes to products, their taxonomy and a user's profile. Now, when a Glimpse user likes a page, the service can determine what product the URL is referring to, can pull up the most recent availability and pricing data and also fit it into different styles and trends."


Move over smartphones, NFC to unlock experiences for Nook users

In an interview at CNN Fortune, Barnes & Noble CEO William Lynch talked about the future of the Nook and the recently announced partnership with Microsoft. In talking about opportunities in offline-online integration, Lynch offered an example of how B&N will improve customers' experiences:

"We're going to start embedding NFC [near-field communications] chips into our Nooks. We can work with the publishers so they would ship a copy of each hardcover with an NFC chip embedded with all the editorial reviews they can get on BN.com. And if you had your Nook, you can walk up to any of our pictures, any our aisles, any of our bestseller lists, and just touch the book, and get information on that physical book on your Nook and have some frictionless purchase experience. That's coming, and we could lead in that area."

Lynch told Fortune the NFC experience could appear as early as this year.

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April 19 2012

Commerce Weekly: Facebook's shopping spree continues

You might have noticed I'm not David Sims, who has been writing this weekly payments column since its inception. David's talents now are required elsewhere, and I am delighted to have the honor of highlighting news from the payment space for you going forward. And now, onto the commerce stories that caught my eye this week.

Facebook buys into e-commerce

Tagtile.pngContinuing its startup shopping spree, Facebook late last week acquired Tagtile, a customer loyalty and direct marketing startup that blends social engagement for the consumer with custom direct marketing for the retailer. In a recent post for ZDNet, Eileen Brown noted that with its pending IPO, Facebook will need to look beyond ad revenues to satisfy shareholders:

"Ad revenue brings in over 83 per cent of the $3.71 billion total revenue reported. The potential for this revenue stream to fail is just too great ... After IPO, Facebook must diversify its revenue streams. And the only way it can currently do this is through online games and e-commerce."

This latest acquisition is a clear move in the e-commerce direction. Emil Protalinski at ZDNet described how Tagtile works:

"You walk into a store, tap your phone against the Tagtile Cube ... and you get discounts or rewards. Customers have to first download the Tagtile app ... which pushes targeted marketing material to their smartphone based on stores they visit. The Cube meanwhile provides data to help businesses pinpoint marketing efforts that work."

"Data" is the key word there — if Facebook has anything to sell, it's data, and if Tagtile has an organized system to manage and analyze consumer data, there's no need to reinvent the wheel. Brown pointed out in a later post that "[Facebook] needs to be able to mine its data stores to identify trends in customer spending to sell on to its business partners ... [It] needs to be able to bundle a solution to sell to brands who want to tap into Facebook's store of data for closer customer connections."

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.


Apple is ripe to disrupt the payment space

Jason Calacanis (@jason) argued over at Launch that "Apple will become a trillion-dollar company based not on iPads and Apple TV, but payments." His argument follows the line of why Apple (and Amazon, for that matter) are so successful: convenience and ease of use. Not to mention, Apple likely already has the data:

"Buying apps is easy and we do it all day long — on iOS at least — because our credit card number is already in the device ... Buying on Amazon is easy and we do it all month long — because our credit card number is already stored ... The person with hundreds of millions of stored credit cards wins big. There are only two people on the planet who have stored over a hundred million active credit card numbers that I can think of: Apple and Amazon.

One is in commerce and one isn't — yet."

There has been much speculation (going back a couple of years) about when and how Apple will enter the mobile payment space, but many agree the disruption that will occur in the payments space when it does happen will be profound. Likening Apple in the payments space to a "PayPal on steroids," an analyst told Computerworld in January that "[Apple has] 160 million users with digital wallets in iTunes accounts. They don't have to do anything other than to NFC-enable their phones."

Calacanis points out the flipside to that — Apple not only could corner the payments market, but also further secure its place in the smartphone market:

"Start doing the math and it gets scary: Apple would have massive margin, and vendors who didn't accept iPhone payments would be at a massive disadvantage the same way folks who didn't take credit cards were in the 70s and 80s."

His piece is well worth the read.

The future of money is mobile

Two surveys and a study this week shed some light on the current state of mobile money and what the future may look like. E-commerce company RichRelevance conducted a study of 4.4 billion mobile shopping sessions that took place between April 2011 and March 2012. As pointed out on Payments.com, the study found that "shoppers on their iPads account for 89 percent of all dollars spent through mobile shopping sessions." You can view the study infographic here.

