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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

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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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.

Strata 2012, Feb. 28-March 1 in Santa Clara, Calif., will offer three full days of hands-on data training and information-rich sessions. Strata brings together the people, tools, and technologies you need to make data work. Save 20% on Strata registration with the code RADAR20.

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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

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, a collaboration between O'Reilly and X.commerce.


December 01 2011

A young entrepreneur's perspective on Angolan innovation

Nyanga Tyitapeka (@kapetatyi) is the founder and director of Infonauta, Prestação de Serviços, an Angola-based startup company specializing in customer loyalty solutions. I met Tyitapeka at Strata New York last September and was struck by her background in energy and environmental analysis, political science, and economics.

The chance to hear about technology innovation in Africa from a personal perspective is rare, so I asked Tyitapeka to share her thoughts on the Angolan tech scene.

Give us the 10,000-foot view of the technology industry in Angola.

Nyanga Tyitapeka: Today, Angola is certainly not a bountiful country when it comes to tech goods and services. The industry is only just starting here — Angola is one of the last frontiers for big tech giants.

However, the industry is expanding at a fast pace, pervading societal interactions and becoming a source for change in the lives of many Angolans in a significant way. It will be extremely difficult for Angola to stay immune to the wave of technological development that has hit the rest of world in the last decade or so. There's a concerted effort by the government to lay down the regulatory foundations, and it's also investing in infrastructure that will allow for faster development. Fiber optic cables, for instance, are being installed, and we expect to have a telecom satellite by 2013.

Large tech companies have, in the past, adopted a wait-and-see approach toward the Angolan market, either opting to not come or to use middle-men; this scenario is definitely changing. Companies like Google, which held a conference in Luanda during the first week of November, have recognized that this moment is propitious for serious investment.

It's not surprising that telecommunications has benefited the most from tech innovations. For decades, civil conflict was a de facto bottleneck in the flow of information. Once peace came and the right conditions were set, it was as if a can of soda had burst open. Angolan telecommunication companies, with the help of Siemens and Portugal Telecom, along with business leaders (both men and women) who turned to Brazil, Dubai, the U.S., the UK, Portugal, and China as suppliers of mobile phones and computers, all moved fast to respond to the demand of the market for telecommunication goods and services. The number of newly installed landlines dwindled, pay phones never took off, desktops are mostly confined to the office setting — yet communication soared.

What are the biggest challenges facing Angola today?

Nyanga Tyitapeka: Low levels of literacy, in general. There is not enough brain power devoted to the tech industry and, consequently, there is little to no production capacity. Development issues are the biggest problems for Angola and for a significant number of countries on this continent. There are other challenges, but those are minor in the face of basic needs. Literacy is obviously a prerequisite to achieving reasonable tech-literacy.

Where are the biggest opportunities?

Nyanga Tyitapeka: Like in many other African countries, Angola will soon experience vertiginous growth in mobile tech applications. Mobile platforms and the introduction of GSM, coupled with some interesting payment options, have allowed a war-torn country to bypass huge infrastructure investments. Here, both individuals and businesses rely heavily on USB modems to browse the Internet and on cell phones to stay in touch. An Angolan with a bank account can conveniently check her account balance by sending an SMS, bypassing traffic and long queues at the bank.

Some predict that in the next few years, services like buying a movie ticket, downloading an MP3 file, or using a vending machine in Africa will not require cash nor a credit/debit card, just a cell phone. Cell phones as wallets work well because while an illiterate person may not know how to read and write, she can count and use numbers. Therefore, she can learn how to send an SMS, so long as the message is a number. The possibilities are endless — think about it. When a business can receive mobile payments from a customer, everybody wins: the business's bank, the customer's bank, the telephone services provider, the business, and the client.

What is fascinating about Angola and sub-Saharan countries in general is that they compensate for weak infrastructure and overcome major obstacles by embracing solutions that are nearly grid-free and simple to use.

