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December 01 2011

Commerce Weekly: Cyber Monday lives up to hype

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

US online shoppers spent $1.25 billion on Cyber Monday

Screenshot from Amazon's iOS appWe knew we were going to spend a lot of money over the four days from Black Friday through Cyber Monday; all the TV commercials, digital ads, and forecasters told us so. But no one knew just how much until it was over — and no one saw how much of the spending was going to happen online. After it was over, when the purchase buttons had been clicked and the UPS trucks were rolling, Cyber Monday (Nov. 28) turned out to be the heaviest U.S. online spending day in history, according to ComScore. Shoppers spent $1.25 billion online, 22% more than on Cyber Monday 2010, the only other billion-dollar-plus day in online spending history. This year's Cyber Monday splurge capped a month of intensifying sales: more than $15 billion spent online since the beginning of the month.

If online sales growth was healthy, the growth in mobile sales was practically supernatural. PayPal Mobile reported a 552% increase in global mobile payment volume on Cyber Monday 2011 compared to the same day a year earlier. Of course, percentages are bound to look big when the baseline starts out low, and mobile payments have come a long way in the past 12 months. Claudia Lombana, PayPal shopping specialist, wrote on the company's blog that mobile sales volumes were 17% above those on Black Friday and volume was heaviest between 2pm and 3pm PST — suggesting that, on the East Coast at least, shoppers waited until the workday was (mostly) done.

So, does all this activity mean that consumer confidence has returned and we're about to buy our way out of the economic doldrums? Not exactly, writes Sheyna Steiner on Bankrate.com. Bankrate's November Financial Security Index reports that 42% of Americans say they plan to spend less this holiday season while only 10% expect to spend more. Black Friday and Cyber Monday mania may be less about kicking off an orgy of spending than they are about seeking the best bargains to stretch limited funds.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

A chat with a Groupon Now merchant

GrouponGroupon saw a big boost over the Black Friday-Cyber Monday weekend, too, reporting a 500% increase over last year for those four days. It's a little hard to keep track of whether Groupon is hot or not. Its Nov. 4 IPO blew past critics, raking in $700 million to become the biggest initial public offer since Google's in 2004. But within a few weeks, it saw its share price drop from its $26.10 opening-day closing price to $15.24 earlier this week. A boost in holiday sales could improve its standing, but many analysts are still saying the shares should be priced lower.

Whether Groupon's share price rises or falls, investors would do well to focus not on on its over-hyped daily deals, but on Groupon Now, the company's real-time discount service that lets merchants control when and how to offer deals. To find out more about it, I spoke with Dennis Cavanaugh the owner of 5 & Diner in Mesa, Ariz. Cavanaugh, who started out with a daily deal earlier this year, says he likes the flexibility of Groupon Now better. For example, he was able to increase one coupon offer of $10 for $20 worth of food up to $12 for the same offer and noted that there was no drop-off in uptake — so, he kept it there. "I can pause it, unpause it, change the hours of redemption, all the do-it-yourself things," he says, "and I don't have to call someone in Chicago. It's all in real time. There's no lead-time required on the decisions."

Cavanaugh says that Groupon Now customers are also more likely to spend over the coupon amount than customers who bring in coupons clipped from a newspaper — $6 to $8 more on average. He suspects it has something to do with the fact that they're affluent enough to afford a smartphone. And he notices that the Groupon Now offers bring in customers from further afield than the 3- to 5-mile radius that most of his customers come from.

Cavanaugh says he probably wouldn't make another daily deal offer: "I like Groupon Now better. Groupon gave us a huge surge in its booking period, but you can't control any aspect of it once it's out there. It was my first try, and I didn't know if the coupon was priced right. I know a lot more now. I think [Groupon Now] is a better tool for me to draw people in."

RIM pursues a mobile wallet

BlackBerry Curve 9380Research in Motion announced two more Blackberry devices that support near field communication (NFC) and RIM's small mobile-wallet trial with Telefónica, the Spanish telecom.

The Blackberry Bold 9790 and Curve 9380 join a few existing models that support NFC wireless communication, the leading contender for tap-and-pay wireless technology in mobiles. The RIM trial isn't at the scale of what Isis is planning in the coming year, let alone the real-world capabilities of Google Wallet on Sprint's Nexus S phones. At Telefónica's headquarters in Madrid, 350 employees will get Blackberries that let them make purchases and gain access to the company's buildings.

It's not exactly tap-and-pay on the Metro, but it's a start — one that RIM is hoping will slow its sliding market share to Android and Apple.

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


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November 10 2011

Commerce Weekly: Chasing down abandoned shopping carts

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

Inviting customers back to their carts

Shopping cartOnly three out of every 10 online shopping carts actually make it to checkout, according to email marketing vendor Listrak. That's 70% of carts lying abandoned in the virtual corridors of ecommerce. Listrak wants to improve those numbers. It's one of several vendors offering "shopping cart abandonment solutions" — essentially, programs to follow up with shoppers who've left the store and ask them, "Haven't you forgotten something?"

Retailers would love to close more of those sales: Listrak estimates $18 billion lost in sales to U.S. retailers every year. A Forrester study last May found that 89% of consumers had abandoned a shopping cart at least once. Forrester's authors attributed that high rate to growing user sophistication: as shoppers become more experienced online, they are more likely to comparison shop even as they move toward checkout. Other industry observers offer a simpler explanation: shoppers are shocked at high shipping costs. A 2006 study by Goecart blamed comparison shopping, high shipping costs, and plain old running out of time as the leading causes of abandonment.

Listrak sampled Internet Retailer's Top 1000 online retailers, loading up carts and then abandoning them ("Hey you kids! Knock it off!") to see who would follow up. Only 14.6% sent a follow-up email, and fewer still sent a second or third email which, Listrak's CEO Ross Kramer told Internet Retailer, is where about half of the revenue comes from. Among Listrak's suggestions to retailers: get the shopper's email address first.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

Intuit cuts payment rate for AT&T subscribers

Intuit announced a partnership with AT&T for its GoPayment mobile payment solution, which competes with Square. Like Square, Intuit offers a free card-swiping attachment that plugs into the audio jack of an iPhone, iPad, Android or Blackberry device, allowing anyone to collect credit card payments. Intuit's basic rate of 2.7% slightly undercuts Square's 2.75%, but AT&T customers will pay even less (1.7%).