RichRelevance screenshot
Click here to see the entire infographic.

And though, based on the graphic above, it seems people are becoming more comfortable purchasing TVs with their iPads, a survey (PDF) conducted by the Federal Reserve showed they're a bit more reluctant to conduct their banking via mobile devices. Ann Carrns at the New York Times took a look at the study and reported that "many consumers still don't see the need for mobile banking, and many also are skeptical of the level of security around banking with their phone." She also noted a statement made by Sandra F. Braunstein, director of the Fed's division of consumer and community affairs, to the Senate banking committee in March: "Specifically, consumers expressed concerns about hackers gaining access to their phones and exposing their personal financial information." You can view the full Federal Reserve survey report here (PDF).

A survey conducted by Elon University's Imagining the Internet Center and the Pew Research Center's Internet & American Life Project found that, regardless of any current fears or hesitations, the future of money is definitely mobile. In answering "What is the future of money?" the survey found that 65% of 1,021 "Internet experts and other Internet users" agreed with this statement:

"By 2020, most people will have embraced and fully adopted the use of smart-device swiping for purchases they make, nearly eliminating the need for cash or credit cards. People will come to trust and rely on personal hardware and software for handling monetary transactions over the Internet and in stores. Cash and credit cards will have mostly disappeared from many of the transactions that occur in advanced countries."

You can view the full survey report here.

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March 08 2012

Commerce Weekly: An app to end tab walkouts

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

Tabbed Out connects check-ins with payment

For every one of us who's ever had a hard time catching the server's eye so we can make a hasty exit from the bar, here's the app you've been waiting for. Tabbed Out (available on Android and iOS) lets you check in and open a tab at restaurants and bars. When you set up the app, you link your credit card to it, so checking in delivers that info to the merchant's point-of-sale system. When you want to check out, you can do it on the app, even leaving the tip there instead of on the wet table. That's good for the merchant: There's no chance of getting walked out on, even if the patron leaves in a hurry or deletes the app.

Tabbed Out screens

It's also good for the patron: Not only does it allow you to flee when the urge strikes, but it might save you a trip back the next day. Every bar has a drawer full of abandoned credit cards, tabs opened by good-spirited folks early in the evening who, by the time they left, were too tipsy to remember to collect them on the way out. Do the same with Tabbed Out and the merchant can close the tab — and you don't have to return to the bar the next day to pick up your plastic.

The app offers some of the usual benefits we've grown to expect from a mobile check-in app — allow it to know your location, and it will also tell you what's nearby. Well, eventually it will. As of this week, it's only available at 450 locations in 34 states. Starting this weekend, some of those locations (the ones in Austin, Texas) will begin accepting PayPal as a payment option, too. A spokesperson for Tabbed Out says the company plans to make the PayPal option part of its standard offerings as it continues to roll out nationwide. So, this is another foothold for PayPal in the real world: Now you can use it to charge supplies at Home Depot, then pay for that brew you buy to reward yourself at the end of the day.

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.

Square coming to NYC taxis

An iPad using Square as a cash register Square's back in the news this week, with an upgraded cash register app (timed to coincide with the new iPad announcement) and more details on its rollout to New York City taxis. The iPad cash register isn't exactly new: Square has been pushing it for more than a year, and Cult Of Mac did a nice little round up of nifty iPad holders back in January 2011. But the company has relaunched the app and its integration with Card Case, the buyer's app that lets you run a tab using just your name at Square-accepting retailers (if you can find one).

Bigger news may be that, as The New York Times reports, Square will begin a pilot program in 30 NYC taxi cabs, with iPads mounted where those little TVs are now. (They better bolt them in pretty good!) The big innovation here, at least for the rider, is that you can swipe your card anytime during the ride. Then just sign the screen with your finger and you can hop right out at your destination; no more waiting to sign a credit-card receipt. Cabbies get something out of it too — faster payments and a silent iPad instead of a noisy TV with looped audio.