There's also plenty of room for growth for some device makers who want to establish a presence in the region. Angola, in particular, imports virtually all of the tech devices it uses. Creating regional industrial subsidiaries would greatly cut down the price of imported devices, which sell well here, in spite of the fact that they are extremely expensive due to low supply.

You founded your own company recently — how would you characterize the startup environment in Angola?

Nyanga Tyitapeka: The startup environment is heavily skewed toward restaurants, beauty parlors, corner stores, and small fashion boutiques. Angolans are known in the international business community as entrepreneurial; however, the success rate of startups is still very low. Starting up a business is relatively easy and cheap. I did it in one month's time. However, maintaining it is a whole different game. Some 60% of businesses fail within the first year. You want to start out as lean as possible, say by running a home office by yourself. But working from home is often looked down upon, and working alone can be extremely hard — running administrative errands around town with heavy traffic and without the support of an assistant is a nightmare here.

More troubling for the startup environment than dodging heavy traffic, avoiding high rents, and overcoming cultural barriers is the small pool of enthusiastic people who are OK forfeiting a salary in order to join a startup.

Are you working on any new projects?

Nyanga Tyitapeka: I am currently building Infograficus. It's a hobby platform and a place for Angolans who want to start using the data I've been tracking to make their lives a little easier.

I've started playing with the data I've collected to get some visuals, mostly mapping how prices of the same product vary in different areas of the city. I am also interested in using the information to visualize the economic geography of street vending and to understand the civil response capacity to an emergency situation. It is one way I can help people who face the same problems I face on a daily basis.

Is big data having an impact on the work you do? Where else are you seeing its influence?

Nyanga Tyitapeka: I am not aware of how companies and governmental agencies are harnessing the power of big data, but it is out there, especially in the energy, financial, telecommunications, retail, travel, and public and health sectors. The truth is that Angola is at a stage of the evolutionary process where data itself is a product. Companies and government institutions are, knowingly or not, collecting loads and loads of data.

Data is a natural resource that can assume many forms — from cash transactions to video footage in a store. I call it a natural resource because it is a byproduct generated almost automatically in every business transaction. My hope is that aside from just storing data and running the risk of losing it, economic agents will start looking for companies like mine to figure out what to do with data they already have: how to get better data, how to analyze the data by asking the right questions, and how to turn data into actionable information and a competitive advantage.

This interview was edited and condensed.

Strata 2012 — The 2012 Strata Conference, being held Feb. 28-March 1 in Santa Clara, Calif., will offer three full days of hands-on data training and information-rich sessions. Strata brings together the people, tools, and technologies you need to make data work.

Save 20% on registration with the code RADAR20


November 21 2011

Jonathan's Card: Lessons from a social experiment

Earlier this summer, author Jonathan Stark (@jonathanstark) launched a social experiment by releasing his Starbucks card to the general public. Based on the "take a penny, leave a penny" tray near some stores' cash registers, Stark encouraged people to use his Starbucks card — to spend the money on it and/or to add cash back to it. While Stark never put any stipulations on the process, some observers were taken aback when another developer, Sam Odio, explained how to use Jonathan's card to buy an iPad.

It's been several months since Starbucks shut down the experiment, and now that the frenzy around it has subsided, I asked Stark a few questions about what motivated him to begin the project and what he learned in the process.

Why did you launch the Jonathan's Card experiment?

Jonathan StarkJonathan Stark: The motivation stemmed from my underlying belief that the vast majority of people are good. An opportunity to test this belief in public and on a global scale clicked with me at a very deep level. I couldn't have articulated this at the time, but it became very clear in retrospect.

For what it's worth, here's how the experiment got started:

I had been testing various mobile payment solutions while doing research for a client project. Starbucks' iPhone app was pretty cutting edge at the time, and I liked it. I wanted to test the app on an Android phone, but Starbucks had not yet released their Android app, so I took a screenshot of the in-app barcode on my iPhone and emailed the picture to my Android device. Sure enough, the barcode reader at the Starbucks point-of-sale (POS) system was able to read the picture of the barcode on my Android phone. This blew my mind because I had essentially emailed money to myself and bought physical goods with a digital photo.