Intuit originally charged customers $175 for the swiper dongle, but last January, in a bid to compete with Square, it began offering the dongle for free. Still, Intuit has struggled to gain the visibility that Square founder Jack Dorsey and COO Keith Rabois and high-profile investors like Richard Branson have brought to Square. This week's deal with AT&T is a reminder that Intuit is serious about GoPayment, which may actually offer more to merchants since it integrates with QuickBooks, its bookkeeping package that also targets small businesses.

PayPal embraces NFC (just a little)

PayPal has made something of a point of not jumping on the NFC bandwagon, emphasizing the technology-agnostic nature of its mobile payments platform. Demonstrations at PayPal's recent Innovate conference emphasized payment options like PayPal's Empty Hand system, which lets you buy things with only your mobile number and a PIN.

Still, NFC seems an inevitable part of the payments picture in the years ahead, and this week, PayPal delivered the peer-to-peer NFC payment technology that it promised last July. Shimone Samuel, Product Experience Manager for PayPal Mobile Applications, wrote on the PayPal blog that the technology for NFC P2P is included in version 3.0 of PayPal's Android app. No need for it in the iOS app yet, obviously, since the most recent iPhone upgrade disappointingly didn't include support for NFC.

As we noted back in July, in practice, the transfer of funds through PayPal's NFC system isn't substantially different from what was already possible using Bump, which sends the transfer through servers in the cloud rather than wirelessly between the mobiles. But the NFC system will let PayPal developers acquire experience with NFC wireless transfers, which should serve them well as NFC-enabled point-of-sale terminals begin to show up next year and beyond.

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.


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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 x.com.

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.


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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 x.com.

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.


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October 20 2011

Commerce Weekly: Google juices its Wallet

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

Google pairs payment with coupons in one tap

Google WalletGoogle expanded its Wallet this week. At some retailers — American Eagle Outfitters, The Container Store, Foot Locker, Guess, Jamba Juice, Macy's, OfficeMax and Toys“R”Us — the lucky few Sprint customers who have Google Wallet can pay for purchases, redeem coupons and earn rewards points with just one tap.

Google showed off a video (below) of its employees at these stores, demonstrating Google Wallet to lots of very excited people. Of course, as is clear on the video, Google is paying for their purchases as part of the demo, so that may have something to do with the enthusiasm.

Google also announced a deal with the New Jersey Transit Agency to enable Google Wallet purchases through some busses, vending machines and ticket booths. Stephanie Tilenius, Google's vice president of commerce, said "Transit has been a common element of every major successful NFC effort globally and is a critical component of Google Wallet's success." Isis, which is likely to become one of Google Wallet's main competitors when it begins showing up on phones sometime next year, feels the same way. Last spring Isis announced that one of its first trials will be with Salt Lake City's Utah Transit Authority.

Announcements like this may come and go like streetcars, but the real shift will come when more NFC-capable phones are available on more carriers. Currently, only Sprint subscribers holding Nexus S 4G phones can tap and pay with Google Wallet. HTC, LG, Motorola Mobility, RIM, Samsung Mobile and Sony Ericsson announced en masse last month that they would introduce NFC-enabled mobile devices that implement Isis's NFC and technology standards, presumably sometime in 2012. But it will still take time before secure NFC phones are mainstream. Even so, Juniper Research is bullish on the uptake curve, predicting that NFC mobile contactless payments will reach nearly $50 billion globally by 2014.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

PayPal powers eBay's results

EBay reported strong growth this week through its commerce channels. Fueled by PayPal and mobile payments, Q3 revenue was 32% greater than last year ($2.97 billion compared to $2.25 billion in 2010). In a conference call with analysts, CEO John Donahoe said the company expects PayPal's payment volume to exceed $3.5 billion in 2011, five times greater than it was in 2010. At last week's Innovate conference in San Francisco, the company showed off plans to bring PayPal to the physical point of sale. Donahoe said the company will begin rolling those payment systems, which don't rely on NFC but rather pay through the cloud or with direct-billing technology, as soon as the fourth quarter.

Also this week, Donahoe discussed eBay, PayPal and the future of payment at Web 2.0 Summit. Video from his Q&A session is below:

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.


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September 29 2011

ePayments Week: Will NFC add value?

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

Square's COO questions NFC

SquareSquare's chief operating officer Keith Rabois went against the grain this week and questioned whether there was any value to be had by implementing near-field communications (NFC) for mobile payments. To be fair, he was at the GigaOM Mobile Conference responding to Om Malik's question of whether the short-range wireless function on mobiles would make Square's card reader redundant. Rabois called NFC "a technology in search of a value proposition," saying it's not clear who it helps. The process of swiping a credit card, he continued, is "very etched in the American consciousness ... and the Square card reader allows us to take advantage of that, to allow people to sell things more successfully without changing people's behavior."

He may have a point that the particular technology matters less than the mobile wallet itself. We could do pretty much the same thing by using through-the-cloud technologies (as Bump does) or direct billing (like Boku or Zong). But I think he's overlooked the clear value that seems likely to come to merchants as consumers ditch plastic for mobile wallets.

To name just three:

  • Merchants can administer reward and loyalty programs more efficiently if they're managed through phones rather than on rubber-stamped cards.
  • Merchants can deliver location- and time-specific coupons if they are acquainted with a customer's phone. Placecast is showing how you can deliver offers within a geofenced area. Merchants will also have the opportunity to move discounts quickly if they need to clear inventory. All of that is theoretically possible today with Twitter, but first you have to get them to follow you. Once someone has paid with their phone, presumably it's a lower barrier to get them to agree to receive offers via that phone.
  • Merchants can dynamically steer customers to their best payment option. If PayPal offers a lower percentage for a period than the merchant's credit card service, the merchant can offer products or services at a discount and let the customers choose on their devices.

The benefits for consumers may be a bit less clear and are likely to be a tradeoff: it's our data that we'll be giving up in exchange for being on the receiving end of those benefits listed above. In other words, your digital trail in exchange for daily coupons and every 10th cup of coffee free.

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

Amazon's Kindle Fire doesn't have to be as good as iPad to steal market share

Amazon FireShould Apple worry about competition from Amazon's Kindle Fire? The quick consensus seems to be "no" since these are different devices for different functions. Still, I couldn't help myself from making the comparison between this contest and the dramatic rise of Android handsets against the near leveling of the iPhone market. Most reports on the Android versus iOS competition seem to pit the two evenly, as if it were in bad taste to mention that many Android phones cost hundreds of dollars less. Geeks might choose their smartphones based on their affection for Google or Apple. But you only need to visit the AT&T kiosk in your local mall and watch the purchasing decisions to get a truer picture of what's driving this race: cost. Apple's iPhone may be an object of beauty, inside and out, but when you're on a tight budget, you'll put up with the carrier's user interface.