Despite these innovations, anyone who's been excited watching Square's development has probably also felt the disappointment that goes along with not seeing it used … well, just about anywhere. Dan Frommer, the tech journalist who blogs his own news at SplatF, certainly feels that disappointment. Still, he's enough of an enthusiast to review the company's releases over the past year of its daily processing volumes. While they're still a drop in the ocean compared to more visible options, like credit cards and even PayPal, Square seems to be headed in the right direction, and on a steepening curve that has reached $11 million a day. Considering the few businesses that show up on my Card Case app right now, that's an impressive number of lattes, massages, and farm-fresh produce.

iWallet is coming

While the rest of the Apple-lovin' world focused on the details of the new retina-display 4G iPad, payment geeks were poring over the details of a patent released Tuesday describing features of a mobile wallet to be used in some future version of the iPhone. Patently Apple reported that, while we've seen a number of patents published over the past year dealing with NFC communication and transactions, this patent details credit-card transaction rules, including a note that credit card companies will send statements (or at least receipts) directly to a buyer's iTunes account. "The iWallet project just became a little more real today," PatentlyApple noted.


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If you're interested in learning more about the commerce space, check out DevZone on x.com, a collaboration between O'Reilly and X.commerce.


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Reposted byRK RK

February 03 2012

Top stories: January 30-February 3, 2012

Here's a look at the top stories published across O'Reilly sites this week.

What is Apache Hadoop?
Apache Hadoop has been the driving force behind the growth of the big data industry. But what does it do, and why do you need all its strangely-named friends? (Related: Hadoop creator Doug Cutting on why Hadoop caught on.)

Embracing the chaos of data
Data scientists, it's time to welcome errors and uncertainty into your data projects. In this interview, Jetpac CTO Pete Warden discusses the advantages of unstructured data.

Moneyball for software engineering, part 2
A look at the "Moneyball"-style metrics and techniques managers can employ to get the most out of their software teams.

With GOV.UK, British government redefines the online government platform
A new beta .gov website in Britain is open source, mobile friendly, platform agnostic, and open for feedback.


When will Apple mainstream mobile payments?
David Sims parses the latest iPhone / near-field-communication rumors and considers the impact of Apple's (theoretical) entrance into the mobile payment space.



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February 02 2012

Commerce Weekly: The return of iPhone NFC rumors

Here are some things that caught my eye in the news this week.

When will Apple mainstream mobile payments?

AppleNow that everyone's iPhone 4S has a few dings on it and we've all grown bored flirting with Siri, our curiosity naturally turns to iPhone 5 and what gifts it will bequeath on mankind. Rumors of NFC (near-field communication, which lets phones pay with wireless technology), are at the forefront again, just as they were before the 4S arrived. As far back as August 2010, when Apple hired NFC expert Benjamin Vigier as its product manager for mobile commerce, expectations have been high that the next iPhone would include wireless payment. That was two versions ago; we must be getting close.

Seth Weintraub wrote this week on 9to5mac that a developer he met at MacWorld was building NFC into the next version of his app because Apple's iOS engineers are "heavy into NFC." Over on Fast Company, Austin Carr looked for clues in his conversation with Ed McLaughlin, who leads emerging payments at MasterCard. When Carr pressed McLaughlin for details on which handset makers were developing phones that work with MasterCard's contactless payment system, he didn't mention Apple by name but said he "didn't know of any handset maker out there who wasn't working to make their phones PayPass ready."

Why do we read these tea leaves? There are a few other NFC phones out there already, pushing the far end of the envelope. But Apple is much more significant, as Carr points out, thanks to its:

"... magical ability to transform whole industries. No one paid for music digitally before Apple unveiled iTunes; virtually no one listened to MP3 players, or carried smartphones, or played with tablets before Apple entered the markets."

Even more so than with previous trends, an enormous captive audience awaits the moment when Apple will introduce it to mobile payments. Scot Wingo notes, in a very good summary of the state of mobile commerce on Seeking Alpha, that Apple has "something like 250 million credit cards on file" in the iTunes store. Although only a fraction of those will buy the iPhone 5 in its first months out, they are sure to be customers who are already comfortable buying things through Apple's interface.

I think the biggest and best surprise will be more than just the date when iPhones ship with NFC, but rather how Apple presents a mobile wallet interface. When you think of how iTunes presented a better way to buy digital music, and when you compare the customer experience in Apple's retail stores with what you find almost anywhere else, you have to acknowledge Apple's genius in what we might call the transaction interface. Its programming efforts up front seem as likely to mainstream mobile commerce as any programming that it does behind the scenes to make those transactions occur.

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.