Screenshot of Jonathan Stark's Starbucks cardA screenshot of Jonathan Stark's Starbucks card (click to enlarge).

As far as I knew, this was unprecedented. So, I did what any self-respecting geek would do: I blogged about it.

In the blog post, I invited readers to download the card image to their smartphones and see if it worked for them elsewhere in the US and around the world. It did work all over the US and in a handful of places outside the US. People who used it were amazed and delighted. It was really fun giving out free coffee, so I reloaded the card online a few times. Eventually it got a bit pricey, so I figured it'd be a once in a while thing.

Then one Saturday night, I noticed that my card balance had gone up. This freaked me out because the app is linked to my debit card and I thought someone might have guessed my password and was emptying my checking account. Fortunately, this was not the case. What had actually happened was that one of my friends discovered that he could anonymously add money onto my card using the picture of the barcode, either in person at the POS or by entering the number at

At this point, my head exploded. I instantly realized that I could use the picture of the card to create a worldwide "pay it forward" experiment. I was up all night building a landing page that described the experiment, gave instructions on how to use the card, and how to donate to the card. I also wrote a script that scraped every minute for the current card balance — whenever the balance changed, the card would tweet its balance. When the card balance went to $0, it would tweet for help with a link to the instructions on how to donate.

What surprised you the most about the experiment?

Jonathan Stark: There were a lot of surprises. It's hard to say what surprised me most. Here's a list of biggies:

  • That Starbucks let the experiment go on for as long as it did. Sharing the card goes against the company's terms of use, and it could have been killed right away.
  • I was surprised how many people were perfectly comfortable with the concept of buying things with their phones. It seems to me that the average smartphone user is more willing to accept the "mobile wallet" concept than industry analysts would lead you to believe. I expected more people to have security concerns. I think I only got two questions about that.
  • How fast and huge something gets when it goes viral. I was getting contacted by network TV producers within days once the experiment took on a life of its own.
  • How addictive the Twitter feed was. By the end, @jonathanscard had more than 9,000 followers, many of whom later told me that they were watching it like TV, cheering when someone would make a big donation, booing when someone would spend $100 at a pop.
  • How generous most people are. I was amazed how many people were willing to throw $10, $20, even $50 into the pool to buy a coffee for some anonymous stranger. In one week, more than $19,000 went through the card.
  • How accommodating Starbucks baristas are. We heard stories about people bringing all sorts of wacky stuff up to be scanned: digital cameras, laptops, iPads, and so on. People who didn't have any mobile devices even took to printing the barcode out and scanning it like a coupon.

What are the broader implications from this experiment?

Jonathan Stark: There is no doubt in my mind that the experiment would not have taken off like it did without the Twitter feed. It was addictive, interactive, and simple. Once the community grew and started to engage with each other we had to create a Facebook page to allow people to have threaded conversations. Twitter became the card's data feed and Facebook was where people talked about it. Both were critical but in very different ways.

Starbucks doesn't have an API, which I think is a big missed opportunity. Retailers want to make sticky and engaging loyalty programs, right? One great way to do that would be to publish an API that allows third-party developers to build on top of a loyalty program in all sorts of delightful and unexpected ways. One thing everyone was asking for during the experiment was a heat map of where the purchase activity was taking place. Because there was no API, I couldn't provide this — which is too bad because it probably would have become viral in its own right.

Strata 2012 — The 2012 Strata Conference, being held Feb. 28-March 1 in Santa Clara, Calif., will offer three full days of hands-on data training and information-rich sessions. Strata brings together the people, tools, and technologies you need to make data work.

Save 20% on registration with the code RADAR20

This interview was edited and condensed.


November 17 2011

Commerce Weekly: Bring your mobile to Black Friday

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

Retailers embrace mobiles for Black Friday

Using a mobile phone in a retail storeDo you still try to be sneaky when comparison shopping on your smartphone in retail stores? Are you afraid the manager will take offense and ask you to leave? I think this shyness is rooted in a past wherein retailers controlled the information that flowed to customers in their stores so that they weren't competing with any other retail outlets, let alone Amazon and every other online retailer. Like casino owners who banned clocks and hid exit signs, the retailers used to keep us in their bubbles with their marked-up prices.

