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January 12 2012

Commerce Weekly: Report criticizes "feeble" mobile strategies of posh retailers

Here are a few of the items that caught my eye this week.

Report says 44% of prestigious retailers have "feeble" mobile strategies

Few high-end retailers are moving as quickly as they should on mobile commerce, according to a new report from research firm L2. In its first survey of premium brands' mobile strategies, L2 looked at the mobile and tablet platforms of 100 prestigious retailers — names like Dolce & Gabbana, Clinique and Cartier. In spite of their high margins, L2 found that most were taking a wait-and-see approach to mobile commerce, even though U.S. m-commerce sales are expected to grow from $6 billion in 2011 to $31 billion by 2016, according to Forrester.

In its report (and accompanying video, below) L2 scolds the laggards, reporting that:

  • 30% of brands haven't developed a mobile app
  • 33% don't have a mobile-optimized site
  • 16% have no mobile strategy at all

L2 placed 44 of the 100 brands it surveyed in the "feeble" category. At the other end of the spectrum, only four companies seemed to be doing enough right to earn a place in L2's "genius" category. Sephora topped the list, thanks to solid mobile and tablet apps, and successful cross-promotion of its mobile offerings across the rest of its digital platform. Nordstrom, Macy's and Net-a-Porter rounded out the top four.

It may look like a dismal showing, but as Lauren Indvik pointed out at Mashable, it may be enough to lead the rest of the retail competition. Indvik cited figures from Jesse Haines, group marketing manager for Google Mobile Ads, who told Mashable that a survey of major advertisers in early 2011 found only 21% had launched a mobile site at the time.

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

Sprint triples your chances to use Google Wallet

Samsung Galaxy Nexus with Google WalletIf you're like me, you've begun to see point-of-sale devices promoting the capability to pay with Google Wallet around town — for example at Whole Foods, Radio Shack, and CVS. Google has a nifty little map app that shows you where in your zip code you can wave your NFC-enabled Sprint Nexus S 4G phone to pay for — oh, you don't have a Nexus S 4G phone? Yeah, that's the problem: I've yet to see anyone actually making a purchase in the wild.

Sprint said this week it will do what it can to help by introducing two more phones that support Google Wallet: Samsung's Galaxy Nexus and LG's Viper. That brings the total number of phones that support Google Wallet to three. Both of the new phones store the payment applications on a secure embedded chip. Buyers will need to use either Google's Prepaid Card or a Citi Mastercard. The secure chips can also store coupons, points and offers.

Google will need all the help it can get from Sprint to spread the base of Wallet users, at least until the other carriers, all of whom are founding members of Isis, decide to let Wallet onto their phones. Verizon's decision in early December not to allow Google Wallet on its Android phones has cast a shadow of doubt on the whole business.

Meanwhile, all the players in the mobile payment system continue to run trials and tests to see where the soft points are. Visa said this week that it has certified six mobile devices to handle NFC payments using its PayWave system, a point-of-sale device that can process Visa payments wirelessly from a mobile device or a PayWave fob or card. On ZDNet, Zack Whittaker reported that in the U.K., Visa is hoping to roll the technology out as far as it can in time for this summer's Olympic games.

PayPal's mobile volume exceeds its own expectations

The volume of mobile payments is rising faster than expected, as shown by PayPal's announcement that it processed nearly $4 billion worth of mobile payments in 2011. That's up from $750 million in 2010 and $141 million in 2009. David Marcus, vice president of PayPal Mobile, made the announcement at the Consumer Electronics Show in Las Vegas. A year ago, Marcus told VentureBeat, the company predicted it would process $1.5 billion in 2011, a figure it later revised upward to $2 billion. Marcus credited, among other things, Starbucks customers using PayPal to top off their cards and the rise of iPad-based e-commerce.

Next stop: moving offline to point-of-sale devices. PayPal announced a trial using PayPal at the register in Home Depot stores, with no NFC required. For now, it's a limited test with a handful of PayPal employees who can use a PayPal card or just enter their mobile numbers in a point-of-sale terminal to pay for their DIY supplies. PayPal expects to roll it out to a wider audience later this year.

Got news?

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


July 21 2011

ePayments Week: Is "0000" your passcode?

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

Most common iPhone passcodes

Really bad passcodeOne of the obstacles to mobile commerce is the sense that it's not secure, but there's a dead-simple action that can make things a little tougher for the bad guys: consumers can choose original passcodes. App developer Daniel Amitay took a look 204,508 iPhone passcodes and found that the 10 most common ("1234," "0000," etc.) accounted for 15% of all passcodes. Amitay also found a whole lot of codes based on year dates from 1980 to the present. Number 3 on Amitay's list — the code "2580" — stumped me until I looked at a keypad and saw it's a vertical line down the middle. Likewise, I needed to look again to see what "5683" spelled out: LOVE (or LOUD, but I'm guessing love).

