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March 01 2012

Commerce Weekly: Small banks lagging in mobile

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

Smaller banks lagging in mobile channel

Smaller financial institutions, which depend on a higher level of customer service to compete with the giants, are falling behind in the increasingly important mobile channel, according to a report by Javelin Strategy & Research. Javelin says about 37% of customers at big banks use mobile banking, compared with only 21% at regional and community banks and only 15% at credit unions. Javelin's report suggests two reasons for this. First, community bank customers tend to be older, less well off, and less tech-savvy than customers at big banks. Second, big banks can invest more in online and mobile development and marketing, resulting in a better banking experience through those channels. (That's certainly been my experience: my attempts to switch to a smaller bank were thwarted by a virtually unusable online banking system, which drove me back into the warm and fuzzy interface of a cold financial giant.)

Some smaller financial institutions say they benefitted from the anti-big-bank sentiment of the past year, epitomized by Bank Transfer Day on Nov. 5, 2011. Redwood Credit Union in Santa Rosa, for example, says its new membership was three times the normal rate last fall. But to keep that momentum going, Javelin suggests, financial institutions like Redwood will need to funnel some of their new income into development of these channels.

The report also found that mobile usage is beginning to surpass non-mobile online usage, even if those customers tap their accounts through a mobile browser. Most customers reach banks' mobile sites through a browser on their phone. However, at the largest banks, which tend to offer a "triple play," more customers use apps and SMS text instead of the browser.

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How Netflix improves its recommendations

One of the interesting presentations at O'Reilly's Strata conference this week was about how Netflix looks at its data to present recommendations of other shows members might like. Netflix streams 30 million shows a day. It has 5 billion ratings on those shows and collects another 4 million every day. Data scientist Xavier Amatriain discussed how Netflix uses the data from those ratings and other, more implicit data (including what people watch, which listings they mouse over to read, whether or not they finish programs) to offer recommendations that members will like enough to keep their accounts active, month after month.

Netflix gained a lot of attention a few years back with a broad open innovation initiative: it offered $1 million to anyone who could improve the Netflix recommendation engine by at least 10%. Amatriain said two teams tied for the prize with plans that improved the probability that Netflix could recommend shows that members would like based on their previous activities (though, he added, the cost of integrating those new recommendation engines into Netflix' system may have exceeded their value). Even so, since 75% of shows watched on Netflix's streaming service are based on recommendations, it's more important than ever to offer something that will draw viewers' interest.

Netflix queue example

The clues from all this data allow Netflix to present an array of recommendations to its members. First, there's a row of "top ten" most likely shows. Of course, as Amatriain pointed out, these recommendations are based on viewing history and clues of the entire membership household, not just one viewer. For example, when I log on, along with the thrillers and comedies that Netflix recommends to me, there's a fair amount of "Pretty Little Liars" and other teen dramas that my daughters might like. I used to wonder if this bizarre mix confused Netflix, but Amatriain's talk has reassured me that the company understands what's going on. Then, at a finer-grained level, there are "hyper genres" that Netflix can offer based on your track record: not just Kids Shows, but Goofy Kids Shows; not just Family Movies but Feel-good Father-Daughter Movies. Slicing the offerings narrowly improves the chances of a hit, and it's no accident that the single most likely recommendation is the first one in each row.

Of course, the main complaint Netflix receives (other than its new price structure, I would imagine) is, "why don't you have the show I want to watch?" Amatriain said the company also looks at implicit data to decide what new content to license. So when you search for a show that Netflix doesn't offer for streaming, it gets noted. I guess if you really want it to show up, keep searching for it.