The same thing could happen with Fire and iPad. Fire may not offer anywhere near the same capabilities as the iPad — though with its ability to access web services via its Silk browser, it may not lag far behind. But there are many millions of customers who won't have to think long and hard to save $300 if they can still have movies, TV, books, games, and the web, all on a color touchscreen.

Steven Levy in Wired noted that even if Fire isn't a threat to Apple's iPad, it will certainly be one to Barnes & Noble's Nook and to Netflix. At a time when half of Netflix's membership seems to be furious with the company, many are sure to notice they can get a whole new world of streaming for $79 a year from Amazon Prime.

Mobile broadband is less popular as an add-on

Customers use more mobile broadband services, and they use mobile broadband more frequently, when the capability is built into their devices and not used as an add-on (for example, a USB dongle or stick). This not-too-surprising finding comes from YouGov UK's recent survey of 2,552 British mobile broadband users. It reinforces the suspicion that the easier you make it to get to online services, the more likely they are to get used. Certainly, there's some allowance built into those results for the dongle or stick getting lost or just stuck at the bottom of the backpack. But it also seems likely that those who buy a device that's capable of reaching the web are more likely to use it than those for whom it was an afterthought.

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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September 26 2011

Getting physical with Android, NFC and the ADK

Android is rapidly extending beyond the phone and becoming a hardware hub, with capabilities that allow a wide range of applications and interface possibilities. Features like Near Field Communication (NFC) and the Open Accessory Development Kit (ADK) are opening new arenas for developers.

Brian Jepson (@bjepson) is an O'Reilly editor and hardware hacker who's recently been focusing on making things with technologies like Arduino and Android. Jepson and Tyler Moskowite (@tmoskowite), a programmer and engineering intern at Make Magazine, will be presenting a workshop on "Getting Physical with Android: Open Accessories & NFC" at the upcoming Android Open Conference. I recently spoke to Jepson and Moskowite about the convergence of Android and hardware hacking, and what it might mean for the Android ecosystem.

Our interview follows.

What does Android's openness allow developers to do?

Android logoBrian Jepson: I think the biggest thing is that it allows developers to experiment. On iOS, you have to spend money to even deploy apps to a phone that you own. And unless you put an app in the App Store or sign up for the Enterprise or Academic programs, you can only distribute apps to 100 devices total. It's cumbersome. I love that you can "sideload" apps on Android: make an app, distribute it outside the Android Market, and people can use it.

Tyler Moskowite: Allowing developers to reproduce their own versions of the Android operating system has resulted in many custom versions of Android. The most notable one is Cyanogen Mod, which provides the base for lots of custom Android systems.


What kinds of things are makers building with NFC, the Accessory Development Kit, and Arduino?

Brian Jepson: I haven't seen much being done with NFC, though I did a wacky demo with it that involved Processing, Arduino, and Twitter. But there have been lots of cool things done with the ADK. I've seen everything from tablet-controlled dancing robots to a cell-phone-controlled ball maze inspired by the life-size labyrinth at Google I/O.

There have been interesting projects going on with Arduino since before the ADK. In fact, I built a variation on Tero and Kimmo Karvinen's Soccer Playing Robot (from Make: Arduino Bots and Gadgets) and brought it to Google I/O. This combined Android and Arduino, but they communicated over Bluetooth instead of a cable, the way the ADK currently works. Tero and Kimmo's robot is one of my favorite Android/Arduino projects. Amarino is also very cool, though it's more of a platform for connecting Arduino and Android.

How big a problem is fragmentation in the Android ecosystem?

Brian Jepson: It's more noticeable to me because I work with things like NFC and ADK that require a very recent version of Android. I don't know how big a deal it is for lots of other folks. I can look at the fragmentation dashboard, and yeah, it's not pretty. At least Android 2.x is dominating. But it's a problem and a headache for developers. I figure Google can mitigate the problem, but I don't see them ever making it go away.

Tell us a little about the Mini Maker Faire event at Android Open. What kind of makers are you looking for?

Brian Jepson: We are looking for anyone who has made something cool using Android and related technologies. We'd love to have a broad spectrum of crafts, electronics, robots, and so forth.

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

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July 14 2011

ePayments Week: Contactless payment (and zombie survival tactics)

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

PayPal demos tap-to-pay

PayPal demonstrated peer-to-peer payments using near-field communications (NFC) at this week's MobileBeat conference. They showed how two mobile users could send payment to each other by tapping phones and confirming the transactions in the PayPal app. Laura Chambers, PayPal's senior director of PayPal Mobile, wrote in a blog post that they expect to make the service available publicly later this summer. Right now, however, there's only one NFC-capable mobile phone in the U.S. market — the Nexus S — so both the payer and the receiver would need to have that device.

A PayPal video (below) shows the recipient initiating the transaction, requesting $10 and then holding her Nexus S up to someone else's. Both phones buzz and vibrate, and the recipient gets a request, which they can confirm. Both get an email confirming the transaction.

In practice, PayPal's system doesn't seem too different from what's already possible with Bump, an app that lets mobile users share images or music, or send money from one phone to another — although Bump sends the transaction over the network rather than via NFC. Bump says its app has been downloaded more than 40 million times on Android and iOS platforms, but it still lacks the reach of PayPal with is 94 million users. What's more, by launching its NFC capabilities now, PayPal will already have experience under its belt as more NFC-capable phones (and point-of-sale terminals) begin to appear later this year and next.


NFC tap-and-pay wasn't the only gesture PayPal made this week to show it's getting ready for the future. CEO Scott Thompson put out the challenge for five Bay Area employees of PayPal to try to live their lives for a week with only PayPal purchases, and apparently they've found five willing to give it a try. It'll be interesting to see how they secure necessities like food and gasoline (not to mention rent or utilities, if those are due that week). But that experience may serve them well if PayPal's other publicity stunt of the week transpires: the company produced a funny video that suggests PayPal's one-tap payment system could prove useful during a zombie attack. (The short video is worth watching not just for laughs but also to see PayPal's vision of how one-touch user clicks will be enabled on everything from soda machines to rental car windows.)



eBay buys Zong

In other eBay/PayPal news, eBay continued its acquisition trend, announcing it would pay $240 million for Zong, one of the leaders in direct billing via mobile phone accounts. Zong, Boku, and Bill2Mobile all offer services that let subscribers buy digital goods — often something in an online game — by entering their mobile number online and replying to an SMS text; the charge shows up on their cell phone bill. At times, these services have touted their capabilities as a form of banking for the "unbanked," though in practice many of the unbanked are social game players who are too young to have bank accounts.