That time is long past. As Peter Lurie, American Express' senior vice president of enterprise growth said at a mobile payments conference in New York in September, " 'Are you online?' is no longer a meaningful question." According to Deloitte's 2011 Annual Holiday Survey of 5,000 U.S. consumers, of the 42% that owned a smartphone, 27% said they will use it for holiday shopping. Some other interesting findings by Deloitte:

  • Consumers expect 1/3 of their shopping to be online this year.

  • 51% said they will go online to find the best price — up 10% from just a year ago.

  • Convenience is the top draw for online shopping (73%), followed by better prices (68%).

  • 47% said they have purchased in a store after researching online.

  • 39% said they purchased online after researching at a store.

With so many users doing their product research and comparison shopping online, some brick-and-mortar retailers have stopped fighting it and are instead embracing it. Nordstrom boasts free Wi-Fi access at its stores, and other large retailers, including Target, Best Buy, and Macy's, are promoting their affiliations with Shopkick, which combines check-ins with coupons. And even if retailers have modest expectations for this year's Black Friday, there are a handful of apps aimed at helping shoppers find the best deals in their areas.

While the term "Black Friday" has been gaining traction for decades, it was joined a few years ago by "Cyber Monday," the day when shoppers who had spent their weekends trudging through stores settled in at the high-speed connections at work to find better prices on the items they skipped in the stores. Now, add to the lexicon "Sofa Sunday," the tablet-enabled phenomenon of crashing on the couch after a day or two of heavy shopping to peruse store catalogs. So suggests Joaquín Ruiz, co-founder and CEO of shopping app maker Padopolis in an interview with AllThingsD's Tricia Duryee: "After you are exhausted with your Black Friday experience, you'll relax and regroup on Sofa Sunday."

And on the seventh day, the shoppers rested (a little).

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

Developers chasing Fire

As Android's market share continues to climb — topping 50% of the global smartphone market according to Gartner — so too does developer interest in the platform. This week's release of Amazon's Kindle Fire has sharpened that interest. Appcelerator's Q4 survey of mobile developers found that Kindle Fire is tops in interest among Android developers in the U.S. and second (behind Samsung's Galaxy Tab) worldwide.

Square adds loyalty program to Card Case

The latest update to Square includes a few features designed to make it behave even more like a real cash register, along with something else: the promising of ditching those paper punch cards. In addition to adding integration with hardware peripherals (a merchant can tap an iPad screen to open a cash drawer or print a receipt), this new upgrade adds the ability to design and run loyalty programs. Merchants decide what constitutes loyalty — number of visits, frequency, amount purchased — and what rewards or discounts are given. Once earned, the awards are automatically delivered when the customer pays with Card Case, the app for the consumer side of Square's transactions.

The video embedded below shows some of the features. The hardware integration and loyalty-program interface are nice, but perhaps even cooler is the wooden stand that the iPad slips into to make it a register. It's beautiful when disruption comes with a graceful design.

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, a collaboration between O'Reilly and X.commerce.


November 03 2011

Commerce Weekly: Square upgrades Card Case with geofences

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

Card Case can reach out and touch someone

Square Card CaseIf you're among those who downloaded Square's Card Case digital wallet app back in May and haven't opened it since, there's something new in the latest upgrade that may inspire a return visit to the app: geofencing. Card Case's latest version takes advantage of new capabilities in iOS 5 to trigger alerts when a user enters a geofenced area. Users have to opt into the feature. Once they do, when they pass within 100 meters of a retailer who uses Square, the app will automatically load a card in Card Case. If you visit the shop and opt to buy something, you can complete the transaction by giving your name at the register and confirming the purchase through a text message that arrives on your mobile.

