Author Archives: JVClair

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About JVClair

Retail Technology, Point of Sale and Payments expert with a focus on Cloud Technology, Mobility, Online Retailing and Mobile Payments. CTO at Surefire Systems (Melbourne).

The Battle For Smartphone Supremacy – Infographic

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V.'s avatarThe Main Street Analyst

How often do you use your smartphone to peruse a website? According to a recent survey, over the course of the past year visits to leading ecommerce websites from consumers’ mobile devices have skyrocketed. And the battle for smartphone supremacy is intensifying.

The infographic below illustrates the direction in which the mobile commerce is headed, and shows the race between iPhone and Android.

Digital marketing technology company Monetate issued the report from which this information is extracted. The report analyzed more than 100 million online shopping experiences to come up with the data below.

Have you shopped more frequently from your mobile device in the past year?

Source: Mashable.com, Monetate

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Why talk down NFC for the iPhone 5? It’s in the trough of disillusionment

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Mashable came out today with another report on “9 Most believable rumours about the iPhone 5“.  Eight of them were positive new features expected on the new iPhone to be announced by Apple on September 12th, one was negative – No NFC (Near Field Communications).  This quoted the Anandtech article from a couple of weeks ago that thought that the metal back of the new iPhone would stop NFC from being included as there was no room for the antenna.  This, despite the fact that Apple was in a great position to become a major player in Mobile Payments using NFC.

But, as seen in my recent post here, Apple has a patent that allows the NFC antenna to be imbedded in the front Touchscreen – a more natural place for the NFC antenna anyway from a user perspective.  If anyone bothers to read the comments (August 31st) on that article they would also notice that this patent has also been commented on as the reason why Apple will release NFC and it will be front facing.

Why is everyone still sticking to this (false) line, that the new iPhone will not ship with NFC? Well, I think I have the answer. In August Gartner released it’s annual Hype Cycle Report for Emerging Technologies (see picture above).  The previous years Hype Cycle report had placed NFC at the peak of Inflated Expectations, but now NFC and NFC Payments had slipped down from that tipping point to the Trough of Disillusionment, with 2-5 years before it becomes generally excepted technology on the Slope of Enlightenment.

People are over the hype. NFC has been talked about for a number of years now, it had been expected in the last 2 Apple iPhones and has now been released in a number of Android phones, including the new Galaxy range from Samsung and the Blackberry from RIM.  The Google Wallet has been developed for Android phones with NFC capabilities (now in Release 2).  Visa and MasterCard and a number of large retailers have rolled out contactless payment terminals at Point of Sale.  Everything is lining up for a major change in payments technology that will come with Mobile Payments and NFC.

NFC is the Tipping Point for Mobile Payments says Gartner, who envision a Cashless World, with every transaction an electronic one  “This will provide enterprises with efficiency and traceability, and consumers with convenience and security. The technologies on the 2012 Hype Cycle that will enable parts of this scenario include NFC payment, mobile over-the-air (OTA) payment and biometric authentication methods. Related technologies will also impact the payment landscape, albeit more indirectly. These include the Internet of Things, mobile application stores and automatic content recognition. The tipping point will be surpassed when NFC payment and mobile OTA payment technologies mature.”

Nothing will give Mobile Payments a greater push up the slope, than Apple coming out with NFC included in the iPhone 5 and linked to the iOS6 Passbook application with coupons, tickets and loyalty schemes.  It’s coming, watch this space.

Will mobile payments be the death of plastic cards?

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A couple of weeks ago I posted an article by Brett King (author of Banking 2.0) on the LinkedIn Mobile Payment Strategy group. The article generated a lot of interesting comment from industry players around the world that I thought would be worth sharing on this blog. The link to the article and the LinkedIn group is here.

The article’s premise was that rather than being a threat to Cash payments, Mobile Payments are more likely to result in the Death of Plastic Cards.  The recent Starbucks / Square deal demonstrated that payments can be made simpler with the use of mobile, without the fraud issues currently plaguing mag-stripe cards in particular.  Brett stated that customers will flock to adopt the new payment technology to “a much simpler, better informed payments interaction, plastic just looks dumb, insecure and outmoded.”

I agree with Brett in that disruption in payments is not going to come from the incumbents (Amex, Visa and MasterCard), but from new players like Square, PayPal and Apple – its already started and will lead to fundamental changes in the Payment Card industry, eventually leading to the “Death of Plastic”.

Generally the comments on the article agreed that Mobile Payments will be disruptive leading to significant changes for both Cards and Cash usage for payments.  Some key points that were also brought out included:

  • Apple launching the new iPhone 5 with NFC will drive a lot of the adoption of NFC based mobile payments (see my earlier post on this topic here).
  • Merchants will be the primary benefactors of the death of plastic with lower processing costs / merchant fees as new players come into the market with better value propositions (as per the Square / Starbucks deal).
  • More convenience for the consumer including the  bundling of coupons, offers, loyalty cards, receipts, etc automatically into the payment transaction and generating all the appropriate discounts.

 

 

Despite speculation Apple’s iPhone 5 will come with NFC Digital Wallet

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Recently the speculation about the inclusion of Near Field Communications (NFC) in Apple’s iPhone 5 switched from “Yes it is definitely In” to “No it’s definitely Out“.  I believe there is a strong case to support Apple including NFC in the iPhone 5 based on Apple doing things a little differently.

The original speculation was driven by a photograph of a partly assembled iPhone 5 front panel with what looked very much like an NFC chip installed (see picture).  

Later, further analysis of the photographs and the iPhone 5 construction came out with the view that NFC could not be included because the metal back of the new iPhone wouldn’t allow enough room for the NFC antenna and because of power consumption concerns in conjunction with the new LTE 4G comms technology that will be in the phone.  See article here.

