Where Mobile Payments Meets Life

Me and a couple of my really cool friends are into mobile payments (I'm not alone!). So, when we have life crises that we need to talk about we often revert to where we are most comfortable. It's the best way for us to express our emotions. Well, not actually, but we tried to imagine what it would be like if that really was how do conducted ourselves in life... and I thought ensued was pretty funny. They even suggested that I should make a new blog that would be "Ms Cleo meets mobile payments"...Some excerpts:

J:  no no

tomorrow is fine

also I need to ask your opinion on some stuff

not mobile payments related

me:  oh ok

are you sure?

becuse i do have an opinion on that

im sure.

 J:  ha

it would be funny if you turned it into mobile payments

"So I'm really having a hard time with my life. I don't know what to do."

"Well J...merchants didn't know what to do when they couldn't afford a credit card processor."

"Then square came along."

 Sent at 12:10 AM on Thursday

 me:  lol

i am totally going to do that

 J:  "Ninny. I don't know what to do. I'm totally in love with this girl, but she is married and has a kid."

"You know what that sounds like?"

"Paypal"

"Ebay was in love with PayPal although PayPal was already tied to other systems, but Ebay did what it thought was right and married PayPal."

 Sent at 12:14 AM on Thursday

 me:  lol

omg

ISIS

"sometimes shit just doesnt work out in the beginning, but then, you know, you keep the right partners around you and before you know it, well-- it still maybe wont work out, but you'll feel better"

 Sent at 12:16 AM on Thursday

 J:  haha

I'm going to email this convo to [our other friends]

 

 And finally our response from our friends was:

 

"I'm trying to make a better life for me and my kid but the past keeps coming back to haunt me. How do I move on?"

"You know P, when I have those dark moments and I need direction, I always think - what would Google Wallet do? Would they partner with a couple banks to try out their product in the mass-market, or would they make it an Android-exclusive service that's more focused on helping you manage your loyalty cards than replacing the plastic in your wallet? If you think about it like that, life makes a lot sense."

"Um...ok."

 

I don't know if this is there way of telling me I'm heartless, or if they're just excited that I'm nerdy like them. Regardless, I am constantly reminded about how lucky I am to have people like this in my life.

Top 3 Reasons Why I Think Our Society Has Reached Its Peak

 

1. We have been actively searching for the "God particle" and we also have the appropriate expectations that we are probably overhyping this whole thing
2. We actively tried to deport Justin Bieber from the US back to Canada
3. And this app is a real thing. Want to wake up to the smell and sounds of bacon without actually getting up and making bacon or having any bacon? (Also known as, want to wake up hungry forever?) No one does! But here is an app for it

Mobile Payments Newest 5 Decisions

So maybe the mobile payments game isn't all over yet. A lot of news recently seems to indicate that a lot of the major card issuers are getting back into the game of mobile payments. That doesn't mean that the road ahead is clear though-- now they're wondering the nitty-gritty of the problems.

1. Visa wants to enable mobile payments and move them to the cloud. They're building on their existing PayWave technology, and are also extending the Visa Ready Program in order to support merchants to enable payment options in the cloud. The cloud offers a new turn in the mobile payments game-- for years people have worried about the balance of the security in the cloud vs. the flexibility and scalability of hosting things in the cloud. It seems like that tide is finally turning in favor of the flexibility and scalability of hosting in the cloud, and Visa is making strong strides in that direction. 
2. Partnerships have also begun to dominate. Visa and MasterCard are realizing that having a partner can help with the scaling needs to get them to the tipping point of adoption. Moreover, they're throwing their weight solely behind Android 4.4 and are firmly in support of their tap and pay technology
3. Partnerships do not have to be "like with like" either. Visa and MasterCard, two of the largest issuers in America have teamed up, sure, but we're also seeing more partnerships across specialties. Samsung, a hardware provider, has recently found a worthy partner in PayPal, whose origin comes from software. Partnerships like these allow both parties to leverage the strengths of the other to produce a stronger overall solution. Although rumors claim that these two are also in talks with Apple, nothing can be confirmed
4. Instant usability is a requirement. Loop Payments recently unveiled a key fob that leverages existing POS terminals to allow consumers to use mobile payments with a consolidated "wallet" of payment methods. The fob only works when connected to a user's iPhone, thereby inherently providing another layer of interconnectivity and potentially security into the process
5. The battle between Bluetooth Low Energy (BLE) and NFC (Near Field Communications) continues. Although they both have their pros and cons, choosing the wrong one could pen a potential player from adoption. This risk undoubtedly has a lot of potential players sitting on the sidelines to see what ultimately shakes out and what the industry decides to go with. In short, nothing much has changed in the last two years

Fancy SV-ers Ruining It for the Rest of Us

You know what I'm sick of? Those hot-shot folks in Silicon Valley-- riding their candy whips, sippin' on the 'Cardi and upgrading to their iPhone 5S-es (I always have to check when I type that--- I'm constantly terrified that I typed "iPhone 5 asses") like gangstas do.