The process still sounds a little less convenient than paying for coffee with a five-dollar bill — and I must confess I wasn't able to demo this today, though I will follow up here once I do. But in theory, this makes Card Case a far more interesting app to parties on both sides of the transaction. Here's why:

  • First, for those of us who buy stuff — Card Case is an early form of the mobile wallet, one that isn't waiting for phones or merchants to adopt NFC wireless. Unfortunately, few merchants use it. It's no doubt more interesting downtown (isn't everything?). But I live in a medium-sized suburb where most of the nearby Square-enabled merchants offer services I don't use much: film editing, spa services, wine-country tours. It's not going to be much help in keeping track of my expenses unless Square makes some deal with a larger network of merchants.
  • Second, for those who sell things, the value is clearer — You can reach out and tap customers who may be close and ready to buy. As I noted this summer, Placecast is another player developing this service. Its ShopAlerts send out texts (for other merchants, not under its brand) when opted-in customers wander into a retailer's geofenced area. Groupon Now has also entered this game, giving merchants the ability to manage offers in real time. Undoubtedly, Square will want to offer similar capabilities to its merchants so they can clear the shelves or fill the tables in real time.

The back-end data and analysis that retailers get from these services is valuable, but the real-time customer management seems like the key feature of these apps. Placecast CEO Alistar Goodman offered a prediction about location and real-time at the recent Street Fight Summit:

Location and time are far more predictive of intent than any other past behavior ... We're fast approaching a time where you're going to be able to bid on a user on a street corner at a particular point in time in real time.

The age of virtual barkers is upon us.

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

Survey: Mobile users say take my location but not my money

Oracle released results of a global survey of 3,000 mobile phone users, which highlights a few key trends:

  • Customers are becoming more comfortable sharing location data about themselves, but most still don't trust mobile security enough to buy stuff on them.
  • While tablet ownership remains fairly low, lots of people are planning to buy them and they want apps that work well on them.

It's no surprise that the survey found subscribers downloading more data and apps this year than last. But I was surprised at the timidity around mobile apps: still only 55% of users had downloaded a mobile app, and only one in four had paid for an app. (I'm guessing their iOS 5 upgrade went quicker than mine.)

Where consumers want to use popular types of apps (Source: Oracle Communications survey, "Opportunity Calling: The Future of Mobile Communications — Take Two.")

Shopping is obviously becoming more important, but for most the mobile shopping experience is still limited to pre-purchase research. Depending on the region, the survey found between a third and a quarter of survey respondents used their mobile phones for comparison shopping and reading customer reviews. But only one third believed their phone was secure enough to make a purchase on. In a related note, 84% bought their phone in a retail store, though most said they did their research online.

Smartphone ownership is rising quickly, but I wonder if the survey overstates it at 70% globally. According to Oracle's research, the U.S. and Europe have 56% and 57% smartphone ownership, respectively. That sounds in line with other reports. But the survey attributed 95% smartphone ownership in the Middle East. (The survey appears to have taken its entire Middle East sample in the United Arab Emirates, which may not be representative of the region as a whole.)

The survey also found that smartphones are outpacing owners' expectations of them.

  • In 2010, 52% thought their mobile phone would replace their digital camera; this year, 43% said it already has.
  • In 2010, 54% thought their mobile phone would replace their digital music player; this year, 34% said it already has.
  • In 2010, 54% thought their mobile phone would replace their GPS; this year, 24% said it already has.

Finally, the survey revealed rising enthusiasm for tablet usage. While only 16% said they have a tablet today, 41% plan to buy one over the next 12 months. Reading, watching television and movies, and banking ranked high on the list of things users wanted to use their tablets for, and in most cases they want these sorts of applications to work equally well on both tablets and their mobile phones.

You can download the report's executive summary here.

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 PayPal DevZone on X.commerce, a collaboration between O'Reilly and PayPal.


