Mobile Is a Mixed Bag

Seems like people are kind of pumping the brakes recently in terms of mobile. Looks like the industry is asking lots of questions, beyond the "What do I need? How do I get there?" they're also doing a lot of introspection and market analysis. Let's blame it on the rainy spring weather- it probably inspires contemplation.

Retailers know what's going on! In a recent New York Times article, they profiled how multiple retailers have attempted to move into the mobile shopping space and are being met with mixed success. Apparently only 12% of the top 500 United States retailers had sites compatible with mobile browsers, while only 7% had apps. Most of the people trying to move into this space seem to look to Amazon as the holy grail for mobile functionality (see my blog post on why Amazon is scary, awesome, and scary awesome).

Google Data, for example, has been used through its "Google Trends" feature, which shows the surges in keyword searches to determine trends in the population. According to the trends, it seems like "people are closing businesses, buying fewer boats and RVs, buying things in bulk, taking the bus, and shopping at dolar stores". Additional interesting points include:

• Around Thanksgiving 2008, searches for "unemployment" doubled, then flattened out for 24 months- but don't think of this as an improvement- unemployment checks in the US stop after 99 weeks
• Coupon usage in day to day spending increased by as much as 200%, coupon usage grew by as much as 27%. This movement is probably caused by the same reasons that a record number of Americans are currently on food stamps (~45 million- that means nearly 1 in 7 people, or 14% rely on food stamps. This is equivalent to an approximate increase of 16% in recipients in 2010)
• Funnily enough, it's true that porn is the one recession-proof investment! Searches for  the word
  "porn" increased (significantly) starting in 2008 and is now at one of it's highest points ever
• Unsurprisingly searches for "mobile banking" have increased, but interestingly enough, the search for "mobile banking" closely mirrors the surge in searches for "iPhone" and closely approximates actual adoption rates among consumers

We also seem some partnerships (friends are never more valuable than when you're in trouble!) in these turbulent times. Facebook, Apple, Microsoft, Google, Netflix, Visa, Yahoo and others involved in TechNet (A sweet, super-hero like group of major executives at leading technology companies) (okay, maybe not super-hero like, but I like to think that they have some sort of consolidated alerting system in their offices, so Zuckerberg can jump out of his seat and yell things like "Quick! To the Vespa! Steve Jobs NEEDS ME!") have recently sent a letter of support to lawmakers expressing their support for Senator John Tester's bill that would delay the implementation of the proposed debit interchange caps. Although this is probably driven by their mutual concern over not makin' no mo' money (Ahem Google NFC pilots, Apple NFC pilots, Facebook credits in real life, Microsoft struggling to stay in the game, Visa trying to take over the mobile payments world) I like to think that it's also a pretty aggressive move by them to look out for each other's interests as well.

Some players are really looking out for themselves though. American Express, for example, is making some big moves in terms of their mobile payment strategy. They recently announced that they are leading the investment for Payfone Inc. This would allow a new targeted demographic (younger consumers for American Express) to have more robust prepaid card or credit cards from "virtually any financial institution". This is quite a break though from American Express' typical approach of supporting a proprietary payment network. Combined with their announcement of Serve, this could give American Express some additional international reach since international merchants don't accept American Express as quickly as they do Mastercard or Visa. What we know so far though is that Serve and Payfone will "provide consumers with the ability to make purchases from online merchants using their mobile phone number at checkout" using a "pre or post-paid mobile operator account". Rodger Desai, the CEO of Payfone said, "This relationship will be a defining force in the industry. By teaming up with American Express' new digital payments platform, Serve, we are not only delivering greater choice to consumers and merchants, with one of the most comprehensive and advanced e-wallets in the industry, we are also enabling mobile operators to participate in the transaction flow and benefit from an entirely new revenue source." It will be interesting to see not only how this American Express/Payfone thing pans out, but also to see how it will affect the way other disruptors (Google, Apple) will be cutting in on Mastercard/Visa's game. By the way, it's already been pretty clear how Google and Apple are making a major play in NFC, but so are traditional players (see previous post). However, because of their financial backing, it's going to be hard for Visa and Mastercard to compete with the likes of Google and Apple if they decide to move into payments (they could offer significantly lower swipe fees). I think this article at GoBankingRates.com lays out the situation pretty well.

To round up my mini-news round up, I wonder when we'll be hearing more about the laws and regulations will begin to catch up to the payments technologies that we have going on. In a recent interview with Suzanne Martindale of the Consumers Union, Pymnts reached a question we've all known for awihle- the US may have great ideas and technology, but how do we control all of this?!