How dare they try to save the news industry by investing their ungodly amounts of money in dying news channels? (Though I guess some of it is well-deserved since they're...you know...making things that no one has ever tried before.) Trying to innovate by putting desktop-power chips in phones and forcing progress across the board?

But the real fear should probably focus on the Seattle area. Bezos is on a tear right now. He's on the news investing thing, he's making a ton of revenue (though no profit yet).

I just remember that the young professionals in Silicon Valley were the dreamers-- the independent, free-thinking spirits who dreamt big and did big things. As Silicon Valley grows, it seems like there's a distinct change in the atmosphere-- people are more obsessed with the "see and be seen", the dreaming has been tied up in red tape, and it's become increasingly clear that nothing is for free any more (real estate in San Francisco? Fughedaboutit. Three words: Google Bus Pinatas.)

Going back to Silicon Valley in a few months will be a huge change for me, and I wonder how I will adapt. Here's the list I have so far:

1. Denial-- just refuse to believe I'm spending $2K+ per month for 600 square feet
2. Bargaining-- see if maybe my office will let me sleep under my desk
3. Anger-- I feel like this is where most of my time will be spent

Why AmEx Has Gotten It Right

I'm not going to lie. I've always been a fan of American Express. It's a great company, a good place to work, they do exciting things, I respect their CEO. They actually do care about their customers as much as they say they do. The cafeteria isn't too terrible. It's a convenient commute from where I like to stay to the 3WFC... the list goes on and on (and, apparently, some of these things are more important than others, but it's funny that this is my list of reasons why I love Amex).

Today, BusinessWeek reported that Amex doesn't really care about mobile payments from a mobile phone. They're gonna give mobile payments through a little piece of plastic that holds all your pertinent information that is so small and light that it can fit into essentially any pocket.

Yeah they're doing it through your credit card. Shocker. The cool part is that they're going to offer you the ability to pay for cabs through membership rewards points that you can accrue through your credit card purchases. Tap 'n' go has always been a very convenient feature with the Amex Blue Cards, so this is an excellent way to capitalize on existing infrastructure. Which brings me to the top points of Amex Being Awesome:

1. Not investing into crazy amounts of new infrastructure when the existing infrastructure will do just fine
2. Tapping into a network that makes sense for day-to-day life. I mean, it's nice that (the now failed) Isis is giving away free Jamba Juices, but I don't need a Jamba Juice. I do need a cab. Especially in New York, I'm going to be using a lot of cabs. 
3. This encourages their members to burn their points in smaller increments (making it seem like less of a hit from a points-monger perspective) but to potentially do it more frequently. This is awesome because it reduces their float allocated to rewards points and increases customer satisfaction ("Hey! Look at how useful my points are! They are a real thing! There isn't a loyalty/reality gap!")
4. And finally, bridging the gap between the new and the old. Mobile payments has struggled not in small part because tapping against your phone against stuff to pay for other stuff is weird. Particularly with older generations (not a small part of Amex's main demographic), this is a hard gap to get over-- it's almost like learning how to do something you're very used to in a completely new way. By offering credit cards (old things) with new services (new things), it helps a user acclimate to new uses for common things-- things they're already used to, which can prime them for more innovative usage later.
5. Doing things this way usually results in more adoption, faster. This generates positive PR which they can leverage for their next big thing.

Good job Amex. Proud of you.

Nokia's Next New Thing

So. It's finally happened. After back-to-back years of loss, Nokia has decided to let itself be acquired by Microsoft. According to the terms of the deal, Microsoft gets Nokia's phone business, Qualcomm and other key IP licenses. Microsoft licenses Nokia's patents for all Microsoft products as well as the ability to use Nokia HERE broadly in its products. Nokia retains NSN, HERE, its CTO office and its patent portfolio.

