IMF Mandatory Ethics Training

So it seems that DSK (or Strauss-Kahn for those not in the know), is increasingly using a smear campaign against the woman who accused him of sexually assaulting her. Although it does seem that he might be innocent, I can't help but notice that to avoid all of this mess altogether, it might have been smarter for the IMF to have fired him after he...oh I don't know... had an affair with another IMF staff member.

Whatever the case may be, Christine Lagarde, the French Finance Minister, has recently been appointed as the new head of the IMF. In an interesting story in the Washington Post today, "First Up for Lagarde: Ethics Training", they noted that the contract that Christine Lagarde signed actually has a new ethics clause, stating that "You shall strive to avoid even the appearance of impropriety in your conduct" and "As Managing Director, you are expected to observe the highest standards of ethical conduct, consistent with the values of integrity, impartiality and discretion".

I recently saw Christine Lagarde speak in Chicago, and I have to say that this woman is incredibly impressive! Her presence speaks volumes, she is simultaneously humble, self-deprecating, strong and slightly intimidating. Her resume is incredibly impressive- she's held three chairs in the French cabinet, run a major global law firm, earned several advanced educational degree and is a member of the French Legion of Honor. She's quite an inspiration for young women in the workforce everywhere, and it is a bit of a shame I think that she needs to go through the additional training, etc. due to her predecessors misjudgment. I suppose that's the way it always is though, it very rarely is the person who needs it that actually gets the training...

Indeed, there seems to be changes afoot in the high profile organizations of government, but I can't help but wonder if this highly publicized move will ever actually erase the improper behavior by politicians acting like frat boys (and whether it should). Until then, it looks like the first thing Lagarde will be doing in her new role is attending ethics training classes which include in-person and online courses, questionnaires and a one-on-one session with IMF ethics chief, Virginia Canter. Small steps, but steps forward nonetheless!

The "Other" Guys

So Intuit recently announced their new "GoPayment" service at the Google I/O developer conference. Using this service, it seems like they're directly challenging the Square model of cell phone add-ons to process credit cards. The way GoPayment works is that, by using radio waves, to transfer credit stored credit card information between devices. The advantage that GoPayment has over Square-type devices is that, whereas Square needs a physical add on, GoPayment does not. Moreover, it seems (unverified- just my personal perspective) that Square requires a Square-specific profile, kind of like a PayPal account where you can upload payment/payment receiving information for fail safes in case your card/account is declined, whereas GoPayment seems to bypass that and use the card information itself.

I wonder how this new development will impact/ how this new development pressured Square to release their new "Card Case" app which allows users to search for merchants that would accept the Square method of user-based "Card Case" and merchant-based "Register" functionality to pay for purchases by using only a name. Apparently, this would allow a customer to go into a store, open an app (which conveniently looks like a brown leather wallet, clicks to open a tab at that store and then gives the merchant their name. Once the name is given, the merchant can see a photo of the Square user to verify and can confirm/initiate payment using the customer's information that is already stored in the Square database.Although there are already concerns about the security factor of this, Square is on a marketing blitz to convince people that this bypasses the whole "mobile" thing altogether.

[Tangent: It is important to note that in parallel with Square's continuing developments, they did just receive a substantial investment from Visa ("in the single millions of dollars"). Although it's still not completely clear as to Visa's reasons for investing in Square, there have been two perspectives that are floating around- 1.) access to Visa's network could help facilitate the number of enhancements that would make Square more robust or 2.) Visa is investing in Square because it provides a way for Visa to "buy its way" into hedging its bets in the NFC war. Although Visa already has a swipe and go payment (PayPass), it would open up a whole new environment for swipe and pay on a smaller scale for smaller businesses that would like to offer an acceptance solution]

[New Addition: on 7/1, Square COO Keith Rabois explained to Fast Company what he would do with all the cash he's getting- it seems that they're really targeting small, local businesses. He added that they would be adding new features in July and August, but declined to define what they would be, simply stating that they would "extend and improve" some elements of the Register and Card Case features.]

[Additional Tangent: There was also an interesting article published in Fast Company about the Square face-off that also recaps the recent happenings, but it concluded in a very interesting way. It reminded us all that Apple actually has the largest treasure trove of credit card information on the web right now, with over 200 million credit cards.]