Zong brings along its direct billing relationships with 250 telecom carriers around the world, and it's easy to imagine that users will be able to put PayPal payments on their cell phone bills. A spokeswoman for eBay, Sarah Lasky, told me the converse is already true in some countries such as Malaysia where, through a deal with telco Maxis, customers can use PayPal to pay their mobile phone bills.

Back in April, Zong competitor Boku announced a trial with Germany's Telefonica 02 to pay for online purchases of real-world (that is, non-digital) goods. Lasky said there are no plans so far to use Zong this way over at PayPal.

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The three types of social commerce

Oodle CEO Craig Donato has posted an interesting short essay on social commerce on ReadWriteWeb. Donato breaks social commerce into three elements: social shopping, social marketing, social trading. Social shopping is nothing new, of course. Shoppers have always traveled in pairs or groups and shared opinions about purchases. But as commerce has shifted online over the past 15 years, the social aspect is now racing to catch up. Social marketing can be seen as merchants wanting to join this conversation. Donato points out that, here too, this is a restoration of a traditional two-way conversation that has only become a one-way marketing monologue in the era of mass communications. Social media offers a return to the days when buyers had a direct voice to the merchants, one that helps them decide what and how to sell.

Trading, Donato points out, is the weakest area right now — a hyperlocal activity that's often managed through donations or trading goods with neighbors (sometimes with an assist from online services like Neighbor Goods or Freecycle). While there may still be opportunity here, it's clearly the most difficult to monetize, given the very nature of these money-less transactions.

Oodle, the world's largest aggregator of online classifieds, also powers Facebook Marketplace, which figures prominently in a new report from JWT on "The Rise of Social Commerce." Perhaps not surprisingly, the report finds the Millennial generation driving social commerce, especially on Facebook where "they spend so much time ... they might as well shop there, too." The report says Millennials are more interested in conducting commerce through Facebook than Boomers or Gen Xers but, paradoxically, Millennials are also more concerned about privacy issues, particularly when Facebook shares information with third parties. Even so, 59% of Millennials in the survey say they appreciate personalized recommendations that help them cut through the volumes of marketing information. Now, if merchants could only find a way to offer personalized recommendations without knowing much about you, they'd really be on to something.

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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July 07 2011

ePayments Week: AliPay gets physical

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

China's AliPay develops barcode payment system

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

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

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An acoustic footprint for hyperlocal navigation

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

Juniper report: $670 billion in mCommerce in 2015

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

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June 09 2011

ePayments Week: eBay's ecommerce platform

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

EBay buys rest of open source ecommerce platform Magento

MagnetoEBay's announcement this week that it would buy the 51% of open source ecommerce platform provider Magento that it doesn't already own moves eBay closer to its goal of having an end-to-end commerce platform that integrates online, mobile, and physical retail spaces. Earlier this year, eBay put up $2.4 billion to buy GSI Commerce, which provides eCommerce services for retailers whose primary sales channels are physical retail stores. By integrating Magento's platform, which already serves tens of thousands of merchants online, eBay widens the scope of its merchant partners and the services it provides to them.

A video message from eBay CEO John Donahoe (below) lays out the ambition for the company's newly formed Open Commerce Platform group. In the presentation, Donahoe says Magento's capabilities complement those of GSI to make eBay "the strategic commerce partner of choice for retailers of all sizes." As part of this effort, eBay is adopting and expanding on its subsidiary PayPal's developer program, changing its name from X to X.Commerce ahead of this year's developer event, which is scheduled for October.

EBay and PayPal have supplemented these major purchases with several smaller scale acquisitions this year, detailed nicely by Ryan Kim on GigaOm. These purchases include: Milo, for helping people find products locally; Where, with its location-based ad services; and Fig Card, which helps merchants accept payments (including as SMS texts).

Magento's senior executives are clearly pleased in their video announcing the deal, which shows them in front of palm trees with downtown L.A. in the background — perhaps to emphasize their independence from Silicon Valley? It will be interesting to see how eBay and PayPal treat the open source version of Magento, as eBay is eager to expand developer interest in its entire platform and the open source version represents a broader playing field that expands their developer audience. While there are many ways to measure the success of an open source development project, one of those is a successful commercial exit strategy. And as Alan Shimel noted on NetworkWorld, Magento's sale represents "another commercially successful open source project that returned money to its investors," which, he adds, is further proof of a healthy open source ecosystem.

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.

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Report: $50 billion in NFC payments by 2014

A bullish report from Juniper Research released this week proposes that NFC payments — that is, mobile transactions that rely on near-field communications wireless technology — could rocket from about zero today to $50 billion in only three years. That's a steep climb, and it will only be possible with the support of a lot of other growth curves working together. That includes wider NFC adoption by handset makers, broader uptake of NFC-capable smartphones, agreed-upon ecommerce standards for NFC payments, and greater consumer acceptance.

On that last point, CNET's report on the Juniper study pointed to a recent survey by Mastercard that displayed a striking generational gap on the issue of comfort with payments. Mastercard's survey found that 63% of those between 18 and 34 said they would be comfortable using their phone to make a purchase, while only 37% of their older cohorts said they were comfortable using their newfangled contraptions in this way. It will be interesting to see how the carriers and merchants promote the security and convenience (or appearance thereof) of mobile payments to this older demographic. And, of course, they may not need to: if mobile payments follow the path of other tech innovations like the web, texting, and Facebook, it's likely that where the young'uns lead, their elders will follow.

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June 01 2011

Search Notes: Connecting Google's dots

Here's what recently caught my attention in the search space.

Google Wallet

Google WalletLast week, Google unveiled Google Wallet, which on the one hand, might be the future of payments, but on the other hand, seems like it's just using your phone instead of your credit card to pay for things. And phones so far are bulkier to carry around than credit cards. But Google says:

... because Google Wallet is a mobile app, it will do more than a regular wallet ever could. You'll be able to store your credit cards, offers, loyalty cards and gift cards, but without the bulk.

Wallet will be integrated with Google Offers (Google's answer to Groupon) and one can imagine the possible future integrations. For instance, Google could manage travel from start to finish by integrating elements of its ITA acquisition for booking, Hotpot and Places for reviews and maps, and Wallet for paying on the go.