Opera enters the payment fray, PayPal and Home Depot go nationwide

Mobile World Congress, the humongous European conference on all things mobile, is happening this week and everyone loosely connected to mobile payments seemed to time an announcement around it. Here are some of the more interesting announcements that have come down the PR wire from Barcelona:

  • Opera, whose Opera Mini browser has more than 160 million downloads, launched the Opera Payment Exchange (OPX). Opera says it wants to "democratize" the payment space by building a payment platform that works on more platforms and devices than Android and iOS smartphones. It says the OPX platform provides APIs that developers can use to integrate payment systems with the Opera Mini mobile browser.
  • PayPal and Home Depot said they would roll out nationwide the payment program they have been piloting in a handful of Bay Area stores over the past six weeks. The program is a significant step for PayPal, bringing its payment system offline and into the physical retail world. Customers can buy hardware and other stuff on their PayPal account, with a PayPal card or with a mobile number and PIN — no NFC required.
  • Isis, the mobile payments joint venture between AT&T, T-Mobile, and Verizon Wireless, announced more partners in its effort to build a payments ecosystem. Customers of Chase, CapitalOne, and BarclayCard will be able to load their payment information into Isis-compatible phones when they're ready. Isis secured deals with the top four credit card companies (or "payment networks" to use the parlance) last July; now it's making agreements with the banks ("issuers"). Isis is planning two pilots in 2012, in Austin and Salt Lake City, though it's not clear what phones the technology will be in by then.

Tip us off

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

Bank photo: Old Bank in Sunbury Village by Maxwell Hamilton, on Flickr


August 04 2011

ePayments Week: Customers still wary of mobile payments

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

Consumer Reports: Only 5% use mobile payments

In something of a reality check to mobile payment enthusiasts, Consumer Reports says U.S. consumers are still wary of using their cell phones to pay for day-to-day purchases, and only 5% have done so in the past month. Interestingly, that percentage doubles (to 10%) if you include purchases made by charging things to home or mobile phone accounts — a category that could include direct-billing payments like those offered by Zong, Boku, or Bill2Mobile, which are largely used to buy virtual and other digital goods, mostly in gaming environments.

Consumer Reports warned its readers about the hidden costs of mobile transactions, as well as the difficulty in recovering funds if a billing error or erroneous charge appears — something that, the publication says, 1 in 4 Americans have experienced in the past year. Mobile payments linked to credit cards generally offer the most protection in these cases, the report said; the protections offered by those linked to debit cards or phone bills can vary.

Covering the report on GigaOm, Ryan Kim writes that mobile payment providers have their work cut out for them convincing mainstream users that tapping their phone is better than swiping plastic. If they can't sell the pitch, he notes, an opportunity is open for someone who can. That could be any of several hundred third-party app providers that link location to payment in some beneficial way. For example, the partnership between Foursquare and American Express, which offers an easier way to cash in a location-based coupon by making the discount automatically apply when swiping a phone linked to an AmEx card.

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

Snapshot of mobile banking

An infographic produced by Lookout Mobile Security, a firm that offers security services for smartphones, offers an interesting snapshot of the state of mobile banking. (The data is compiled from a range of sources, including Juniper Research,,, and eBay.) The most striking aspect to me is how low some of these numbers are:

  • Only 10% of banking households use mobile banking.
  • Only 9% of consumers opening new bank accounts said a mobile app was important to them.
  • Only 22% of consumers who use mobile banking use it to pay bills.

State of mobile banking infographic
Segment from Lookout Mobile Security's "Mobile Banking on the Go" infographic. Click to see the full graphic.

The graphic also reports that 51% of U.S. banking customers don't trust the security of mobile banking apps — a number that seems lower than I might have expected, given the hesitation reported by consumers in surveys like the Consumer Reports one noted above.

iPhone 5 Rumors: Apple + PayPal

There's more speculation this week as to whether the iPhone 5, which is predicted to roll out in September, will include a payment capability. While the news cycle around "the next iPhone" is a perpetual stream of rumors, they don't always turn out to be false. I'm seeing a consensus emerging that the iPhone 5 may have NFC (near-field communication) chips, but no solid explanation of what Apple may do with them.