I beg to differ though, in actuality, this method seems to make the customers more dependent on mobile devices. Although it does help potentially decrease the cost of investment in the POS terminal for merchants (especially small businesses), it requires that both the merchant and the customer have access to a mobile device and the Square database. Current NFC/Proposed NFC pilots leverage a technology that can be embedded into phones (near field communication) but are also already embedded into smart chips and key passes. In this face off I think I'm going to stay on the side of NFC because it seems to not only be more flexible, but also more open to different forms of use.

Mobile Payments Roundup!

So lots has been happening in the news of mobile payments...MasterCard and The Independent (UK) both reporting on the demographic preferences for mobile payments. MasterCard, for example, claims that "Survey finds consumers, particularly trend-setting 18-34 year olds, have sights set on mobile phone payments". I don't even know what that means to be honest.... what does a "trend-setting" 34 year old look like? Sometimes I worry about FierceMobileContent...

Anyway though. These types of studies are becoming almost monotonous- "Young Consumers Keen [love the British] to Make the Switch to Contactless Mobile Payments" says The Independent, following up on the study from MasterCard (yup, they're beginning to share reports and almost claim them as their own. Can I do that? Can I go into work and say things like "The work that you did is correct due to the work that I would like to do!" Insight. Innovation. Impact. PYMNTS has even more interesting about the APAC regions, citing that mobile finance users could be up to 2.3B by 2015 in the APAC alone.

A lot has been happening, so let's just bullet it out....

• American Express Levi's Partner to Offer On-Demand Mobile Coupons: This is a great idea and a great move by American Express to move to the next step of mobile couponing. By making them on-demand, you not only increase customer satisfaction, but you get the bonus of additional tracking metrics (since it's an incoming action, not an outgoing one) and you can more closely monitor usage (decrease breakage). A win all around-they're calling these things "Smart Offer APIs", where offers are delivered when a card member uses a card at the merchant location to make a purchase. Best of all, the actual "savings" happen on the back-end, and the "savings" are deducted directly from the customers statement
• MocaPay Launched a Branded Payment Card Integration in Mobile Wallet: This is a big step forward for MocaPay because it allows for MocaPay users to pay using MocaPay at the POS for the first time. This is a more compelling argument than what we currently have because MocaPay is much more of a mobile wallet than many of the current payment options, allowing users to tie their payments and activity to loyalty profiles. This could be an interim step on the way to getting to a "full" mobile wallet, where consumers can connect "additional services" on the back end to an existing payment account
• Deals With Major Players Vital to Boost Mobile Payments: Interestingly enough, one of the biggest untapped markets out there us in the middle east. It says currently, one of the fastest growing sectors is mobile ticketing. Juniper Research says that they expect half a billion people to use the service by 2015, and currently these types of services are on display at the Abu Dhabi National Exhibition Centre, where they're hosting the 11th edition of Cards Middle East 2011. I'll be interested to see if anything special comes out of it...
• Former Senior Execs from eBay, Oracle and Visa unveil FreeMonee, the world's first national gift network. This national cash-gift network enables merchants to give "gifts" directly to individual credit and debit cardholders by working through their existing, participating financial institutions. They would basically be cash incentives that function like a gift card on an individual's credit or debit card. This new method seems to follow the trend of leaning toward data-mining, because the way it works is by using their new proprietary Adaptive Matching Technology (patent-pending, proprietary technology) that analyzes transaction data of hundreds of millions of card holders to match consumers with applicable "gifts" to stores that they would be likely to shop at. Pymnts.com cliams that "The AMT system is optimized to maximize consumer satisfaction, merchant ROI and network profitability." Supposedly, this system should launch in the summer of 2011
• In tangential news, the Payments Authority launched a social network called B2Bsynergy.org that directly targets payments professionals (Facebook for payment geeks like me)
• SCORE and American Express OPEN (their small merchant forum) are seeking to drive small business growth through an event series. Although I'm sure this is just part of their annual shenanigans to publicize their offerings, I've never really noticed it in the news wires before, and I think it's interesting to note only because I think it's indicative of the industry beginning to realize and really invest in the value of capturing the small business segment
• Recently, MasterCard acquired all of Santander's (Sovereign Bank) debit portfolio. I didn't even know that companies could do that....But it intrigues me because it 1.) reminds that MasterCard has been awfully quiet during all of this hullabaloo, which makes me wonder if its quietly up to something either internationally or internally and 2.) this merger seems indicative of the beginning trend of large issuers partnering with more regional banks to do promotional campaigns