Reading Nokia's earnings reports is a sad, sad thing to do (more accessible presentation here). Losses each quarter, and being particularly hit hard in its mobile devices due to slimming margins means that there is little relief coming for this company. However, contrary to the market (Microsoft stock fell this morning upon opening while Nokia's soared), I've been big on Nokia. For nothing else, because it's clear that its patent portfolio could be its golden goose to get itself out of this mess. Nokia probably will not last for much longer as the Nokia that we know it as today, but between its geo-centric capabilities (HERE) and its highly innovative technologies focusing on its camera (Lumia 1020 supposedly has the best phone camera in the world), Nokia should get acquired by a bigger entity, and Microsoft is the perfect candidate.

From Microsoft's perspective, they've instantly bought their way into the location-based game, and now could potentially rival Google in the future with mapping and geo-centric data on its users. Additionally, with all of the hype coming around regarding the photographic qualities that a smart phone gives its users (augmented reality, personal digital assistants, entertainment, bar code scanning, geo-centric streaming data, object recognition for mobile shopping, mobile payments), don't be surprised if Microsoft parlays the excellent camera as something more utilitarian....perhaps even as a rival to Google Glass. Officially, in Microsoft's official M&A announcement/call/related presentation, they seem pretty tight lipped on their plans, however, the growth and popularity of their new windows phone bodes well for their new relationship. Microsoft did explicitly call out that they're looking at "a family of devices with integrated services" with a specific call-out to geospatial. Particularly if Microsoft can parlay it into their existing portfolio of Xbox (entertainment) and Skype (communication), this "geospatial" play could really work out well for both them and Nokia.

And Then There Was Firefox...

This is kind of a rough week for mobile hardware. Things have been all over the place! First, we find out that the Windows phone is outpacing the BlackBerry devices, then we find out that BlackBerry has formed some sort of special committee to consider what strategic alternatives it has, including a possible sale. 

On a tangent, the death of BlackBerry makes me kind of sad, only because my first smartphone that I ever owned was a BlackBerry Bold and its saddening to hear that BlackBerry is now working on it’s BlackBerry 10 operating system (BB10) and not even scraping by. I mean, a 4.4% market share is not enough market share to stay alive! I remember when everyone had BlackBerrys, and there was something awesome about it. I miss the actual keys (because I suffer from fat finger syndrome) because it allowed me to type out emails without opening my eyes from bed (yes, at one point that was my life). However, the BlackBerry situation really strikes me because it’s not really going to be the beginning of something new-- it’s not like they’re sitting in the conference room discussing what type of new product of new venture they’re going to go into to revitalize their business. Even if they were going to create something new, they would need to partner with someone or merge with someone to make that happen. No, what I imagine is happening in that conference room is a serious discussion around identifying potential buyers, defining the potential fallout if they were simply to dissolve and/or declare bankruptcy and argument over which products are salvage-able and which ones aren’t. 

When I think about BlackBerry, I think some of it’s biggest potential partners would be organizations that might not be traditional mobile guys-- which might be a good thing. Much like the MySpace rising from the ashes, the BlackBerry resurrection could be powered by going in a completely different direction. If nothing else because the brand has become a pun in itself, moving into a completely different industry would give it more of a fresh start without any of the lagging negative connotations. But I digress. Poor BlackBerry.

Firefox also released its new phone recently. In a way that really kind of blows my mind-- it will be priced cheaper than pretty much any other smartphone out there ($79.99), will be sold through eBay (no worries for Firefox on negotiating carrier contracts and no time lost to market in taking time to negotiate those contracts) in order to maximize the availability of the phone globally, will offer an open OS (those pops you hear aren’t a figment of your imagination--developers just exploded all around the world) and will be carrier agnostic. What. The. Hell.

Okay, let’s do a run-down, not only do I love their genius, no-holds barred, super aggressive entrance (style points!) but the combination of accessibility and affordability is a serious threat to the existing players out there. 

