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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.

Related:

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

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