Sociobiology, Kin Relationships, Altruism and Humans

 

I read a very interesting article in Discover recently about inclusive fitness and it got me thinking, but first, some background. In 1975, biologist E.O. Wilson published Sociobiology, a refinement of evolutionary theory that claimed that social behaviors were often genetically programmed into species to help them survive. He claimed that  altruism (although it is technically a self-destructive behavior performed for the benefit of others) actually ensured that your genes would be passed on through "inclusive fitness", which basically meant that because your altruism helped others (typically your family), then your whole family would benefit and have their genes pass on to the next generation. This theory went on to become quite popular, and by the 1990s was accepted as a core tenet of evolutionary psychology and biology.

Now, however, Wilson is  taking back his findings and claiming that altruism does not drive evolution, that in fact, altruism would emerge whether or not you were protecting your kin. He claims that when people compete against each other they are selfish, but when group selection becomes important, the altruism of human societies would automatically kicks in, claiming that humans may be the only species intelligent enough to strike a balance between group and individual level gains.

I think this theory (and the recent change) is interesting because it basically claims two things: altruism is an inherent characteristic in humans that emerges when we sense that group "fitness" is necessary, and secondly, that humans may be the only species that can not only distinguish when this need occurs, but also distinguish between when individual needs (with a selfish approach) or group needs (with an altruistic approach) is necessary. When I look at the workplace, I can tell you that this happens, but I don't know if it's called altruism any more. In the same vein that humans are smart enough to determine when there is a need to act for the good of the group, it seems that they also know when there's a benefit in acting for others in order to better themselves. For example, you typically compete with your colleagues in the average workplace, but if the colleague realizes that a project is due and you will all need to work well together to finish on time, they may give encouragement and praise to others on the team to make a better working environment. I'd argue that this is not necessarily altruistic (they still want to finish the project on time so that they don't get in trouble), but that's also not necessarily bad.

I think that in the case of the workplace, having this type of mentality (helping the group for the good of one) is probably more frequent than helping the group for the needs of the group, although I do think that they can be cooperative needs. And why not? It might actually be better (at least in the workplace) if altruism informed less of our decisions and we were slightly more selfish- then there is less of a chance that altruistic behavior would color other actions- that might actually be detrimental in the long run (altruism in hiring/firing/promoting if that person isn't ready, for example). So....I say, selfish or not- whatever you want to call it- just make sure you keep end goals in mind. At least in the workplace.

Old Dog, New Tricks

In an effort to maintain their edge in the market, the strongest players seem to have begun diversifying their offerings across multiple types of services.

• Google has announced it's Google+ social networking platform (supposedly the linchpin to bring all of their many other services to a more "social" atmosphere), Google Instant (a "faster" way to search, that's already spawned indirect backlash from people arguing that it's not the point of the internet to ONLY bring you what you were looking for, and that this method could potentially stifle creation and learning- see the NYTimes article on the EchoChamber). 
• They've also recently (very quietly) introduced Pool Party, which is a free photo sharing application that is optimized for both Androids and iPhones. Although it's only available trough an invitation only basis (seriously?! why do you do this to me Google?), Pool party lets users create group albums and see friend's albums in real time. Pool Party is the brainchild of Slide, a social media start-up that was recently acquired by Google for $182M
• As an additional note to the social networking spin, Facebook promised that they would "launch something awesome" the week of July 4th...uh...thanks Mark Z for still proving that you are a young person like me? Speculation claims that it will most likely be a mobile photo sharing application...like...Google's..and Instagram...and Path.....right.
• Apple has introduced it's cloud music offering, as has Google and Amazon (Amazon also couples this cloud music offering with cloud storage for an additional fee)
• Additionally, Apple is negotiating to have unlimited iTunes downloads across their iOS devices, signaling that maybe they're giving up just a little bit of the big-brother-ness to give their customers a better experience
• Google, trying to compete with the popularity of Apple and the new storage capabilities of Amazon, announced its "Music Beta by Google" recently. However, all reporting seems to indicate that Google unfortunately fell short on this one- the initial proposal of having a giant centralized jukebox (think Grooveshark) did not exist, and no storage is offered. The existing streaming capabilities they do offer also come with a long uploading process. All seem to agree though that many of the shortfalls of this new service can probably be traced back to the difficulties with trying to sign contracts with music labels (they think they're protecting their music content)
  