• Cheap - Affordability on this thing is out of control. $79.99?! Are you kidding?! Not only are emerging markets going to die over this, but IF Firefox can promise the same type of quality experience that other hardware can offer then this may have the opportunity to become something that says, “Hey I’m cool and I also have a smartphone. But it’s also one-of-a-kind, non-establishment and super affordable-- so tell me who’s the smart one now?” Particularly in cultures where frugality is a positive  characteristic (I can say from experience that Chinese culture this is definitely true, although this is quick-changing with the rise of the new rich)

• Sold on eBay - Pure genius. Global platform allows them to have a single channel of demand so that they can have deeper insight into the devices they need. Additionally, they also save money by being able to consolidate their warehouses and streamline their shipping process. Inventory is kept smaller than if they supplied carriers/ASPs or retail shops, so it’s a smart operational move all the way around. Particularly since Firefox has always been a more “intangible” brand-- building its name as a browser first, the need for physical stores right now is unnecessary (future stores--maybe)

• Open OS - Why not let the developers do the work for you? Particularly with the open OS that they exhibited with developers early on through the development of their browser, this makes sense

• Carrier Agnostic- The power of numbers my friends. This will place a lot of pressure on their OS to be flexible as it will need to adopt to many different carriers and their sometimes-personalized needs, but carrier agnostic? Awesome.

So I’ll have to keep an eye on Firefox... They’re doing crazy things when no one is watching. 

This is the Face of Future Crime

He's so bored with you he can't even keep his eyes open.

No, I'm kidding. So there was a recent news story about how one man went and stole thousands of dollars due to mobile banking. I clicked on it, imagining the terrible things that were going to happen in the near future-- the apocalyptic near-- because someone had finally figured out a way to crack the system and bring reality to those fears we all had about criminals stealing all of our hard earned money using the very same technology that we all have learned to use and trust.

What I got was a little bit of a different story. Basically, this guy went and ordered Western Union money orders, deposited them using QuickDeposit, and then would go into grocery stores and cash them in person, essentially cashing them twice. This, I would like to point out, is a problem with the lagging refresh rate of back end systems, not really a problem with mobile. I repeat, this is not something that we can blame on mobile. Just want to point that out.

Crisis averted people. Go about your business. Nothing to see here.

Cash Money PayPal

So this is happening now--- PayPal has financed eBay shoppers before, but now they're moving into the lending business for ...small businesses. (I'm not that eloquent after long Friday nights, okay?).

This is interesting because, shortly after I started at Booth, I started taking copious amounts of econ and finance classes, and I surprisingly learned a lot. (Note that I didn't say that I learned enough by Booth standards, because, let's be real-- no one has ever learned "enough" by Booth standards, which is why we kill ourselves trying to take continuously more classes, do more school stuff and then feel overwhelmed by our overcommitment and feel forced to drink our feelings away.) One of the things that I learned is that in the past financial crisis, it logically followed that a lot of the nation's lending institutions stopped lending as much money as often because of all the newly introduced and very concerning risk that was introduced into the system. Although this sounds like a good thing ("Well if the economy isn't doing well then we should stop giving people money willy nilly because obviously that didn't work out too well for us.") it isn't as simple as that-- not only because the cause of the financial crisis has other roots, but because the potential solution out of this financial mess might be the exact opposite response.

When the economy goes south, it's natural that lending institutions would be less willing to lend because they're trying to keep more reserves in the bank for their safety (hedging against the possibility of a bank run or something like that) or because the government tells them to (which they did). However, even beyond what they're required, banks get nervous about lending money and when lending dries up, then a lot of the consumer spending that drives our economy (~70% of GDP) and infrastructure spending from private business/corporations (~10% of GDP) also stops. When that declines, our GDP declines, morale worsens, and then we potentially push ourselves into a tail spin.

So what does this have anything to do with PayPal? Well, it seems like PayPal saw the opportunity where it lay. They realized that small business was their life blood (statistically speaking, if they're anything like the previous clients that I've worked for, their small business segment makes up the majority of their revenues) and that they needed to encourage that to grow even if the market environment wouldn't. PayPal has gone through some rough spots recently. I'll be the first person to admit that-- they instituted massive layoffs this year and generally have been out of the limelight (more or less)  because of their outspoken opinion on the way that mobile payments will go (not NFC), and that's what everyone wants to talk about. They had a couple of exciting partnerships with companies like the Home Depot, but I was left wondering-- has PayPal taken a wrong turn? Their strategies and recent roll-outs seem disparate with what their core business is! But now I realize that they're just in the stage of trying to figure out what their NEW core business can be. I think they've realized that alternative payments is not going to be enough, so they're testing different things (of which mobile payments is just one very small functionality that they rolled out to test out the waters of this type of technology) to see where their next big idea can come from.

Some may argue this sounds the death echo for PayPal as a more negative person would argue that they're just grasping at straws. I'm still optimistic. They're trying things out for now, but I think they'll find their way.