Google Wallet will be available this summer, initially on the Nexus S.

After the unveiling of Wallet, PayPal sued. They said that Google had been nearing the end of negotiations with PayPal to make it a payment option in the Android marketplace, but instead of signing, Google hired away the PayPal executive they'd been negotiating with and built their own version.

Of course, this isn't the first time Google has been sued for hiring talent away from a competitor. And since they had the two key ex-PayPal employees introduce Google Wallet publicly, they weren't exactly keeping things on the down low to avoid this lawsuit.

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Google Correlate: Mine search trends using uploaded state-based or time-based data


Google CorrelateGoogle Correlate, new in Google Labs, takes the idea behind Flu Trends and makes it available to anyone, for any data. You can enter data by state or by time and find out what searches are most closely correlated. You can also simply enter a search term and see what other queries are most closely correlated (by state or by time).

This is all U.S. data for now. Google Correlate was launched in Labs, so hopefully when it graduates from there it will be launched worldwide.

Google's comic book about the product stresses that correlation does not imply causation. This data simply shows similar search patterns. But data patterns can provide insight. Flu Trends, for instance, predicts when and where flu is spreading based on how much people are searching for flu-related information. "We found aggregated flu-related queries which produced a seasonal curve that suggested actual flu activity," Google notes. They have corroborated these trends historically with government data about flu activity.

Google's worldwide market share

This column is "Search Notes," not "Google Notes," so why so much Google coverage? The fact is Google is the dominant search engine worldwide, more so even outside the U.S. Along those lines, as I was finalizing slides for a conference session in Germany, I double checked Google's search share there. I found that Google's share was relatively unchanged year over year, at more than 90% for Germany, France, the UK, and Spain. This week, comScore noted that Google is at more than 90% share in Latin America as well.

Removing content from Google

Last fall, I wrote two fairly detailed articles about removing content from Google search results:

Now, Google has made it easier for content owners to remove content. Just verify ownership of your site in Webmaster Tools, and then you can specify what pages from your site you want Google to remove from its results.



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May 27 2011

Radar's top stories: May 23-27, 2011

Here's a look at the top stories published on Radar this week.

Mobile apps and the quiet handling of data
PC-based applications often have to get clearance from users before they can gather and transmit data. Mobile apps, however, follow a different path. Peter Bennett takes an in-depth look at the differences.

Want to know where to build a new store? Check your human density data
During a recent interview, Skyhook co-founder and CEO Ted Morgan discussed "human density data." Learn what that is and how Skyhook's SpotRank product harnesses it.

Lessons of the Victorian data revolution
Transaction costs. Crowdsourcing. The politics of data. You might think these are modern concepts, but Pete Warden traces all of them back to the Victorian age.

At the eG8, 20th century ideas clashed with the 21st century economy
While the first eG8 Forum in Paris featured hundreds of business and digital luminaries, some of the policies discussed should be of serious concern to citizens around the world.

Google opens its Wallet
Dave Sims digs into Google's new Wallet to see if this latest combination of mobile devices and a payment system is ready for mainstream adoption.


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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.

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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.


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May 05 2011

ePayments Week: Report says developers chill on Android

Here are some of the payment stories that caught my eye this week.

Report: Android developer momentum stalls

Android illustrationEven as more consumers are craving an Android phone, developer interest in the platform has stalled — for now. First, the consumer angle: When Nielsen surveyed smart phone subscribers last summer, it found one third of them craving an iPhone, 26% with their eye on an Android device, and 13% sticking with Blackberry. Nielsen asked again during the first quarter of 2011 and found interest in Android had grown to 31%, just edging past iPhone's 30%. Blackberry dipped to 11%.

We can speculate on the causes for consumers' fickleness. Last summer, the iPhone 4 had just been released (in June) so Apple's marketing machine was in full swing. In the dog days of summer, nothing demonstrated early adopter-tude more than swapping the beveled edges of the iPhone 3 for the boxier look of an iPhone 4. By the fourth quarter, enthusiasm around Apple's smartphone had settled down while several handset makers (HCL, Samsung) and carriers were promoting new Android phones. At year's end, Android had the steepest curve on smartphone growth and was second only to Symbian in global market share.

So why has enthusiasm for Android dampened for developers in the months since? Surely they're not all swooning over the charms of the white iPhone.

Here's a more rational explanation: A report released by developer platform Appcelerator and market research firm IDC says "developer momentum is shifting back toward Apple as fragmentation and tepid interest in current Android tablets chip away at Google's recent momentum gains." The Appcelerator-IDC Q2 2011 Mobile Developer Report also noted a minor shift down at the lower end of the pack, with Windows 7 inching ahead of RIM Blackberry — no doubt because of Nokia's new alliance with Microsoft. But even so, it said that "nearly two-thirds of respondents believe that it is not possible for Microsoft, RIM, HP, and Nokia to reverse momentum relative to Apple and Google."

Perhaps surprisingly, the waning interest isn't driven by money — at least not directly. As Jason Ankeny notes on Fierce Mobile, the report found that only 19% of developers thought they could make more money with iOS. I'm not sure why only 1 in 5 think that, since iOS users seem to be a more lucrative market. Research from IHS iSuppli predicts that Apple's App Store will continue to account for about three-fourths of the market in mobile apps, even as the size of the pie grows from $2.1 billion in 2010 to $8.3 billion in 2014. ISuppli's release includes predictions on the other numbers (and they're nicely summarized by John Paczkowski on All Things D.)



Facebook Credits get noticed


Interest in Facebook Credits is rising, sparked partly by the launch of Facebook Deals and the news that members can use Facebook Credits to purchase the deals — in effect, using Credits as virtual currency to buy real-world goods. A Wall Street Journal report speculating about the IPO value of Facebook talks mostly about its growing dominance in online ads (in the first quarter of this year 31% of all online display ads were served on Facebook) but also cited Credits as a yet-to-be-exploited opportunity. And an article in the Chicago Tribune cites an upcoming report from Social Times Pro that estimates that $600 million will pass through Facebook Credits in the 12-month period that starts in July 2011.

In the midst of all this speculation, Jesse Stanchak, an editor with Smart Brief, has an interesting read on the future of Facebook Credits seen from the perspective that it is a form of scrip. Scrip, Stanchak writes, tends to work under any of three conditions: when money is scarce, when users think they're getting a better deal by using the scrip, and when the retailer controls the distribution mechanism. Facebook, Stanchak writes, aims to do all three.