October 27 2011

Commerce Weekly: Groupon's long and winding road to an IPO

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

At last, Groupon's investor show hits the road

GrouponIt hasn't been an easy road to the NASDAQ for Groupon. Since it announced plans to go public last June, the leader in daily deals has lost its second COO in a year, endured an inquiry by the Securities and Exchange Commission, and had to make the embarrassing revelation that it was reporting revenues before paying merchants their cut. After delaying its investor roadshow in early September, Groupon launched it this week with an eye toward going public and raising $540 million on November 4. It's seeking a valuation of $11.4 billion, which is pricey compared to other tech leaders (5 times projected 2012 sales) but less than half the $25 billion it was said to be considering earlier this year. Investor enthusiasm, it seems, has waned.

No sooner did Groupon pack up its PowerPoint and hit the road than Yipit, which aggregates daily deals, reported that Groupon's most promising new service, Groupon Now, is off to a disappointing start. Groupon is promoting Now as "Groupon 2.0." The hope is that strong growth in Now will offset its original product, the daily deal, as that method plateaus in popularity. On the Yipit blog, David Sinsky writes that since its May launch, Groupon Now has drawn in less than $1 million per month, less than 1% of the company's revenue. Sales are strongest in Chicago, Groupon's home market, but even in that locale, Now is only on pace to generate $1.5 million annually.

Slow start aside, I can't help thinking there's tremendous potential for Groupon Now because it puts the control in the retailers' hands. As Groupon's Now video shows (below), local merchants can offer deals whenever they have available inventory they want to move, whether that's empty tables or merchandise on the shelves. They can define the deals, start them when they want, and end them when they've hit their limit. Whenever online companies have offered this level of control to sellers, the response has proved tremendous — think of eBay or ads on Google and Facebook. Groupon Now's value proposition to merchants is far greater than the daily deals, where merchants must get in a queue and wait for their special day, on which they're likely to be overwhelmed. What's more, Groupon Now will allow for much lighter-weight, coupon-like deals. Frequent readers of this blog could have guessed that I'm pleased the narrator of the video passes up offers of discounts for a yoga class, Segway tour, and glamour makeover, choosing instead the more mundane but useful discount on a hamburger for lunch.

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

Square and Walmart

SquareMobile payments company Square moved a step closer to mainstream ubiquity this week when Walmart agreed to sell its iconic card-swiping device at more than 9,000 stores. You can already buy the Square at Target, BestBuy, RadioShack or Apple stores — or you can get it for free online. The device remains targeted squarely at small- and medium-sized business, companies that don't process enough volume to justify their own merchant accounts and use Square's service to process credit card payments. Square's marketing aims mostly at these small merchants, but in May it also launched its own mobile wallet, Card Case, which aims to let users run something like a tab at their favorite stores and pay by confirming the purchase on their mobiles — it's similar to direct billing.

Square's COO Keith Rabois has recently been positioning Square as a mobile payment alternative that doesn't rely on an NFC-powered future. "I've never met a single merchant in the U.S. who says I want this NFC thing," Rabois said in an interview with GigaOM founder Om Malik at last month's GigaOM Mobilize Conference. Indeed, consumers don't need any sort of mobile phone — NFC-enabled or otherwise — to complete Square transactions. It's the merchant who provides the "mobile" in this mobile payment: the Square, plugged into a merchant's phone (or tablet) takes the card swipe and processes the payment. With Square going on sale at Walmart, expect more merchants to be doing just that — though we don't expect Walmart to be one of them.

Tap and pay at 35,000 feet

Flight passengers have gotten used to flight attendants swiping their credit cards to collect payment for chicken wraps and mini bottles of Merlot. Now, WestJet, a Calgary-based airline, will try MasterCard's tap-and-pay PayPass system on some flights. NFC News reports that this system, once in place, will also allow NFC payments on mobile phones. But do passengers want to pass their phones to the aisle? American Banker quotes Brian Riley, senior research director with TowerGroup, as saying it might be a stretch. "While you might not mind handing your credit card momentarily to a stranger, the whole point of mobile payment is that you get to hold on to your phone; you don't want everyone touching it."

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 PayPal DevZone on X.commerce, a collaboration between O'Reilly and PayPal.


