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September 01 2011

ePayments Week: Financial Times bets on its web app

Here's what caught my attention in the payment space this week.

Financial Times drops iOS app

Financial Times web appThere are at least two big issues involved in The Financial Times' decision to pull its iPad and iPhone apps from the iOS App Store this week: one is about data; the other is about money. The FT, along with other publishers, has complained that the key sticking point in Apple's new requirement that all purchases, including subscriptions, go through the App store, has been the question of who controls the relationship with the subscriber. The publishers see these as their readers, and they want to know everything about them. And when readers upgrade or renew their subscriptions, the publishers want to deal directly with them. The view from Cupertino is different: these readers appear to be iTunes subscribers making an in-app purchase. For delivering this consumer to the app maker (the FT in this case) Apple would like its 30% cut of revenue. That may have been a factor in the FT's decision, though it seems the amount of money it would have had to give up — Robert Andrews at figured it at $1.63 million at the high end — would have been fairly insignificant to FT's parent company Pearson (and even more so to Apple with its billions in cash).

The FT's withdrawal comes as no surprise. Its online and print versions have been encouraging readers all summer to dump their iOS apps and switch to's "web app" — its HTML5 site that displays nicely on the iPhone and iPad. The Wall Street Journal reported that more than 550,000 users have the web app. PaidContent's Andrews speculated that the web app's adoption may have been spurred by a promotional offer earlier this summer granting full access to the site. ( is primarily a paid-subscription site, allowing only 10 free articles to registered users every 30 days.)

Lest we wonder if "the pink 'un" knows what it's doing in walking out on Apple and its 200 million store members, we should note that has run successfully on its paid subscription model for more than 10 years, even during the days when most mainstream news publications believed they could never charge for online content. Some publishers have come around to the FT's model, most notably The New York Times, which resumed charging for full access to online content earlier this year.

What's more, the FT says it hasn't completely abandoned Apple and, according to a Reuters report, still plans to distribute future apps in its store, including one for its luxury weekend magazine, "How to Spend It." Apparently, those are subscribers that the FT doesn't mind sharing with Apple.

Android Open, being held October 9-11 in San Francisco, is a big-tent meeting ground for app and game developers, carriers, chip manufacturers, content creators, OEMs, researchers, entrepreneurs, VCs, and business leaders.

Save 20% on registration with the code AN11RAD

Flickr's geofencing: setting access based on location

Last week, I wrote about geofencing in the context of Placecast's service to announce deals and other offers when subscribers enter a virtually delineated space. This week, Flickr rolled out another interesting use of geofencing: automatically setting privacy restrictions on photos based on where they were taken. Flickr's blog explains the new feature, and creating a geofence and linking it to access preferences is a quick and easy process.

Flickr geofence example

Flickr's geofencing is a mashup of two services that its members are already familiar with: geotagging photos and setting limits on who can see them. But in combining these two simple features, Flickr (and parent Yahoo) will offer many consumers the first glimpse of a new degree of control they will gain over the intersection of their digital and physical worlds: setting controls over what happens when they move from one location to another.

As a bonus, there's a nice post on describing the details of the feature and the fun process the coders went through to pull it together: "We met at Nolan's house, ate a farmer's breakfast, and brainstormed."

Is daily deal fatigue getting you down?

Robert Hof has a compelling column on Forbes: "5 Reasons Daily Deals are Tanking — and 3 Reasons They're Not Dead Yet." Movements this week among the category's top players would seem to confirm the ambiguity of that headline. Facebook has said it will stop its four-month old Deals program and Yelp said it would scale its program back (CEO Jeremy Stoppelman said "it hasn't been all rainbows and unicorns"). Meanwhile, Google appeared to be ratcheting up its Offers program, even promoting an offer on its legendarily sparse home page ($5 tickets to New York's American Museum of Natural History). And Groupon continued to storm toward its anticipated IPO.

I tend to agree with one of Hof's main points: too many offers are for expensive, bucket-list or birthday-party events, like flying in a hot air balloon or learning to scuba dive. Google Offers appears to take a more budget-friendly approach, offering things that people really buy every day. Google launched its Offers in Portland in June with a $3 deal at Floyd's coffee, and it continues to promote cheap recession-friendly luxuries, like $7 worth of frozen yogurt. But even Google Offers suffers from an excess of kayak rental offers.

I have to wonder if all the wine-tasting and helicopter ride offers are part of the reason why Groupon has seen its web-based traffic drop by half since June, as reported by Experian Hitwise. It may be that while there is a continuous appetite for bargains on things we consume every day (like coffee and bread), it's more difficult to sustain interest in endless offers for boot camps and laser-based body slimming.

Got news?

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

If you're interested in learning more about the payment development space, check out PayPal X DevZone, a collaboration between O'Reilly and PayPal.

Fence photo: Fence Friday by DayTripper (Tom), on Flickr


Reposted byurfin urfin

August 25 2011

ePayments Week: The rise of location-triggered offers

Here's what caught my attention in the payment space this week.

Geofencing: As long as you're here ...

Fence Friday by DayTripper Tom, on FlickrOne of the promises of mobile advertising — at least from the merchant's perspective — has been the potential to advertise to customers when they're near your store and can act immediately (and impulsively) on your offer. To make these location-triggered offers, merchants need to delineate a "geofence" around their retail outlets — a radius or polygonal area in which customers who have opted into a deal program can be notified on their mobiles that an offer is available nearby. Indeed, Groupon is working on adding such location-based deals to its daily offers, according to a letter sent from its general counsel David Schellhase to two U.S. Representatives who were asking about Groupon's privacy policies.