• Couponing still continues to be big business, especially as the digital wallets from Visa, Google and just about everyone else continue to make the news
• FourSquare and Groupon are currently in talks to team up on mobile deals, most likely to bring additional value to the already-existing Groupon-Now functionality (allows users to find deals that are time specific in their immediate area. This functionality allows merchants to target prime "down times" and encourage more customers while Groupon gets more opportunities to sell more groupons. Customers still get discounts and the added convenience of being able to do "on the spot" things- everyone wins!
• And even regular retailers are jumping on the bandwagon, and making significant investments to make sure that their products are seen by the affluent clan that typically use mobile services
• Zappos, for example, recently announced that they have a brand new mobile strategy that they are anxious to move forward with, which includes integrating social networking/mobile strategies to encourage a more personalized experience during mCommerce

All of these movements seem interesting because, as usual, most of the news is around several major players (Amazon, Google, Apple) but also because it seems like their push for a customer-centric strategy seems to be leaking to other companies as well (retail, Groupons, etc.). Combine this spreading of strategy with the channel-of-the-moment (mobile) and it seems to offer a very compelling argument.

Mobile Banking Still Exists!

Okay, okay, so the headline is more than obvious, but I wanted to make sure that I show the proper amount of love to the mobile banking side since they have been slightly neglected recently (hey it's hard to compete when you're not announcing new services and new partnerships every day!). Forrester recently came up with a concrete ROI of 15.7% for mobile banking, estimating that a hypothetical bank of 500K customers, based on the ability to reduce costs, retain customers and cross-sell. In a survey, 43% of users said they made fewer calls into the service center due to mobile banking, while 30% of mobile banking users said that mbanking has made them more likely to stay with their bank.

• Wells Fargo announced that they are going to expand their internal incubator, even though it only takes 67days to take new mobile banking apps from development into customer's hands
• A recent study reaffirmed that Asian countries lead the countries in mobile (specifically mobile banking). Particularly in South Korea, Singapore and Hong Kong, consumers seem to be very comfortable with using their phones to bank or shop online
• In other news (I love saying that, it makes me feel like a newscaster), it appears that mobile banking could also accelerate progress towards Millennium Development Goals.These goals, which mostly focusing on bringing equality and critical infrastructure to third world countries, claims that "the immense potential of branch-less banking as a mechanism that enables vulnerable people to participate in society and economy and that, from an international perspective, can constitute an effective measure to reduce costs linked to transfer of remittances"
• In the discussion of mobile banking, the related topic of security is never that far away, and a new article from Australia claims that cyber criminals are specifically targeting mobile banking mostly because many users/companies neglect to report security breaches (users don't know, companies want to protect their brand) and that this new channel is so ubiquitous that it becomes convenient for cyber criminals to target for all customer information

So it's a pretty mixed bag for mbanking unfortunately, but it does seem that things are progressing- only one of those steps being acknowledging the risks in the process!

The Rise and Fall of ISIS

When ISIS first emerged on the scene, everyone thought that it would be the next big thing (me included!). The promises that it made were intriguing to say the least- they proposed that by uniting players from all parts of the value chain in mobile payments, they would be able to launch the first E2E mobile payment solution by EOY 2011.  