September 22 2011

ePayments Week: Google Wallet debuts

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

The mobile wallet is here

Google WalletGoogle Wallet officially launched this week with payment partners Citi and MasterCard on board and three other credit card networks (Visa, Discover and American Express) waiting in the wings. Version 1.0 is pretty much what Google said it would be when it announced the service last May. Google is launching it first on Sprint's network, and for now you need to have Samsung's Nexus 4G — though there are several other NFC-compatible devices in use today and more coming soon. You also have to find a MasterCard PayPass terminal — typically found in taxis, fast-food restaurants and convenience stores — to tap and pay. (If you're looking for the technical specs on how that works, MasterCard's site has a handy interactive that shows how tapping the phone emits a beep from the terminal.)

Payment with the phone is only part of the value proposition; Google knows that won't be enough to convince consumers to use it. The integration of payment with rewards, loyalty programs, and coupons is just as important — as this spoof video of the "first Google Wallet customer," lifted from the "Seinfeld" archives, makes clear. It's a small start, with only a narrow slice of the smartphone user base able to tap into it. But who can doubt the promise of one of the Google engineers starring in the intro video when he says, "We're constantly working to improve the wallet."

It's worth noting that PayPal president Scott Thompson demoed their point-of-sale solution last week, emphasizing that PayPal isn't waiting for NFC and is instead considering multiple payment options, including bar codes (like Starbucks) and PIN confirmations (as with direct billing). Earlier this summer, Ogilvy & Mather's Mobile Shopper survey found that far more consumers trusted PayPal to handle their mobile payments than Google (34.3% versus 19.5%). If Google's challenge will be to earn consumer trust, PayPal's will be to remain visible as Google and its high-profile partners push their solution.

Mobile payments deemed "very unimportant" by some consumers

If Sprint fails to report a wave of new customers who suddenly must have the Nexus 4G, it will come as no surprise to the folks at Lightspeed Research who reported this week that mobile payments are "very unimportant" to more than half of all smartphone users. Only 15% said that mobile payments were somewhat or very important. An article in American Banker quotes Jim Smith, president of Blue Dun consultancy, saying that consumers are basically satisfied with their current mobile payment solution, the credit card: "The killer application in mobile payments hasn't happened yet," Smith said. (Presumably, he hasn't seen Google's "Seinfeld" parody.)

Lightspeed also reported that mobile app usage differs widely among customers of different credit cards and banks. Among the interesting differences:

  • Smartphone penetration is highest among American Express and HSBC customers — both at 37%.
  • Discover is the only issuer with more than 50% of its customers still using "basic mobile phones." In line with this, they have the lowest penetration of smartphone users at 28%.
  • 37% of Wells Fargo credit card customers said they have downloaded the Wells Fargo mobile app — the highest penetration among the card issuers analyzed.

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

Who's that Android user?

Tech blog Mobile17 published a nice infographic on Android users, drawing on data from Nielsen, AdMob,, and others. One of their sources was a similar graphic from Mostly Blog published back in August, contrasting Android and iOS users. Among the more interesting findings in Mobile17's graphic:

  • Android owners talk on their phones about 15% of the time. They're on apps more than 56% of the time, not including email and messaging (19%) and web browsing (9%).
  • Android users are more likely than iOS users to be guys, more likely to be conservative, and more likely to be pessimists. They also are 80% more likely to have only a high school diploma (that is, no college degree) than iOS users.
  • That Samsung Nexus 4G you need to use Google's Wallet? It's not in the top ten most popular Android phones.

Of course, we can't infer simple conclusions about demographics and preferences for Google's operating system versus Apple's without also taking into consideration that Android mobiles are offered (by multiple handset vendors) at lower price points than the iPhone — so, income may be driving that preference more than other factors.

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.


September 09 2011

ePayments Week: Who will own your mobile wallet?

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

What's in your mobile wallet? (MMT) hosted a mobile payments conference in New York this week that brought together a diverse group of people from a few points along the value chain, including payment providers, credit card issuers, and consumer marketing services. With the mobile wallet at the center of the conversation, three questions recurred throughout the event:

  1. Who will control the mobile wallet?
  2. How do you get people to adopt it?
  3. What new features will a more intelligent wallet enable?