This week's rumors suggest that Apple may partner with PayPal to create a payment channel for goods in the wider world beyond the iTunes store. (Apple, of course, doesn't need NFC or a partner to enable payment for digital goods.) NFC would turn the iPhone into a device that could be used to pay for goods in the physical retail world — provided that the merchant has a point-of-sale device capable of communicating via NFC.

PayPal and its parent eBay have made a string of acquisitions this year to strengthen their payment capabilities online, in the mobile space, and in the physical retail space. Ebay's announcement in June that it would buy the rest of open-source economic platform developer Magento complemented its acquisition of GSI Commerce, which provides ecommerce services for physical retail chains. In the web and mobile native worlds, eBay has picked up Milo, which helps consumers find local deals, Where, which offers location-based ad services, and Fig Card, which offers payment channels to merchants. Put them together and it creates a soup-to-nuts commerce channel that could inspire a partner like Apple to wonder, "Why bother re-creating this?"

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.


May 26 2011

ePayments Week: Mobile payments target the point-of-sale

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

Google opens its Wallet

Google WalletGoogle's long-awaited digital wallet appears to borrow a page from Bling Nation, one of the big names in last year's mobile commerce story. Bling's system, you may remember, worked by attaching an NFC-enabled sticker on the back of phones. Users could then tap the phone onto specialized hardware (the Blinger) at the register and Bling could debit the user's PayPal account to pay the merchant. Bling tried the program out in Silicon Valley and San Francisco (and later Chicago), but others in the payments community poked some fun at the kludge factor of attaching a BlingTag onto the back of your phone.

Unless you have a Sprint Nexus S 4G on Sprint, you'll be attaching an RFID tag onto the back of your phone if you want to try out Google Wallet this summer. Google Wallet is an Android app, so presumably even though the RFID hardware is a sticker, the system won't work on any non-Android phones. Even so, Google should be applauded for getting its program rolling without having to wait on the handset makers.

Google Wallet partnerships are limited right now (you can pay only with a Citibank Mastercard or a Google Prepaid card) and you have to find a MasterCard PayPass terminal to tap and pay. Google says it's shaking the program out in San Francisco and New York initially and plans to broaden the scope later this summer. Ryan Kim on GigaOm has a good write-up detailing Google's partners in the effort and the likely gains to NFC as the dominant mobile payment platform.

Just as Bling did, Google is pinning the hopes of its payment system to users' interest in loyalty programs and rewards. Google plans to bring its own Groupon-like daily offer to a wide audience after its current trial in Portland, Ore., and it will integrate those discounts and others into the tap-and-pay scheme where that works.

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

Square and PayPal at the register

Payment companies are converging at the cash register — the point of sale, or POS in payments lingo — to try to bridge the gap between what they know about us online and how they can make the most of that offline. The various check-in services that some of us have been playing around with for several years now (Foursquare, Gowalla, Facebook Places) can be considered a sort of dry run — an attempt to answer the question, "Will mobile users consent to third parties knowing where they go in exchange for small rewards?" The answer for many seems to be "yes," and rewards are hardly necessary.

Square Card CaseAmong payment companies, Square has always been firmly rooted in the physical realm, with its plug-in dongle for swiping credit cards and its focus on small merchants that need to accept credit card payments in person. This week Square reached beyond its merchant base to offer something to the buyers: Card Case. Card Case sets up a directory — visually, it's a "wallet" with cards in slots — of frequently visited merchants within the Square app on your Android or iPhone. The idea is that, after an initial setup you'll run something like a tab at your favorite spots and can pay just by telling them your name and then confirming the process with your phone. (Fast Company reports on their experience trying out the service.) There's a nice data payoff for both sides: the buyer gets a handy little record of how much they've spent at their favorite, Square-enabled spots; the merchant gets analytics from Square about their customers.