MFoundry CEO Drew Sievers cited Amitay's results in his blog this week, and he also added a few things banks should do to educate their customers — like telling users to never respond to a request for a password via SMS text.

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

Google In-App Payments

This week, Google made its In-App Payments system available for developers to deploy on any web app. In-app payments rolled out at the Google I/O developer conference in May, but it was initially limited to apps distributed through the Chrome store. Now it works anywhere on the web. It's similar to PayPay for Digital Goods in that it aspires to offer a seamless purchasing experience for users engaged in games or content. And it's similar to Apple's in-app payments for games and subscriptions, except that Google takes a 5% cut compared to Apple's 30%. (PayPal's cut is a close second at 5% plus a nickel.)

Mobile payments mainstream in 4 years? How about 2

It finally happened to me this week: the moment where mobile payments crossed the line from an intriguing novelty (at Starbucks, usually) to a serious questioning of why we're still waiting for this. I found myself out running errands with my phone, but no wallet. Without thinking too hard about it, I had left the house carrying the item that was more essential to me (the phone). Back home, a folded piece of leather stuffed with plastic and paper sat on my dresser. As I groped for a credit card that wasn't there, it seemed odd that with all of the things I can do with my smartphone — conduct business, keep up with friends, research topics, read news or books, watch any movie I could think of, play games, edit videos — I still can't pay for a gallon of gas.

That's changing, of course, and rapidly. Auditing firm KPMG released survey results this week reporting that 83% of 1,000 executives surveyed expect mobile payments to be mainstream within four years, and about half of them think it could be as soon as two years. I'll be surprised if it takes that long.

Isis takes credit cards

ISISIsis, the telecom-backed consortium to put NFC payment technology and standards into mobile phones, said Tuesday it has signed agreements with Visa, MasterCard, and American Express to let buyers and sellers use those credit cards in Isis' future system. (Isis launched last November with the No. 4 credit card company Discover as a partner.) Original consortium members AT&T Mobility, T-Mobile, and Verizon Wireless guaranteed near ubiquitous backing among U.S. carriers, but the credit card provider angle seemed a little thin with only Discover enlisted in the effort before this week. These new agreements with virtually the entire credit card industry would seem to be a major vote of confidence in the consortium's ability to drive a standard for NFC payment that handset makers can get behind.

That leaves the major mobile OS operators out own their own — where they presumably want to be. Back in May, Isis invited Apple and Google to join their consortium, but so far both appear to be content with their solo efforts.

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.


July 07 2011

ePayments Week: AliPay gets physical

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

China's AliPay develops barcode payment system

AliPayChina's search engine giant, Alibaba, has launched a barcode-based mobile payment system for paying for real-world goods. Alibaba's payment subsidiary, Alipay, isn't waiting for near-field communications (NFC), and has developed an app on iOS, Android, and Nokia platforms. Similar to the well-known Starbucks app in the U.S., Alipay generates a unique barcode that merchants can scan with a barcode reader or their own smartphone camera. The system draw funds from a user's credit card or a prepaid AliPay account.

Like everything in China, the opportunity is tremendous. There's more than 420 million Internet users, including some portion that spent 400 billion yuan ($62 billion U.S.) online in the first quarter of 2010. Within this market, AliPay (which some U.S. readers may know as the subsidiary that was spun off from Alibaba without notifying key investors Yahoo and Softbank) held 45.5% of the market for online payments in China in 2010, followed by number two player Ten Pay. Earlier this year, AliPay announced that, having signed up 200 million users, it has more registered users than PayPal.

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

An acoustic footprint for hyperlocal navigation

Batphone screenshotResearchers at the McCormick School of Engineering and Applied Science at Northwestern University have developed an app for recording an acoustic "fingerprint" of a room to see if this method can be used for indoor navigation. Stephen Tarzia, a computer engineering graduate student, developed the app — called Batphone — as a proof of concept. It records the ambient sounds in a room (air systems, computers, lights, appliances), filters out transitory sounds (like people talking), analyzes how the sounds are distributed, and creates a fingerprint. A release from McCormick says the current app is just a proof of concept, but that acoustic fingerprints could be used in the future to assist in check-ins or other hyperlocal apps in situations where GPS tracking is unavailable.

Juniper report: $670 billion in mCommerce in 2015

Digital goods like music, subscriptions, and gaming will continue to make up the largest part of mobile commerce over the next four years, but the growth rate in non-digital physical goods will rise much faster, according to a new report from Juniper Research. The report says that rising sales in physical goods, fueled in part by the advent of NFC technology that will let consumers pay for goods and services by tapping a reader at the cash register, will help spur "mCommerce" from $240 billion this year to $670 billion by 2015.

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.


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