Don't Hate Me Because I'm Google-ful

Just when the Best Buys of the world thought that the travesty was over--- when they took the break to take a breath and wipe their brows, thinking that the showrooming phase was over....

They were wrong. Dun dun DUN!

Apple was recently rewarded for their EasyPay solution (allowing consumers to scan things in stores and buy them through their phones through an internet connection). This, in my opinion, seems not just like another one of those cases where Apple just like suing people for the fun of it (just kidding--though let's be honest, it makes sense for them to protect their turf that way, and who's to say that it isn't ALSO fun? Could definitely be part of it). I know, all the Appleheads out there right now are wetting themselves, celebrating the ways that Apple does all things in a miraculous way. But Apple isn't doing anything particularly new here, in fact, it's really taking a page from eBay's book when they acquired Red Laser or maybe even Google's book since they host a plethora of barcode scanning apps such as ShopSavvy and ScanLife and may be even *gasp* have been ahead of the game in incorporating it through Google Goggles (PS- Google Goggles might be one of the sexiest apps concepts I've ever heard of. Google basically said "Anyone can build a barcode scanner, we're going to build something that can recognize bar codes, print ads and OBJECTS. Take that!")

It's okay. Everyone wants to be like Google. Apple just announced a "Blue Sky" initiative allowing their employees to take on pet engineering projects... which sounds an awful lot like Google's "20% Free Time", one of their most productive, innovative management ideas to date.

Everyone likes to bring up the Google Wallet product, since it hasn't been an instant winner. At the IGNITION conference, Chris Haylen (Vice President and General Manager of Payments for Intuit) claimed that Google Wallet wasn't successful because their whole strategy was geared under their advertising agenda.  Another popular hypothesis is that they simply don't have the infrastructure to support their solution. Sure, some other companies, like eBay, are celebrating their recent successes in mobile transaction volume, but Google's got something special.


I mean, at least they're not RIM. It's a sad day when you get p0wned by Yahoo.


Finally, even with Google's not so awesome products, we still own it. As seen by this awesome ad.

TechnicalogiVentures (Bar & Grill)

I'm the bartender. My bar is a simple one named, somewhat non-sensical word. That's how you know I'm legit. I sit, I watch, wipe some cups, give knowing smirks when required of me.

Across the room, PayPal is a little gun-shy-- coming off of a small dating rut from the PayPal Here and layoffs, she's definitely ready to get back in the game with record mobile sales this holiday season thus far. Google and Apple are peacocking (look this up if you don't know what this means, it's a real thing...and hilarious that it's a real thing), sidled up by the bar in their hoodies and wayfarer sunglasses. Google is proudly showing off their new functionality for Google+, the fact that Barack Obama used Google Hangout (true story) and their general awesomeness high after finishing a year where they got big props for their Hurricane Sandy Emergency System (unfortunate cause, but fantastic response) and their winning (?) battles against their many legal suits. Maybe their Google Wallet hasn't been perfect, but they're tweaking it--adding new functionalities like P2P payments (much to PayPal's smugness). Apple released the iPhone5 to the delight of Appleheads everywhere....and to the sadness of the Apple Maps maker (really? You were "Surprised by the popularity of the maps function"?) / happiness of AOL's Mapquest (yes this still exists). Nevertheless, they still pin their iPad Mini's to their shirts, and play with their drinks while chatting with their "its complicated" significant other, Intel.

Microsoft is still in the dating game. Known for being one of the most exclusive bachelorettes (c'mon, I have to be gender neutral), Microsoft has long been a powerhouse and is warily testing out the waters with its new Surface tablet to complaints about it being too highly priced but also to cheers of it being filled with potential in bridging the gap between work and play.

I mostly console Groupon as he sits, hunched over his whiskey sour at the bar. He's had a bit of a rough year. His IPO didn't really work out like planned. Launched late last year, it was too be a match made in heaven--I mean, it seemed so good at first! IPO was The One, it was going to change the way that he could business, and for good reason! In the increasingly saturated market of e-couponing/ e-offers, Groupon is probably wishing they took Google's offer now that it's clear their business model needs a re-tweaking. Groupon has been reduced from eligible newbie to disheveled hipster-type, with his CEO under fire for plunging stock prices going so far to say that he would fire himself if he ever thought he was the wrong man for the job.