Card Case looks kind of cool, especially to those of us who increasingly rely on our digital trail to remember what we've done and to verify that fun was had. But there's no getting around the uncomfortable truth that, for the level of transaction Square is pitching, it may be more hassle than handing over $3 for your coffee. Still, it's an encouraging sign that Square is after something more than a simple cut of the small merchants' credit card transactions. As Square COO Keith Rabois told Fast Company, they're hoping to "create magical experiences" and they're tuned into the connection between good design and consumers wanting to come back for more.

But just as we use different payment methods for different purposes — cash for our cappuccino and a mileage card for our monthly membership fees — it seems like there will always be room for multiple payment systems online, too. And maybe that's why PayPal spokesperson Anuj Nayar didn't seem too worried in an interview with Fast Company (Square is on track to process $1 billion in payments this year; PayPal processed $92 billion last year).

As Square moves closer to PayPal's online customers, PayPal is moving into the physical retail space to meet the challenge. As we've reported previously, PayPal's acquisitions of GSI, Where, and Fig Card this year help put it in a position to do that. A blog post earlier this month by Sam Shrauger, PayPal's vice president of global product and experience, says they plan to be at the retail point of sale by the end of this year. If Square can boost the speed of adoption beyond coffee shops and farmers markets, it might just meet PayPal at the POS.

US banks try out PayPal-style money transfers

clearXchangeThree major banks announced an initiative that copies PayPal's system for sending person-to-person payments with just an email address or phone number. Bank of America and Wells Fargo have been testing the system, called clearXchange, among customers in Arizona, according to the Los Angeles Times, and now they plan a larger national roll-out with Chase joining the effort. In doing so, the banks are trying to catch up not only with PayPal, which has offered a similar system among its customers for several years, but also with mobile banking systems like M-Pesa, Safaricom's similar service in Kenya.

Reuters' financial correspondent Felix Salmon has a great write-up that gives a broad perspective of clearXchange's place among other money transfer services, from the banks and from challengers like PayPal and Square. His hope is that they all remain competitive to keep services like clearXchange more or less free (like sending checks) rather than loaded with lots of little fees (as some debit cards have done). The competition from web-native services is clearly on the minds of bank executives, as evidenced by a comment attributed to John Feldman, a Bank of America executive in charge of the program. The LA Times says Feldman believes consumers will feel confident in the security of the program because it relies on email addresses and cell phone numbers rather than old-school account and routing numbers.

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.


May 19 2011

ePayments Week: Who will deliver swipe-and-pay first?

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

Swipe-and-pay cometh

ISISThe coming ease of swiping and paying with your smartphone seems like an inevitability at this point, but there was some interesting speculation this week about who would bring it to us first and what the value would be. Forbes columnist Elizabeth Woyke reported that Isis' CEO Michael Abbott continues to expand the company's "mobile wallet" program, inviting Apple, Google, and Sprint into the big-tent effort. When Isis was announced last autumn it was a joint venture by telecoms AT&T, Verizon and T-Mobile that was paired with Discover Card and Barclays bank. Since then it's sought to open up and broaden its base. No word yet from Apple and Google, but their joining the effort seems unlikely since both are pursuing their own NFC solutions.

Once we gain the ability to swipe and pay with our phones, what will that change? Cameron Franks, an area vice president with Sybase, notes in a blog post this week that the technology to swipe using a credit card has been around for a while, and he wonders how much more convenient swiping with a phone will be:

[T]he convenience factor of tapping a phone versus swiping a card is not significant to change user behavior, so it remains to be seen if NFC is the way forward. In fact the chief benefit of driving payments from handsets accrues to retailers rather than consumers.

And that's the key driver, in my opinion. While it was difficult to demonstrate value to a merchant of pushing the credit-card-swiping technology, the benefits of connecting with a user's mobile phone -- from identify confirmation to follow-up with text coupons -- are a clearer incentive.