What PayPal is learning at the point of sale

PayPal's point-of-sale (POS) trial with 51 Home Depot stores is rolling out to Office Depot stores, too — cautiously, according to this Reuters story, which quotes an Office Depot executive saying "there are still some rough spots in that experience." The executive didn't say whether those rough spots had to do with the technology, the way customers are using it, or just the basic unfamiliarity with it. Regardless, the novelty presents something of an opportunity for PayPal, says Anuj Nayar, PayPal's chief spokesperson. "Retailers are not technologists by nature," Nayar told me in a conversation last week. "They have to work and sell in this multi-channel environment, where increasingly the differentiator is based on technology." But keeping up with the evolving technology shouldn't be the retailer's job, Nayar says. PayPal, of course, wants to provide a commercial ecosystem — as Nayar calls it, "a one-stop tech partner for retail."

PayPal at a HomeDepot point of sale terminalPayPal had those capabilities on display at the National Retail Federation show last month, showing the various ways it is enabling payment at the point of sale. PayPal aspires to go beyond the concept of a mobile wallet in a phone; it wants to offer a "wallet in the cloud" that lets consumers make purchases with just their mobile number and a PIN — no card or phone needed. No doubt, the trials at Home Depot will shed light on just how comfortable consumers are with this idea. So far, Nayar says, it's too early in the trial to share any of those learnings.

Nayar did share a finding from PayPal's conversations with consumers and retailers about how they want to use mobile commerce: You need to get beyond not only the friction that keeps people from using technology, but also guard against any social stigma that could arise. "For example, when I go to get coffee in the morning, if I get there and see there is a 20-minute wait, I can't wait for that. That retailer has lost a customer because of a friction point. So how do you reduce that friction? Maybe it's giving people the ability to order the coffee over their mobile before they get there? ... But we tested that, and you know what we found? People don't like to jump the line. They didn't like the idea of coming in and looking to everyone in line like they were getting to skip the line. So, maybe you need a separate line and register, a PayPal Express line or something."

In other words, we want convenience, but not at the expense of looking like we're getting special treatment. No doubt, PayPal will learn more in the coming trials, which are ramping up quickly: The company wants to be at 2,000 points of sale by the end of March.

Square hits the hustings

Square picked up a fresh round of publicity this week when word broke that staffers from both the Obama and Romney campaigns were using its plug-in dongle card reader to collect political donations for their candidates.

Obama campaign spokesperson Katie Hogan told Nick Bilton of The New York Times that the dongles were being shipped out to campaign workers across the country. The Obama campaign also hopes to create a donation app that works in conjunction with Square dongles so that any supporter can collect contributions with or without the support of the local campaign organization. All donations would obviously go to the campaign — minus the 2.75% transaction fee that Square keeps from every transaction.

The Romney campaign's digital director Zac Moffatt said the Republicans would also begin using Square as soon as this week, but he cautioned they want to make sure that using Square doesn't break any rules. "The challenge on this sort of thing is never with the technology, it's with the compliance. We're making sure everything we're doing follows fund-raising rules and is compliant with the FEC."

Although DC is generally slow to embrace new technologies, I have a hunch that tech that makes it easier for candidates to collect money will find a swift and warm welcome.

Got news?

News tips and suggestions are always welcome, so please send them along.


If you're interested in learning more about the commerce space, check out DevZone on x.com, a collaboration between O'Reilly and X.commerce.


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December 15 2011

Commerce Weekly: Daily Show skewers freemium CEO

Here's what caught my eye in commerce news this week.

Daily Show corners gaming CEO on freemium

Poor Rizwan Virk. The co-founder and CEO of GameView Studios thought he was going to be featured as a new media visionary whose product (social games) contribute to a thriving virtual economy while the real one staggers on through an endless, grinding downturn. Instead, he found himself being skewered by Daily Show correspondent Aasif Mandvi, who accused him of playing off children's emotional immaturity and propagating a business model that looked a lot like drug dealing. Fame, like the Daily Show's producers, plays by its own rules. Here's the segment:

The sneak attack on Virk centered around GameView's popular TapFish, which features a virtual aquarium where players feed virtual food to virtual fish. The game is free, but as with all freemium games, a small percentage of players choose to buy virtual goods (food, fish, accessories) to enhance it. Virk touted the model in the interview as a new approach that allows more people to play the game: "Traditionally, you had to go to a store and buy a $60 cartridge to play. In this new model, you can play games for free."