• ISIS is trying to keep the momentum going by encouraging others to play nice with them and openly encouraging Apple, Google and Sprint to join the network but that didn't seem to work out so well since Sprint has announced that they're partnering to form their own mobile payment network
• But why? The reasons are hard to see, but AT&T claims that the new debit card regulations forced ISIS and its partners to overhaul their plans because the Durbin amendment makes payment processing far less profitable by limiting the fees that merchants need to pay when customers make purchases. The industry has whole-heartedly agreed, but I wonder if its just that they need a sacrificial lamb to ensure that the Durbin debate continues. The Dodd-Frank bill actually has many in a tizzy because it expects to slash debit processing fee revenue from $23 billion to $10 billion across the industry
• Another rumor that's floating around is that ISIS had so much overwhelming interest in terms of partnerships that they decided to open it up to everyone. This is entirely possible if the hype bubble they built for themselves in the consumer stream leaked into corporate boardrooms I suppose...
• Due to these or perhaps other issues, ISIS has indeed confirmed that it will no longer roll out its own NFC network, but instead will open its system to interested credit issuers and banks by aligning to an existing mpayment structure. The problem here is that essentially, the value of ISIS is gone. The one thing that made it compelling is that it potentially was going to offer its own infrastructure so that other companies would not need to invest in one-off systems that only they could use. If ISIS won't be providing and will basically serve only as a manager over all of these companies- there's very little incentive for banks and issuers to be part of the consortium
• Given the level of buzz that came after their announcement that they would alter their plans, ISIS has also issued statements stating that in actuality, their m-commerce plans are accelerating. However, in the same statement they said they would ultimately "go to market with fewer [companies]" and anticipates the company will ultimately partner with three or four banks and processing firms. Doesn't sound like overwhelming interest to me...Seems like just a case of bad PR management
• Let's add to this story the fact that Google and Visa have essentially launched their own mobile wallets that are "open" saying that anyone who would like can join- if you had to choose between an existing mega company or a brand new consortium that hasn't launched yet, which would you choose?
• By the way, the Visa wallet promises click to buy, cross-channel solutions (read: web and in person), preference management (customer personalization) and special merchant offers. Moreover, they also promise that they will be able to run it on an existing global system, which would allow them to tap new/emerging economies like India and Russia)
• Square is also trying to jump into this game by scrapping all the mobile business altogether- they claim that through their process of using Card Case  (merchants use "Register"- creative I know) customers can pay with just a name
• As if there wasn't enough competition, even Intuit is jumping into the game with their "GoPayment' process, which uses NFC to capture physical credit card information (See follow up post soon)
• That being said, ISIS still plans to team up with Salt Lake City to launch a pilot in early to mid-2012. They have also announced plans for Austin, Texas as their second pilot city

News Round Up

So mobile has been doing a lot of interesting things recently. Per my initial forecast a few months ago, there is this trend of consolidation happening (among banks mostly) to provide mobile payments. So let's do a mini news roundup: (will post an ISIS-specific round up shortly, since crazy things are happening there)

1. Bank of America, Wells Fargo and JP Morgan chase created a new service called ClearXchange that would allow online and mobile customers to send money via text and email messages. It seems that ClearXchange is their way of edging in on the PayPal P2P payments section. Noticeably missing from this conglomeration are issuers (like Visa, MasterCard), traditional alternative payment providers (PayPal) and potentially new payment providers (Google, Apple).... wonder why?(see bullet #2)
2. Google recently introduced the Google Wallet! This new service, introduced at Google's New York office, is a free Google app that lets users download and tap to pay from participating merchants.They expect 50M users over the next few years and is expected to do additional trials in San Francisco, with planned expansion in "additional cities and smartphone [platforms] in the future". Additional vendors will include Coca-Cola vending machines (does that count as a merchant?), CVS, Jack in the Box, Sports Authority and Sunoco
3. Google also has a bunch of other tricks up its sleeve. It introduced location targeted news near you, which they creatively  named "News Near You". The service analyzes every word in every story to understand what geographic area the article addresses and where the source is located. It then will provide a section at the bottom of the homepage with customized news suggestions for you- bringing data analytics to a whole new level! Personalized news sources?
4. "Across the pond", Orange and BarclayCard introduced a new NFC service this month spanning over 500K merchant locations. Orange's new Samsung Tocco Lite device will incorporate Barclaycard's new QuickTouch solution, and in addition to tap and pay functionality, users can also Orange subscribers can also transfer money to their phones to fund their mobile purchases

Fancy Barcodes

I read this article in WSJ called "Art in Aisle 5: Barcodes Enter an Expressionist Period". It basically talked about how barcodes are evolving to become more than just a way to track products, but also become more of an art form. Especially as companies realize how widespread they are (it took them this long to realize this?) they are beginning to collaborate with artists and outside design companies (the few mentioned are based in Asia) to develop more aesthetically pleasing options.

Does anyone else feel like product designers are racing to find meaning in the meaningless because they're bored?