I just don't know how to help the guy honestly. I mean, if Restaurant.com is even getting in on the local deals business with their Double Deals, it seems like the whole world just wants to be single and try to make it on their own. Restaurant.com has a compelling story on his own, since he can leverage his existing market share that he's achieved through his restaurant coupons, but that just means (unfortunately) just more competition to pile on-- on top of the Gilt City, LivingSocial, HomeRun and LifeBookers of the world.

Maybe this is the time for the couponers to look at some of the non-central players that are also here. There's Visa who's hanging out casually shooting pool-- with their new e-commerce authentication system (driven by real-time risk analysis) its a true signal they're looking forward to more e-business and on-the-go quick payments. Since Groupon has also moved into that space, it could always be a good partnership-- sipping wine in front of a fireplace, discussing a right-time, right-place offers/payment solution.

Or maybe look at other relationships for inspiration. Amazon Payments just inked a deal with FailSafe Payments for merchant processing. Maybe not the sexiest relationship-- I mean, Failsafe is no Italian supermodel. But it's a stable one-- they have complementary interests, AND it provides substance to the relationship. Amazon gets more of that processing pie, FailSafe gets a little more big-name branding. That one might just work out.

I heard there might be some new eligible bachelors/bachelorettes coming on the scene-- a crowd-sourced fraud detection system, NCR and Ingenico are strong on the prepaid payments front (always an overlooked watering hole) and Square cut their pilot with New York Taxis short, so maybe they're looking.

Not everyone can be lucky in love. So don't give up hope yet, you lonely and looking. You'll find someone.

Until then, I'll be here to lend a sympathetic ear, talk it out. Maybe give out some hugs. Let me fill up your cup.

Update: Poor Groupon. Google just acquired a Incentive Targeting, and Mason finally caved to an interview with BusinessInsider yesterday, which people are dissecting as we speak. Poor PayPal! Visa has been seen about town with Bank of America and RBS to tout V.Me.

The Rise (& Fall?) of Empires: PayPal

As much as it hurts me to say it, I think we may be at the end of an era. Once a behemoth, PayPal is now struggling to stay pertinent, relevant and useful. Now, PayPal sits at a turning point. Its move forward strategies will undoubtedly hold the key to its success and potentially, its existence.

PayPal: Oh PayPal! How I love you! Your quirky start-up attitude, even as you grew into a tech adolescent. Your awkward stage when you grappled with the acquisition of multiple subsidiary companies by your motherland (eBay)-- some of which were incredibly successful (Bill Me Later, StubHub, RedLaser) and some of which are still percolating to produce a return (the much hyped Zong). You even remained stable in the midst of the selling off of your brother-from-a-different-mother, Skype (sold to Microsoft in late 2009).

Then a turning point happened, mobile payments spread onto the scene quickly. The geekers and the gawkers were beside themselves with the possibilities-- oh the countless opportunities!!-- that bluetooth, RFID (and its cousin/child NFC) held. Pay and go stickers were all the rage. You watched as your brethren, Bling Nation, attempted to make the sticker play by tying it to users' PayPal accounts. By 2011, Bling Nation had ceased operations. I understand what you must have been feeling-- everyone you thought would be around with you into the future were slowly falling by the wayside. Maybe you were a little gun-shy after that-- totally understandable! As your parent company publicly said that they didn't see the future in NFC, you steadfastly continued moving forward.
You were still cautious, curious even, as you proceeded. You needed something that would allow you to make that quick branch between physical and digital-- a way to capitalize on consumers in their pockets and in the store so that they could access you wherever they were. So you struck a deal with Discover to leverage their terminals to access the PayPal system so that you could get in on some of that easy terminal money. You were smart and accepted you were wrong in underestimating the volumes behind mobile payments. Now, you could have the best of both worlds! You can still have mobile capabilities and leverage an existing players' terminals-- it was genius! Not to be stopped in your slow, very humble expansion (maybe you're just trying to fly under the radar), you quickly established your own terminals in Australia, with fees that would be "on par" or with a "slight premium".

Your Future is still uncertain, but one thing is for sure, it's a good thing that you didn't bail out completely of the mobile payments game, considering you hit record mobile transaction volumes during the December 2011 holiday shopping season. However, be careful my dear friend! Customers seemed to be pretty surprised by the ease of use of your new terminal systems in Australia, but few customers knew it existed (it was rolled out in small businesses) and even fewer were using the check-in features that you had built into the system. Beyond low consumer awareness, you're playing with fire with those potential "slight premium" fees! In a world where we've already seen the cannibalization that results from Square (to your PayPal Here), the Google Wallet (to your traditional web-based payment model) and the hype around Apple Payments occurring through Bluetooth (poor Bump! What happened?!)