This week there are rumors that Apple itself might be one of the first retailers to try to make good on this opportunity. The web is buzzing about secret meetings at Apple's retail stores and plans for the unveiling of ... something. Mashable wondered if it might be a switch from employees selling on iPhones to selling on iPad 2s, while Fast Company speculated that it might be the installation of NFC-capable terminals.

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

Mobile banking surges (almost) everywhere

Global use of mobile banking grew rapidly over the past year, more than doubling in some key emerging markets like China and Brazil, according to research from TNS. Even in more established markets like the US, UK, Singapore, South Korea, and Sweden, uptake was high, spurred by financial institutions offering mobile banking and improvements by those who were already doing so, the report says. TNS highlighted the prediction that mobile banking will leapfrog current technologies in some emerging markets, just as communications have where many people's first phones were mobiles:

[I]n more mature markets, mobile banking is simply a matter of convenience, and largely an extension of the PC online experience ... however in developing markets mobile may provide an entry point to banking for millions of "unbanked" people, in countries where banking infrastructure is poor, and banking restrictions create barriers.

BumpUptake in more developed markets is significant, but there's still plenty of runway out in front, with only about 1 in 5 bank customers in the UK, US, and Sweden using their mobiles to bank.

Banks are doing what they can to innovate in order to encourage them: just a few weeks ago ING Direct became the first to let customers use Bump to transfer money from one customer to another, from one smartphone to another. Both customers have to have an ING Electric Orange account, iPhones, and the but it's a start.

Not everyone's happy about the pace. The chief general manager of the Reserve Bank of India (India's central bank, similar to the US Federal Reserve) suggests that India is a laggard. In remarks this week, G Padmanabhan expressed disappointment at the slow growth of mobile banking in India, even after the RBI had deregulated to allow more mobile banking services. "Implementation of some of the policy directives, which were emanated largely on the demands of stakeholders, has been far from satisfactory," he said. The remarks are no doubt designed to spur an industry where execution lags ambition, but it's likely that once mobile banking gains a foothold with at least one major institution, it will build momentum rapidly — as happened with the ATMs.

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.


May 12 2011

ePayments Week: Can check-in services prove their value?

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

Retailers check-in, teenagers check out

Check-in services appear to be making more deals with card companies and retailers who want to test the waters to see if there's any there, there. Having gained an audience and trained them to perform simple actions on their smart phones, these services now need to tie the act to something meaningful — usually a discount. On the heels of American Express' Foursquare trial at SXSW back in March, rival service SCVNGR has announced a deal with American Express that delivers the discount through the AmEx card. This prevents an embarrassing argument with a sales clerk who doesn't understand why you're showing him the screen of your smartphone. SCVNGR is an interesting entry in the market as it not only lets you create new check-ins, it also lets you come up with fun challenges and add those to the mix (like making origami out of your burrito's foil wrapper).

Retailers are sniffing out the services, too. Starwood, which manages hotel brands like Sheraton, Westin, W and others, is encouraging check-ins by awarding 250 Starpoints (the hotel equivalent of frequent flyer miles) for each check-in, along with the chance to unlock a free night at a Starwood resort. And Murphy USA gas stations in the Midwest are offering $2 off a $20 gas purchase if you check-in — this after a test program giving away a pack of Stride gum drew 15,000 check-ins over a weekend. These discounts may seem bolted on to the Foursquare experience, but they're built-in to services like Shopkick that are all about coupons and rewards. Fierce Developer has an interesting interview with Shopkick's CEO this week, in which he divides check-in apps into three categories: social, gaming, and shopping.

But like coupon clipping, are these services destined to remain the focus of the bored, the middle-aged, and the lonely? A survey by Dubit, a UK-based communications and game-development company, shows the services getting a big yawn from teenagers. Dubit asked 1,000 kids between 11 and 18 years old, and found that less than half of them had heard of any of the check-in services. Facebook Places fared the best with 44% recognition, but even among those who had heard of it, few see the point. This confirms my own anecdotal research, in which I've noticed that while I am pointlessly checking in to a senseless system, my own teenagers are more likely to be texting with a real person on the other end — so their friends already know where they are. Who would have guessed that texting would be considered the more social option?