Another eBay/PayPal acquisition at the register

PayPal made yet another acquisition that signaled the online payment service's desire to extend its service into the physical space. Back in March, PayPal parent company eBay said it would buy GSI Commerce, which supplies e-commerce services to retail stores. Then in April eBay purchased Where, a mobile app for finding local deals. Now, in a deal that appears to bridge the gap between these two services, PayPal is paying an undisclosed sum for Fig Card. The Boston-based startup (which launched just last year) offers a $5 USB dongle that lets merchants accept SMS text or NFC wireless payments. A Fig video (below) is light on details, but it demonstrates the service, which runs a little like Starbucks' mobile app except that it doesn't rely on a bar code scan and it transmits an image of the customer to the merchant for an added bit of security.

Here's the Fig demo video:

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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April 14 2011

ePayments Week: Android's predicted ascendance

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

In the future, half the world will be Android

Well, half the smart phone world, anyway. Gartner Research is predicting that Google's Android operating system will continue its drive to become the most popular mobile OS in the world and, by the end of 2012, could own about half the market. Windows' mobile will pick up share, too, more than doubling to about 11% over the same time. Where will all that market share come from? Gartner sees Symbian dropping like a rock as Nokia ports over to Windows. Perhaps more surprising, Mashable's Ben Parr noted with a tad of skepticism, is Gartner's prediction that Apple's iOS will peak this year and begin to dip by next.

Predictions are always a little sketchy, but there's no doubt Android is gaining share and significantly reshaping the smartphone and mobile markets by packaging its app-friendly platform onto inexpensive hardware. This week AT&T announced a prepaid smart phone, the LG Thrive, following the lead of Verizon, which began offering prepaid smart phones last autumn on RIM, WebOS and Android handsets. Google has also been working with telecom carriers to make buying apps from its marketplace as seamless as it is over at Apple's App Store. AT&T and Sprint will now add the app cost to your monthly bill, so no need for a credit card or even Google Checkout.

Where is it all heading? Gigaom's Om Malik talked with Juniper Networks chairman Pradeep Sindhu to get his thoughts. In a brief conversation that ranges from the IBM 360 to the cloud, Sindhu made the point that smartphones as platforms will not only place greater demands on the network but will also change the way we think about it, blurring the lines between what is mobile and what is web. For a more hands-on and tactical view of where it's going, developers might want to look at the sessions in the Android track at next month's Google Developer Conference, May 10-11, in San Francisco.


NFC in China

Bus and subway riders in China have already been using prepaid cards equipped with near-field communications (NFC) technology to pay for their rides. With the infrastructure to receive their payments already in place, it should be a relatively easy switch to put the NFC card inside their phones instead of their wallets. NFC World's Christopher Brown said that Watchdata, which produces both types of cards, has produced more than 3 million NFC SIMM cards for mobiles, complete with a little antenna that sticks out of the card slot. The third million shipped in the past four months, Brown noted, so the pace is quickening. China Telecom has distributed most of the cards, but competitor China Unicom is also trying out the phone cards, launching a program in Beijing that goes beyond transit into theaters, markets and restaurants.

No word on whether the external antenna is an annoyance. But we're pretty sure it's a temporary inconvenience since handsets in the not-too-distant future will probably put the NFC circuitry and its antenna inside the phone.


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Quova's Location Developer Challenge wants to know: Where U At?

Quova, which offers ways to help websites know the locations of their visitors, is holding a Location Developer Challenge to promote its nascent developer program. If you have an idea for an interesting location-aware web app, or a fresh take on visualizing location data, take a look at the details. They'll be spurring on promising contestants with monthly spot bonuses of $500 and then sending the winner to the Future of Web Apps conference in Las Vegas June 27-29, to show off the winning app.

While much of the buzz around geolocation centers around mobile apps, Quova's business focuses on fraud detection and geographically targeted ads for website visitors from desktop and laptop browsers. "We're not a mobile play," said company spokeswoman LaurieAnne Lassek in a phone interview, "but the web is not going away." Quova draws on a database of 3 billion publicly available IP addresses, mostly in North America and Europe. It opened its API last November and is just beginning to build a developer program. Registering for the program gives you access to the API and up to 10,000 queries on their data. "When you start to monetize the product, we work out a revenue-sharing deal," Lassek said.

Note: Quova will be at next week's Where 2.0 Conference in Santa Clara, Calif.

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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April 07 2011

ePayments Week: Tapping our hunger for Facebook Credits

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

IFeelGoods wants to help you get your Facebook Credit fix

IFeelGoodsThe winner of the Startup Showcase at the Web 2.0 Expo in San Francisco last week wants to make a business based, in part, on their understanding that people want Facebook Credits but don't want to pay for them. IFeelGoods, which describes itself as a virtual goods platform, helps companies offer Facebook Credits as incentives for trying or buying.

Scott Silverman, co-founder and VP of marketing at IFeelGoods, says the offer is enticing because, like shipping, virtual currency is something that people want but don't necessarily feel is worth paying for. "You look at the demographics of people who are playing [social games on Facebook]," Silverman said in a phone interview, "and it's people who are controlling household spending." These social gamers start playing free games and "they get wrapped up in it, they want to advance, but it's uncomfortable for them to spend money [on Credits]." But if they can find a way to get those credits "off budget" as it were, they'll go for it.

To test their theory, IFeelGoods ran an A/B test of ads on Facebook — ads targeting shoppers, not necessarily gamers. One ad offered $5 off a purchase at an Internet shoe retailer and an identical second ad offered 50 Facebook Credits, worth the same cash value. Silverman says the clickthrough rate was double on the ads that offered credits. Their theory: when presented with a chance to earn credits for doing something they would do anyway (buy shoes), gamers grab them.

These kinds of offers are sure to become widespread as Facebook finds more opportunities, beyond social games, for members to buy or rent things with Credits. Last month Facebook dipped a toe in the movie rental business in a deal with Warner Brothers that offered a stream of 2008's "The Dark Knight" available for 30 credits ($3).

If you're wondering how far this can go, read Venessa Miemis' thoughtful piece, "The Bank of Facebook: Currency, Identity, and Reputation." One of the interesting ideas in her essay comes from Kevin Kelly, who points out that currency evolves from community, and that by creating a community of more than 500 million, Facebook has laid the groundwork for a commercial explosion. As that happens, IFeelGoods wants to be at the forefront, handing out the coupons.