I wish you the best as you go forward into the great unknown. But be careful! In order to maintain your supremacy-- your "tech titan" card that gets you into that special club where Google shoots pool and Apple watches games on the big screen--you have to put more work into being a leader. Although your attempts so far have been strong in terms of thinking, you have been overly cautious in not wanting to have a "first mover" mentality. Your Pay Here happened after Square, but I won't fault you for that! Lots of folks decided to jump on the bandwagon after Jack Dorsey took the hit for market testing that crazy idea. But Google beat you to the punch in introducing a wallet! I know, I know, you don't believe in the wonders of the wallet, but bottom line is that Google made it into physical stores before you. How could this be? Play to your strengths my dear friend, push hard in the online space, but begin to branch into those physical locations before Google takes all of the physical footprint. Your direct relationship with merchants, particularly with the smaller ones (which, by the way, account for the greatest volume of transactions), should be your advantage. Making it easier for them might require more investment on your part, but it doesn't mean that it won't pay off in the end. After all, PayPal is "The Safer, Easier Way to Pay".

Payments Predators and More

The landscape for All-Things-Tech, which is, awkwardly acronym-ed to be ATT (no comment) has been alive and kicking this week!! More than anything, maybe it’s because of the cold, these technology firms have been getting mighty comfortable with each other. Maybe too comfortable.

The real question I ask is, are they being friendly? Are they just trying to keep up? Or are they being predatory? Let’s see the breakdown:

 

·         Groupon recently announced that they were going to move into the Payments business with the launch of their new payments platform: Groupon Payments

o   Predatory: Groupon’s value proposition is simple—they pledge to match the lowest cost option for any merchant to accept credit cards will deliver overnight credit card deposits daily. Although the reasoning behind this move is not a surprise (they process a lot of payments, yo!), Groupon’s size and experience is what will set it apart in terms of its ability to scale and provide valuable customer service. Groupon will be partnering with hardware developer ROAM (who has created readers for others in this competitive industry) to develop an audio jack reader (a la Square) as well as a case based reader (a la Verifone’s PayWare). By offering processing at a discount, Groupon is gunning for bigger processors (First Data) and alternative folks (Square). Its true test will be whether consumers trust a company known as a consumer product brand to handle their sensitive payment information.

·         Facebook jumps in on couponing through Offers, adds additional rider on when it will allow people to use their “free” Offers service

o   Keeping Up/Predatory: Facebook jumping into Offers this past May is really not that surprising (other than the fact of why it took them so long). Adding a rider on their “free” offers service requiring merchants who want to be featured to buy advertising….well that’s a little different. In terms of advertising, Facebook like advertising not only because it makes up approximately all percent of their revenue, but also because they like to gather that data on their users…just like Google. The true test for Facebook will be to see whether merchants are willing to pay for the right to be featured, or if, since they have to pay anyway, they’ll just move to the Google shop down the street.

·         Microsoft completes release of additional details on “Surface”, Apple releases a “special event invitation” to discuss iPad Mini

o   Predatory: Microsoft wants to get in on the tablet game, which is predatory. Apple is trying to simultaneously defend its position among the tablet market (currently the majority of the tablet market, despite its high cost hardware) and move into the tablet market that as defined with Samsung’s 7” (which was taken off shelves due to Apple’s angry lawsuit-ing, even though the judge ultimately ruled for Samsung. Needless to say, Apple is appealing)

·         MasterCard and NTT Docomo are linking up to spread mobile payments overseas

o   Friendly/Predatory: This one is another one of those halfers because MasterCard is being relatively friendly with the telcos in that I don’t think that MasterCard wants to get into the telco business. MasterCard has already launched an NFC payment app with Singapore’s Starhub and Everything Everywhere in the UK and Deutsche Telekom in Europe. In this case, MasterCard is simply leveraging more partnerships and NTT Docomo is leveraging MasterCard’s network. That being said, MasterCard really wants to undercut the potential opportunities through its established, NFC-based PayPass service. MPesas and Google Wallets around the world are getting nervous because, although MasterCard is a friendly for NTT Docomo, MasterCard is not a friendly for other mobile payments players in the emerging markets.