Skype and Facebook Credits

SkypeOne of the more interesting observations in all the coverage of Microsoft's $8.5 billion agreement to buy Skype was Om Malik's suggestion that the big winner of the deal was actually Facebook, which was happy to see Skype avoid Google's grasp. Instead, Skype has now landed in the camp of a major Facebook investor, which means Facebook could get access to its brand and technology without having to go through the hassle of an acquisition. Malik foresees a mutually beneficial deal where Facebook delivers a wider audience to Skype, which in turn provides a solution to voice-enable Facebook Chat. What's more, Malik pointed out, the deal could mean it becomes possible to use Facebook Credits to buy time on Skype's premium service — yet another possible route for Facebook's virtual currency to enter real-world goods and services.

Can Apple and Facebook take their payments out of the garden?

Walled gardenAs Apple and Facebook maneuver to ensure that third parties using their channels also use their payment systems, there's speculation about whether and when they will try to take their proprietary payment systems out of their walled gardens into the wider world. Michael Koploy, an analyst at Software Advice, paints a picture of Apple extending its retail expertise beyond its own properties and, with an NFC-capable device, enabling smarter shopping at other physical stores. Koploy imagines the iPhone supplying the shopping list, guiding the user through the physical store to find items, scanning and pricing items, alerting shoppers to better deals elsewhere, and speeding up payment for a quick exit. It all seems feasible, but to me it somehow feels like the misery of the self-checkout stand stretched out to ruin the entire shopping experience. What's more, it seems to overlook one of the key advantages of Apple's retail stores: the hip, T-shirted sales associate who helps shoppers understand complex products and moves them effortlessly to purchase, checking them out where they stand. Apple's yet-to-be-discovered competitive edge may lie in a new division that offers sales training.

Another interesting piece comes from Kim-Mai Cutler at Inside Mobile Apps who speculates about a battle between Facebook Credits and in-app payments (this was originally published in February, but it's worth a look if you haven't seen it). Cutler says that given Apple's and Facebook's failure to find some way for Ping and Facebook Connect to play nice, it seems unlikely that Apple would allow Facebook Credits into its stores. However, if Facebook took its Credits payment system out of Facebook's walled garden and onto the web, and if the games in which Credits are valid currency get written in code-once, play-anywhere HTML5, then there's no reason that the Credits couldn't get used on tablets that support HTML5. Cutler's column raises the question of whether this alone could be reason enough for Apple to consider not supporting HTML5. Maybe, but it's difficult to imagine Apple not supporting a dominant display technology that enables universal interactivity and animation and — oh, wait ... never mind.

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.


April 28 2011

ePayments Week: What does the attention around tracking mean?

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

3 levels of awareness about geolocation

iPhone trackBefore last week, many mobile users likely weren't thinking about their location data; that's changed for some. Apple, while maintaining that it hasn't been tracking users, promises to change the way location data is stored and transmitted on its mobile devices. But even as Apple's problem dissipates, the discussion has put the issue of location on the radar screen, and reporters and bloggers are digging into what it means.

Watching the discussion over the past week, I've come to think there are three levels of awareness that mobile users have about location data. The first is simple awareness, the understanding that your cell phone and the network it's connected to have to know where you are. The second level is a sort of bargaining that comes from that realization, the idea that you should be getting something back from this data or from the people who store it. And the third level, more proactive still, is that you yourself should have access to this data so that you can do something constructive with it.