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American Express serves up mobile plays

A couple of announcements from American Express in recent weeks show that the number three credit card provider has been laying the groundwork for a major mobile push. In mid-March they demonstrated a new partnership with Foursquare that puts them at the forefront of geolocation commerce. AmEx cardholders attending SXSW were encouraged to link their card to their Foursquare accounts. Like all Foursquare users, they were sent special offers from nearby merchants. But when they checked into those offers, they were given an option to load their AmEx cards with the value of the deal, which they could redeem on checkout. It was an experiment, but one that combined two important trends in ways that many other companies have been trying to achieve: make an offer based on a person's location, then make it easy (and a bit enticing) for them to redeem the offer using their mobile phones.

A week later AmEx announced Serve, a new debit-based payment service that (among other things) lets you send funds to other people — just like PayPal. As we reported a couple weeks ago, Visa announced partnerships to do the same. Both represent yet another move to nibble away at services that once-upon-a-time were offered only by banks.

The Street's coverage of the new AmEx service said it had been in the works since January 2010 when AmEx paid $300 million for Revolution Money, the Steve-Case-backed "e-wallet" platform. To earn that money back, AmEx's Serve will carry transaction fees that some users might find a little steep compared to comparable services: free for six months, but after that $0.30 to load the card, a 2.9% fee on transactions, and $2 for an ATM withdrawal. Membership has its privileges, but they don't come cheap.

Isis plans a tap-and-pay transit trial

Isis, the joint venture between three (or maybe two?) telecoms, AT&T Mobility, Verizon Wireless, and T-Mobile, signed a deal to test a near-field communications (NFC) payment service with the Utah Transit Authority next year. Katie Deatsch at Internet Retailer writes that the Salt Lake City pilot will let transit riders carrying Isis-enabled NFC chips (which aren't in production yet) to tap and pay with their phones — something that subway riders in Chicago and Washington, D.C. can do today with chip-enabled cards. As we noted in our post on Isis in February, the consortium is aiming to get Isis chips into phones by spring 2012, so there's plenty of time to get the hardware in place.

Welcome to the real world, Boku

BokuBoku, which offers direct billing on mobile phone bills for digital and virtual goods, has teamed up with Telefonica O2 in Germany to offer its direct-billing service for real-world goods. Subscribers will be able to pay for goods (ranging from about $0.13 to $42) by entering their mobile number during checkout. The system sends a quick text to the phone, and hitting "reply" confirms the purchase. The amount is added to the subscriber's next mobile phone bill. It's a big step out into the world of real goods for Boku, which earlier this year received a vote of confidence from investors to the tune of $25 million. Also significant: It's a test of whether the mobile phone will work as a de facto credit and purchasing device for buyers who don't have (or don't choose to use) a credit card or bank account.

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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March 24 2011

ePayments Week: Visa moves into PayPal territory

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

Visa announces P2P payments

PayPal customers have grown used to the ability to send money to someone just by typing in their email address — that's much easier and quicker than writing out a check and getting it in the mail. Now payments giant Visa is moving into the P2P payments market with two partnerships that will let its 1 billion cardholders send funds to someone via their 16-digit Visa number (hard), phone number (easy) or email address (even easier). Penny Crosman at Bank Systems & Technology detailed the deals, explaining that they'll make use of a couple of existing services by partners: Fiserv's ZashPay, which lets a Visa card holder send money to someone else's bank account, and Cashedge's Popmoney, which lets you send money to someone via their mobile number or email address. Visa expects to bring the services online this summer.

Meanwhile, Visa continues to experiment with contactless payments, most recently in a trial with Australia and New Zealand Banking Group. Fifty employees used an iPhone sleeve that includes near-field communications (NFC) hardware. MasterCard Worldwide's Vice President of Strategy and Corporate Affairs David Masters applauded the trial with the backhanded compliment that it looked a lot like the proof-of-concept trials that MasterCard launched … in 2007.

Groupon gets even more local (and more daily)

GrouponGroupon announced some details on a secondary service it intends to launch next month. Groupon Now promises to be more timely and more local than its original offer. In Groupon 1.0, users buy a coupon to be used at some future date. Groupon Now intends to offer more dynamic deals, managed by the merchants themselves and delivered to mobile devices. This could be used to take advantage of a big conference in the area or to boost business when things are slow. As Groupon founder and CEO Andrew Mason explained to Bloomberg Businessweek: "The daily deal is like teeth whitening and Groupon Now is like brushing your teeth. It can be an everyday thing to keep your business going."

Groupon also announced that its president and chief operating officer Rob Solomon was stepping down (and returning to Woodside, California — or "God's Country" as Mason called it in an internal memo). Groupon has grown from about 200 employees to more than 6,000, and Solomon and Mason both said the company needed a different kind of operations exec to manage a team that size.

Where 2.0: 2011, being held April 19-21 in Santa Clara, Calif., will explore the intersection of location technologies and trends in software development, business strategies, and marketing.

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Apple to Amazon: App off


If nothing else, Apple's lawsuit against Amazon for calling its upcoming app store for Android apps, well, "Appstore" has raised the visibility of Amazon's effort.

As we reported back in January, Amazon's scrutiny and classification of Android apps will likely be a little more rigorous than Google's app marketplace (with its 200,000 apps), though less stringent than Apple's care for iOS apps. But the announcement of Amazon's upcoming marketplace didn't travel much wider than developer circles. Now everyone with an Android phone (or without) knows that Amazon has an app store — or whatever they wind up calling it.

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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February 22 2011

Four short links: 22 February 2011

  1. Cluster (github) -- Node.JS multi-core server manager with plugins support. Hot restarts, and other goodness. (via The Change Log via Javascript Weekly)
  2. Nokia Culture Will Out (Adam Greenfield) -- Except that, as realized by Nokia, this is precisely what failed to happen. I experienced, in fact, neither a frisson of elegant futurism nor a blasé presentiment of everyday life at midcentury. I was given an NFC phone, and told to tap it against the item I wanted from the vending machine. This is what happened next: the vending machine teeped, and the phone teeped, and six or seven seconds later a notification popped up on its screen. It was an incoming text message, which had been sent by the vending machine at the moment I tapped my phone against it. I had to respond “Y” to this text to complete the transaction. The experience was clumsy and joyless and not in any conceivable way an improvement over pumping coins into the soda machine just the way I did quarters into Defender at the age of twelve.
  3. NextGen Education and Research Robotics -- virtual conference on robotics in education.
  4. Homemade Arduino Printer (Instructables) -- made with an Arduino, two dead CD/DVD drives and a marker pen. Clever hack! (via MindKits on Twitter)

February 17 2011

ePayments Week: Does Apple deserve a bigger bite?