However, this is Apple so “Think Different“.  Apple was granted a patent in April 2011, which covers the addition of an NFC antenna to the front touch screen sensor panel, eliminating the need for a separate space consuming RFID antenna.

With the inclusion of Passbook in iOS 6, Apple has implemented the infrastructure for an iWallet (as well as loyalty, coupons, tickets).  Along with this, some 250 Million iTunes accounts all with Credit Card payment information, give Apple the ability to be a game changer yet again, this time in Payments.   All that is missing is NFC, to actually transmit the payment information at Point of Sale – it has to be there.

With the recent acquisition of AuthenTec finger print security technology, Apple also has the ability to add additional bio-metric finger print scanning security to iPhone payments. This will address a lot of the security concerns with mobile payments and further smooth the way for the introduction of mobile payments and a great customer experience.

Meanwhile, Visa, MasterCard and major retailers have been quietly rolling out Contactless payment terminals at Point of Sale globally (over 150,000 in Australia alone) putting the retail infrastructure in place for NFC payments to take off.  Watch this space.

All this, even without the recent moves that the competition (Google Wallet, ISIS, Square, PayPal) are making in mobile payments, means that Apple must move now or risk loosing the advantage in what will be a huge market.  Hence, NFC must be there in the iPhone 5.

Who are (some of) the players in mobile payments?

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Good breakdown of some of the major players (USA) in Mobile Payments.

Henrik's avatarSmartphone Mobile Payments

Having spent some time researching different players in the mobile payments space, I have come up with a list focused primarily on Europe and the U.S.

The list is sorted alphabetically by the brand name (followed by an organization, if applicable) and may include companies, exchanges, associations and resellers. Its purpose, and that of the accompanying Venn diagram, is to have a visual representation of the mobile payment players and their direct/indirect competitors.

How did they get where they are? Did they grow organically or by acquisition or merger? I have included as much information as I have about each organization.

Note: this list was last updated on Sept. 1, 2012

1. Aisle Buyer (acquired by Intuit 04/2012)
2. Boku (via an acquisition of Paymo and Mobillcash)
3. Cimbal
4. Dwolla
5. FaceCash
6. Google Wallet (includes acquisitions of Zetawire, TxVia)
7. GoPago
8. GoPayment (Intuit)
9. InnerFence
10. ISIS…

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Retailers need to get an App, online isn’t enough

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A recent survey conducted in the USA by Harris Interactive for Apigee, an online API management platform, has indicated that shoppers will be using their mobile phones more than ever.  Many smartphone users have come to expect more than just an online presence from retailers, especially the younger demographic – where a smartphone app is becoming more important, as it allows them to do more when they are out shopping.  Venture Beat Article is here.

Mobile App Survey results

Mobile app usage in retail

Contactless payment here to stay

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Coles Supermarkets today announced that they had finally completed the rollout of Contactless Payments across 750 Supermarkets adding another 14,000 terminals to the MasterCard PayPass network that now numbers over 100,000 terminals across Australia. They join 7-Eleven, McDonalds, Bunnings, Dymocks, Australia Post, IGA Supermarkets, Chemists and numerous other retailers gearing up with contactless (tap and go) capability that can shave over 25% of the time off the payment process. Cabcharge has also rolled out over 20,000 contactless terminals in taxis and recently hit the 2 Million contactless payment transaction mark.

7-Eleven, one of the early adopters noted that the payment process can be cut from 35 seconds for a mag stripe / pin entry to 4-6 seconds with contactless, a significant time saver. There have been some consumer security concerns raised (as no PIN is required), but as the transactions are limited to low value (currently under $35) and both Visa and MasterCard have clearly stated that card holders will not be responsible for fraudulent use of their cards – this should not be an issue in the longer run.

A recent Deloitte study stated that 80% of of the total Australian cash transactions are currently under $35 amounting to some $470 Million a day moving through the Australian economy – significant numbers and significant time savings if these switch to contactless.

Consumers will get to love the convenience and speed of payment afforded by contactless and as the number of contactless cards issued by banks increase, the usage and take up will be much wider reducing the use of cash significantly. Currently it is estimated that usage of contactless cards has risen from 7% of the total population last year to over 14% this year with card ownership up to 35%.

Having this extensive contacless infrastructure in place in place puts Australia in a great position with the release of the new iPhone 5 scheduled for late September that is almost certainly going to come out with a Near Field Communication (NFC) chip that will also be able to be used with contactless terminals for tap and go payment. Westpac has just started a pilot program for NFC equipped Android phones with the Google Wallet – which will allow customers to tap their phone instead of their card.

Grocers’ digital dreams: Sainsbury’s launching VOD, Tesco ending MP3

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Interesting how leading UK Supermarkets Tesco and Sainsbury’s are leveraging their online traffic to get into Video On Demand and go head to head with Netflix and the like.

Robert Andrews's avatarGigaom

The UK’s number-three supermarket is preparing to turn itself in to an online movie and TV rental service, as it vies with with leader Tesco on digital devices, just as they have in the aisles.

Sainsbury’s is contracting video tech firm Rovi to power video on demand and for download in a service due to launch later this year under its new Sainsbury’s Entertainment brand.

Rovi promised paidContent “a transactional-based model that supports the sale and rental of premium titles versus a subscription-based service”. The service will launch initially on web and Sainsbury’s says it wants to take it later to internet TVs, Blu-ray disc players, smartphones and game consoles.

Sainsbury’s movie and TV offering will go head-to-head with Blinkbox, which Tesco acquired a majority of last year. Expect to see each supermarket competing with Netflix, Amazon’s Lovefilm, BSkyB and other dedicated VOD brands on internet TVs next year.

Like Blinkbox, Sainsbury’s…

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