Mandvi then switched gears and reported on a family in Montpelier, Vermont, (though it's unclear whether this was a real family or actors) where the kids boasted about maxing out the dad's credit card buying virtual fish and fish food on an iTunes account. B-roll showed someone purchasing $99.99 of virtual fish — though Virk says most of the game's actual purchases are for less than $2.

Virk looked equal parts annoyed and confused as Mandvi accused him of pushing a model that lured people into the game and then exploited their addiction. "You provide a product, the first one is free," Mandvi said. "And then as they get accustomed to your product, the price rises. So you're a drug dealer." He then went on to accuse Virk of targeting kids as the dupes, exploiting their "undeveloped frontal cortex" and their desire to keep the fish alive at any cost.

Virk defended himself in a blog post the next day, saying he felt tricked because the Daily Show said it was producing a segment on the virtual goods, and Mandvi's "drug dealer" comments came near the end of four hours of recording. In the post, he pointed out that most purchases are for much less than the one shown during the interview and that all purchases require the buyer to enter their iTunes password. But of course, far fewer people will read his post than see the Daily Show bit.

The report was an unusual attack on the increasingly popular freemium model, which, as Flurry Analytics pointed out last summer, has become the dominant model for popular mobile games. Stories of kids overspending appear rare and anecdotal. I took a small survey on Facebook and Twitter for this post, asking parents how many of them shared their iTunes password with their kids. For the most part, that trust barrier seemed to break down along age lines, with parents of kids younger than about 8 or 9 not sharing the password, while parents of teens were more comfortable with sharing — especially if, as in one case, the child had set it up for them. That may be because at a certain age, kids are old enough to understand they're spending real money and that they're likely to lose the privilege if they abuse it. At least that's what happened to one of the kids in my mini poll: "[I shared the password] until he purchased a bunch of music with inappropriate content!"

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.

Isis taps NFC partner

ISISIsis, the mobile payment platform funded by Verizon, AT&T, and T-Mobile, said it has contracted with Dutch digital security company Gemalto to run the NFC platform on Isis-enabled phones. This means that Gemalto will manage the access to the secure NFC chip on Isis-enabled phones, saying in effect who can access the system for payment or other services.

The move is another step toward Isis' eventual rollout, which will be preceded by two tests planned for the first half of 2012 in Austin, Texas, and Salt Lake City, Utah. Isis is emerging as a major competitor to Google Wallet, particularly in light of Verizon's recent decision not to allow Google Wallet to function on the Android-powered Samsung Galaxy Nexus on Verizon's network. Verizon and Google say they're in discussions, but skeptics wondered if this might be the first of many blocks to come by the three carriers who support Isis.

Meanwhile, Bank Technology News (BTN) reported that Google Wallet may be planning to roll out a larger demo in London in the first months of 2012, ahead of the Summer Olympics. BTN said that Visa, the payments sponsor of the Olympics, is likely to be part of that trial. Thus far, Google Wallet has been limited only to Nexus owners on the Sprint network who have a MasterCard through Citibank. The London trial is likely to be widespread, reaching more handset owners and, presumably, far more merchants.

Consumers: Make it easier for us to spend

Survey results released this week offer the counter-intuitive finding that consumers might be more comfortable with mobile payments than they are with credit cards. Javelin Strategy & Research conducted the survey that found that (not surprisingly) consumers don't like having to key in 16-digit credit card numbers to buy stuff online. They would be more comfortable with direct carrier-billed mobile payment, which requires only a mobile number and a pin. Those charges then show up on a mobile carrier bill. The survey was commissioned by Payment One — a direct carrier-billed mobile payment provider.

More than half of the 2,000 consumers who took the survey said they've abandoned shopping carts before checking out because of security concerns, and four out of five said they would spend more money online if it were easier and more secure. In the report, Javelin said this could all add up to an additional $110 billion in new revenue for merchants in the U.S. each year. Payment One is just one of several vendors willing to step in to help merchants reach that number, recognizing that 14 numbers is a lot easier to key in than 16, particularly when 10 of those digits are your mobile phone number.

Got news?

News tips and suggestions are always welcome, so please send them along.


If you're interested in learning more about the commerce space, check out DevZone on x.com, a collaboration between O'Reilly and X.commerce.


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