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

Apple wants a bigger bite of the publishing pie

Apple announced a subscription plan for publishers through its iTunes store, a plan that seemed to annoy and confuse publishers while creating a nice opportunity for Google to ride in the next day with a competing plan that publishers seemed to like better.

Apple's plan goes something like this: If a publisher sells a subscription through the app and the iTunes store, Apple takes 30% and keeps control of the subscriber's data. Some of the coverage of the plan missed the point that if the publisher brings an existing subscriber over to the App, they keep the revenue and Apple doesn't get a cut — at least not until that subscriber renews through the app. Publishers were at least as miffed about Apple's control over the user data. Apple sees these as iTunes subscribers, whose information they will jealously guard. Publishers see them as subscribers whom they need to send endless renewal reminders and whose names they need to sell to other publishers, Omaha Steaks, and the Franklin Mint.

Subscription screen from The Daily
The in-app subscription screen from The Daily

The 10% that Google will collect from publishers who opt to participate in its One Pass program looks mighty good by comparison. Google will sell subscriptions through a yet-to-appear newsstand, process them with Google Checkout, and hand over subscriber data to the publisher. "We don't prevent you from knowing, if you're a publisher, who your customers are, like some other people," The Wall Street Journal quoted CEO Eric Schmidt saying. Subscribers will get a login that lets them read the publication on their phone, tablet, or on the web.

Publishers seemed to welcome the clarity and generosity of Google's plan, but Matthew Ingram at GigaOm wondered if Google's One Pass was "pretty much just a warmed-over content paywall" since he doubted the open Android platform could deliver the high-quality user experience that iPad users have been frothing over. There may also be a case to the argument that Apple's iTunes subscribers are higher value leads: Silicon Alley Insider published this chart based on data from Mobclix suggesting that iPhone app users are worth more to developers (and, presumably, publishers) than Android app users. That's not much of a stretch. After all, we know they've probably paid more for their devices.


Can Isis unite the gods of mobile commerce?

ISISI've reported recently on individual efforts to enable tap-and-pay capabilities for mobile phones — Paypal and Bump, for example. And I've written several times about Starbucks' mobile payment app, just because it gives me an excuse to go get coffee. But I've also noted that a different app for every checkout would be cumbersome. Mobile telcos think so, too, so they are teaming up around a standard called Isis.

Isis, which was announced last fall, aims to put payment capability inside phones by the spring of 2012. It could work something like this: if the carriers, credit card companies, and banks agree on how the system should work, including where the financial data is stored on the phone (probably the SIM card), how payment happens (NFC wireless communication), how secure it is, how transactions get processed, and who gets a cut, they could work to implement the standard on new phones and configure a backward-compatible bridge to existing devices. AT&T Mobility, Verizon Communications, and T-Mobile USA launched the effort, and they're tapping the payment expertise of Barclaycard US and Discover Financial Services.

While the combined muscle of these big names gives credence to the effort, it can also be difficult to get too many giants to dance to the same tune. Occasionally, industry-wide standards efforts flounder on the demands and compromises of too many players, and a rogue player undercuts the effort by presenting a viable alternative that becomes a de facto standard. Windows Explorer's dominance in the early- to mid-2000s and Apple's music format (AAC with digital rights management) used on iTunes from 2003-2007 are two examples.

Drew Sievers at MFoundry has a perspective on Isis based on experience with an earlier attempt at universal mobile payments called Firethorn. (Qualcomm paid big bucks for the service, but banks balked at letting the carriers control their customers' purchasing experience.)

In the past there may not have been enough of a platform on which to build consumer acceptance for any payment standard. Now, however, with smartphones exponentially altering what consumers think they can do with their devices, the Isis partners stand a better chance. Of course, as Sievers points out in his post, they'll have competition as the credit card firms and mobile operating system companies throw their weight behind various competing or collaborative efforts.

Bling Nation wants you to Like them

We can take it as a sign that Bling Nation is "all-in" on social when they set their domain to roll over to their Facebook page.

"We feel strongly that, with 650 million people using Facebook, that's the place where communication is occurring," Bling Nation's general manager Matt Murphy told me. "We wanted to put our whole experience there."

Bling Nation received a fair amount of attention last year with a contactless payment trial. Murphy said about 30,000 users have tried out the Bling sticker (which contains an NFC chip) on their phones, and they can use it to buy stuff at "thousands" of merchants in the Bay Area. Tapping Bling's point-of-purchase hardware charges the user's PayPal account.

Murphy said Bling is counting on the viral nature of Facebook and its users' relationships to show when they've Blinged a purchase or — and this appears to be the key incentive — earned a reward, like a discount on their next cup of coffee or caesar cut. "We're asking consumers to change their behavior," he said. "We've got to offer them something in return for that."

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.



Related:


February 11 2011

Four short links: 11 February 2012

  1. Phantom of the Flopera (YouTube) -- Bach's Tocata and Fugue in D Minor (BWV 565) as performed by floppy drives. Creative intimacy with one's tools is a sign of mastery. (via Andy Baio)
  2. Save Entire BBC Archive (Ben Goldacre) -- I pointed earlier to the questionable BBC closure of scores of websites in the name of cost-cutting. It's a torrent of an archive of spidered BBC websites. (via Andy Baio)
  3. Android Hidden NFC Capabilities Unlocked -- Gibraltar Software Factory, based in Argentina, went through the source code of Android 2.3 and found that Google has purposefully hidden several NFC related API calls, most likely due to the fact that they’re not quite stable enough for public release. Some minor tweaking of the source code, and boom, they’ve enabled write support for NFC tags. This means mobile phones will not just read RFID tags, but also act like RFID tags. (via Chris Heathcote on Delicious)
  4. Pinboard Creator Maciej Ceglowski (ReadWriteWeb) -- I think many developers (myself included) are easily seduced by new technology and are willing to burn a lot of time rigging it together just for the joy of tinkering. So nowadays we see a lot of fairly uninteresting web apps with very technically sweet implementations. In designing Pinboard, I tried to steer clear of this temptation by picking very familiar, vanilla tools wherever possible so I would have no excuse for architectural wank. The other reason I like the approach is that the tried-and-true stuff is extensively debugged and documented. The chances of you finding a bug in MySQL or PHP as the author of a mid-sized website are microscopic. That's not the case for newer infrastructure like NoSQL or the various web frameworks.

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