Placecast is one company that has been working on this issue. Its service allows merchants or event planners to delineate a virtual perimeter around their locations that marks their space. When customers who have opted in to receive alerts about their retail brand or event enter one of these locations, they get a text message (a "ShopAlert"), describing the offer or event. In an interview, Placecast CEO Alistair Goodman said the company has focused on text messages thus far because they're very effective. By some measures, 90% of all texts are opened within three minutes of receiving them.

This week the company expanded its service so that ShopAlerts can also work as notifications that are linked to apps. Just as with other notifications on iOS and Android, the relevant app doesn't need to be open to receive the notification, but clicking on the notification can trigger the app to open. The new notification capabilities would seem to go well with expected improvements in the way that iOS handles notifications.

Goodman said the key to success in mobile coupons is making the message relevant. "We're only sending a text if it's the right place and time." That's key since most of us are not very good coupon clippers; we're unlikely to retain, remember, and use an offer if we don't do so almost immediately. Goodman said that location-triggered delivery is highly effective with "exceedingly high" response rates: between 11% and 60% of users are likely to visit a store when pinged with an offer if they're nearby, and up to 46% are likely to make a purchase.

More than three million subscribers, mostly in the US and UK, are currently receiving offers from Placecast — though they don't see them as coming from Placecast, which operates as a "white brand" service to other businesses. Goodman emphasizes that subscribers have all opted in via their telecom carriers or a retail brand like North Face. With that much data, there's a back-end business for the company in aggregating and anonymizing the information so it can analyze it and feed data back to merchants on which offers are most effective and when. Indeed, the company's self-service tool with which clients can manage their offers online also includes some data tools for this type of analysis.

It remains to be seen how many customers will be comfortable with this level of interaction with stores — even if they are their favorite brands. On the up side, services like Placecast are merely sending out information based on location awareness; consumers aren't being asked to divulge any financial information. On the down side, some percentage of customers are always going to remain fairly uncomfortable broadcasting their locations in this way to businesses, even if doing so offers tangible rewards. The key to success will depend on how large that percentage is.

Android Open, being held October 9-11 in San Francisco, is a big-tent meeting ground for app and game developers, carriers, chip manufacturers, content creators, OEMs, researchers, entrepreneurs, VCs, and business leaders.

Save 20% on registration with the code AN11RAD

Survey: iPhone users keen on mobile payments

Results of a UK survey about customers' willingness to use mobile payments and banking apps suggest that iPhone users are somewhat more likely to embrace mobile payments than their Android- and Blackberry-carrying peers. According to a summary report on GigaOm, the survey found 46% of iPhone users said they would pay bills with their mobiles compared to only 21% of the total group surveyed. Not surprisingly, younger folks (18-24 years old) were also more comfortable with the idea than their older brothers and sisters.

YouGov's ongoing research has provided some other insights on platform differences among UK users. Loosely generalized, they paint a picture of Blackberry owners as more driven and responsible compared to iPhone users who are more likely to overdraw their bank accounts and spend the day on social networks. According to YouGov:

  • BlackBerry users are likely to earn more, with 10% earning over £50,000 a year compared to 7% of iPhone users and 5% of Android users.
  • iPhone users spend more time on their phones than users of any of the other top models, with 18% spending more than four hours a day on it compared to 4% apiece of Android and BlackBerry users.
  • 63% of iPhone users say social networking apps are among the three they spend the most time on compared to other types.

These results, combined with other research that has found iPhone users may be a more lucrative market for developers than Android users, suggests iPhone users are quicker to spend money on their phones. We can speculate on the reasons. Certainly the higher price point (in many cases) of an iPhone attracts a user who is willing to spend more on technology and its accoutrements. Another possible factor could be their familiarity with the Apple retail model: iPhone users are accustomed to a tightly controlled shop where they deal with a single company that they trust — the same company that made their phone and its software. The Android platform, by comparison, may require users to navigate a telecom interface, Android's operating system, a hardware maker's device, and perhaps a fourth-party app store. That could create a less-structured environment where users may be less comfortable spending money. McAfee's recent report on Android's greater susceptibility to malware may only compound this feeling.

Android phones are the new destination for crapware

And speaking of trust, are telecoms burning up the goodwill of their customers who choose Android handsets by loading them with crapware? Mike Jennings on compares this trend to the same syndrome experienced on Windows-based desktops and laptops in recent years, where the excitement of discovering your new gadget is often dampened by splash screens with offers to sign up for security or media services.

Jennings notes that it's worse this time around since the mobile software, which can degrade performance, is more difficult if not impossible for average users to uninstall. He blames the network carriers, who load up the handsets to fulfill lucrative deals they've signed with software vendors. But there may be a limit to what customers will accept. Earlier this month, the same publication reported that Vodafone was backpedalling on an over-the-air upgrade that loaded up HTC Desire handsets because customers had complained of being tricked into installing the software. "We've listened to feedback from customers on a number of points around the recent 360 Android 2.1 update and made some changes to the rollout plan," Vodafone posted sheepishly on its own forums.

Got news?

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

If you're interested in learning more about the payment development space, check out PayPal X DevZone, a collaboration between O'Reilly and PayPal.

Fence photo: Fence Friday by DayTripper (Tom), on Flickr


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