First, whose name will be on it? Google Wallet owns a tremendous amount of mind share given that virtually no one actually has it on their phone yet, and few people, even those in the conference's crowd, have any idea when it will reach wider distribution. David Schropfer of the Luciano Group, author of "The Smartphone Wallet — Understanding the Disruption Ahead," suggested that familiar brands will be key in helping consumers switch from a physical wallet to a digital one. "People don't like to make two significant changes at once — how they pay and what they pay with." If they're switching from plastic cards to their mobile phones to make payments, consumers will almost certainly want a brand they trust with their money involved, someone like Visa or MasterCard. But while credit cards are trusted, those companies so far have had little success in promoting their own digital wallet solutions. They're more likely to be an option on some other branded mobile wallet from Google, PayPal, Amazon, or even Isis.

How Google Wallet works

The second key question on everyone's mind was how to get people to use the services, whether that's how to get them to notice and download an app, how to get them to favor the app, or how to get them to respond to things the app wants them to do. Google again appears highly favored, given the number of times every day the average person interacts with the brand's services. PayPal or Amazon would seem to have a higher hurdle, given they have fewer touch points with consumers, but both have more than 100 million user accounts through which they could extend offers.

In terms of getting users to make transactions, it's clear that the mobile wallet of the future will have a lot more "pull" to it, as opposed to the "push" nature of our physical wallets. I wrote recently about Placecast, which uses geofenced locations to trigger alerts when opted-in subscribers enter a particular zone. I was interested to hear from Placecast's Blair Swedeen at the MMT conference that of the consumers who took action on offers, only 27% did so that day, with another 35% responding up to three days later — a longer shelf life than one might have expected for location-triggered offers.

Opinions differed as to whether or not mobile payments would replace cash. Tom Meredith of P2PCash suggested it wouldn't replace simple cash transactions, and Schropfer showed data indicating that while debit card usage had replace plenty of credit card usage, cash purchases remained fairly steady in the US. The story may be different in other countries. Schropfer also presented a slide showing a dramatic rise in the volume of Safaricom's M-PESA text-message payments in Kenya from 2007-2010, while cash usage in the country dwindled significantly. This suggests that the M-PESA payments have indeed replaced cash payments when available for small, simple transactions like taxis and bus rides.

There is no shortage of answers to the third question — what features will a more intelligent wallet enable? Certainly, those features will include the ability to set limits on payments (where and how much), better ways to prevent fraud (since phones offer a variety of ways to confirm identity), and obvious marketing tools like location-smart marketing and automated rewards and loyalty programs. Schropfer suggested another feature: retailers steering customers to their preferred method of accepting payment. In the physical world, retailers are pretty much at the mercy of consumers' payment options. But in a smart-wallet purchase, merchants will have a greater ability to dynamically offer discounts based on a consumer's choice of payment. A company might offer a bigger discount if you pay with, for example, PayPal, if the merchant can redistribute that value within the PayPal system without paying any fees. The retailer might offer a smaller discount with Visa and none at all with American Express since those options cost the merchant more. And, of course, those conditions might vary from day to day as different payment providers offer different incentives.

In short, there will be far more options and capabilities with a mobile wallet. But it also seems clear that, as often happens, a technology that enters the scene promising to make life simpler winds up making it more complicated.

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

Pew survey: One quarter of US adults use location services

About a quarter of Americans use the location-smart capabilities of their mobile phones to get directions or recommendations; far fewer use them to share where they are with friends and contacts. That's one conclusion from a Pew Research Center survey based on phone interviews with 2,277 U.S. adults last spring. The percentages are higher for smart phone owners. Only 4% owned up to checking in on services like Foursquare or Gowalla, while a slightly higher number had set up their social media services (Facebook, LinkedIn, Twitter) to show their locations when posting. (I have to wonder if that number has jumped higher since Facebook changed its posting settings to make location-aware posts easier.) The Knight Digital Media Center for digital journalism picked up on the Pew results to urge news media publishers to geotag their content.

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.


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.


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