Regarding awareness, it may have been an eye opener to insiders that so many consumers weren't aware their cell phones were tracking their movements. A report on NBC's "Today" show began with the line, "It sounds like something out of science fiction: a phone that tracks your every movement." Of course, long before smart phones with maps and check-in services, cell phones had to communicate with nearby cell towers in order to obtain service. GPS and Wi-Fi data have made the pinpointing more precise. But somehow the knowledge that Google Maps on your iPhone can place you at a certain point on the road and show your progress as your bus moves up the street didn't translate, for some people, to an understanding that the phone and your wireless carrier must know where you are and are able to keep a record of it. That's been made clear to a much larger audience now.

In the wake of this understanding, some reporters and bloggers took up the consumer angle, wondering what we get back for giving up this data. This is an excellent point and one on which, I believe, the future of mobile commerce rests. The communication of data must be a two-way street where each party benefits. I give the navigation service my location and pace and, in turn (and for free) it repays me by displaying traffic data for any major city in 70 countries. I tell Foursquare where I'm checking in and it rewards me with information on where my friends have most recently checked in (and perhaps with a few meaningless points and badges, too). I tell Shopkick I'm near the big box stores in town and it sends me coupons for cleaning products. As mobile and location become more integral to purchases, the connection between my giving up location in exchange for another's profit will become more clear — and consumers will get more vocal about negotiating it.

The promise was also floated that, in the hands of the right folks, this data could be analyzed to gain deep social, political, and medical insights. Robert Lee Hotz's excellent article in Wednesday's Wall Street Journal (in front of the paywall) described several academic research efforts exploring how much they can learn from smart phones. Researchers are seeing what they can learn by not only tracking movements, but when equipped with apps that help users record eating habits, social interactions, moves, and gestures, they claim to be learning how political and social opinion are shaped and how users are influenced to make decisions. The marketing implications of this are obvious — that's the other edge of this sword — and Hotz notes that telecom carriers may already be using this data to assess who is most at risk for switching their contract to another phone company.

Some people have taken the case to the third level (being proactive about personal data) and suggest that consumers should be able to access their data, either to see what it tells us about ourselves or to do something else with it. Richard Thaler in The New York Times proposes that wireless carriers make a version of your geolocation data available for your use, so that you could either analyze it or port it to a third party who could. One could argue that this is essentially what Apple got called out for doing, albeit without telling anyone, but Thaler's point is still valid. He cites a simple example of being able to analyze your phone usage for a better plan, though this is a service some carriers already offer if you call them up and ask.

While it's easy to see what merchants and other third parties can provide of value in exchange for your location data (coupons, deals, reviews, directions), we've just begun to explore what we might be able to discover that's greater than a discount. As we've learned, once you provide the dataset, people do amazing things with it. In his follow-up post a week after noting the iPhone tracking details, Pete Warden points to one such use: Maria Scileppi's Living Brushstrokes project, which uses location tracking to create artistic views of people's movements.

And the payment deals keep coming

Facebook DealsReturning to the nitty-gritty of the payments world ... Facebook and Google jumped into the daily coupon business over the past week. Google Offers is promising a debut in Portland soon (the same place Google first tested Hotpot, which was recently folded into Google Places) and Facebook Deals rolled out in five cities. The moves may remind you of the ways both of these companies jumped into the check-in business last fall after seeing the successful uptake of check-ins via Foursquare, Yelp, and Gowalla.

Groupon said it didn't need Google's $6 billion last November, so Google's coming after them. Sharise Cruze on BusinessReviewUSA reported that Google will display its offers on maps, so don't be surprised if the Offers service (like Hotpot before it) gets folded into Places.

Mobile banking 2.0

Bank of America said it's embarking on a series of changes to revise its mobile banking. Writing in American Banker, Andrew Johnson noted that the move is a reminder that early adopters are into a second wave of refinement, applying what they've learned in the first few years of mobile banking to the next wave. Bank of America, Chase, and Wells Fargo are the top three mobile banking apps in the US, according to a report published in Still, there's a lot of room for growth: comScore's annual online credit card report finds that 20% of mobile phone cardholders use their phone to access a bank account, and 13% are doing that via a mobile app. Since mobile and online are a far cheaper way for banks to manage their customers, we can be sure they'll be at work revising the apps to make them easier to use, more appealing, and more capable.

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.


March 29 2011

Four short links: 29 March 2011

  1. Serve -- American Express mobile payments play. Money on mobiles is a huge potential, look for others to bang around here before the right answer is found. (via Mike Olson)
  2. Move Mayonnaise and Ketchup (YouTube) -- I don't know why you'd want to move mayonnaise and ketchup intact, but this is the machine for it. (via Russell Brown)
  3. Duplicates Detection with ElasticSearch (Andre Zmievski) -- duplicate detection (or de-duping) is one of the most unappreciated problems that the developers of certain types of applications face sooner or later. The applications I’m talking about share two main characteristics: item collection and some sort of social aspect.
  4. Ceaser -- tool for making CSS easing animations. (via Josh Clark)

February 24 2011

ePayments Week: More Androids banking

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

More Androids banking

Android logo As the number of Android users swells past the number of iPhone users, it should come as no surprise that as of December, 2010, there's more mobile banking on Android than on iPhones. However, Carlo Cardilli suggests that could change as the number of Verizon iPhones grows and those users take up mobile banking.

A recent Forrester survey says 12% of the US online population banks on their phones, up from 5% two years ago. Forrester says that's about 10 million users, and predicts that will grow to 50 million by 2050. That growth seems reasonable, given that users who discover mobile banking tend to, over time, use it more as they get used to it, especially for simple transactions like checking balances and transferring funds between accounts. Still, Penny Crosman with Bank Systems & Technology notes that 35% of online users shy away from mobile banking because they worry it's not safe and 24% don't see the point and would just assume wait until they reach the ATM.

Discomfort with the mobile wallet

Speaking of people who are wary of mobile transactions, remember all that stuff we've been reading about mobile payments being a disruptive technology that catapults new players into the driver's seat and leaves old-school players in the dust? Well, turns out not everyone is all that excited about handing over the keys to the kids. What's more, they're not even sure they want to get in the car with them. A new survey by UK researchers Vision Critical finds a majority of Britons "uncomfortable" with the idea of using their phones for mobile payments. The survey found women more skeptical, while men and people already poking around on smart phones were more open to the mobile wallet concept.

Perhaps most significantly (and interesting) was that those surveyed trusted banks more than telecom carriers, credit card issuers, or handset manufacturers to handle the transactions. "Banks could play a strong role here," said Mike Stevens, Vision Critical's head of research in London, in an interview with Sarah Clark at Near Field Communications World. "They are generally more trusted by their customers than other players in the mobile payments game." It's a striking vote of confidence for the banks whose credibility had seemed to suffer in the wake of the financial crisis, and perhaps an affirmation that however much we dislike our banks, we like our telcos even less.

Square simplifies

SquareSquare founder Jack Dorsey tweeted the news Tuesday that the mobile payment service would drop its transaction fee (15 cents) on purchases and collect only the 2.75 cut. @jack followed that with a retweet from @stevecheney: "A merchant doing 500 transactions a day just saved over $27K a year with @square. Remarkably impressive."

Kat Aharya at Mobiledia wrapped some nice context around the move, noting that it fits nicely with Square's goal of simplifying the whole process of collecting payments on credit cards, especially for small merchants. From the cute dongle that plugs in to a smartphone's audio jack to the straight 2.75% cut (compared to merchant vendor accounts, which have variable rates depending on transaction amounts and volume), the Square sells itself as the simple and straightforward alternative for the forward-looking merchant crowd.

Few remembered that the fee was an experiment, but Kevin Woodward at ISO & Agent offered a reminded that Square had added the fee just last April and was now reverting to its earlier payment structure. I guess that explains how Square already had a smooth promotional video ready to roll.

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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