As I wrote last week the advent of iBeacon and bluetooth low energy may effectively mean that NFC as an in-store mobile payments standard in the US market is dead. Google Wallet had placed a big bet on NFC payments but has been thwarted in its bid for adoption by two principal factors:
Google Wallet 1.0 thus was a failure. Google is now out with a new Android version (and soon iOS) is making a renewed bid for consumer adoption with a range of new features and a partial move away from NFC. In-store payments still depend on NFC and so won't be happening at scale any time soon for the same reasons cited above.
However the new features add utility and breadth to the user experience. Here's what's new:
Exactly a year ago we surveyed 1,501 US adults and found the vast majority were not interested in the idea of mobile wallets: 71% said "I'm not at all interested . . . in using [my] mobile phone to pay for things and replace cash or credit cards." Another 15% said they had only "limited interest." Only 14% had some interest or significant interest.
In specific contexts, where consumers see the tangible benefits of mobile wallets, these numbers change. But in the abstract the public remains largely uninterested in mobile wallets.
Last week news broke than McDonald's is considering rolling out mobile payments. Currently the McDonald's app is primarily a store locator. The app also offers nutrition information.
According to a Bloomberg report, the company has been testing mobile payments in Salt Lake City, Utah and in Austin, Texas. McDonald's has roughly 14,000 US stores and 35,000 globally.
Mobile payments would allow McDonald's patrons to pre-order meals online and then pick them up at the drive-thru window. Other fast-food chains have tested, are testing or now using mobile ordering/payments. The McDonald's app will also feature deals and rewards according to Bloomberg.
A mobile ordering/payments capability may also help McDonald's attract younger users and Millennials, who are less inclined than others to visit the QSR chain. According to an AdAge write-up of an NPD Group survey:
Millennials are indeed going to burger chains, but they are going less often. The hamburger category, which includes McDonald's, Wendy's and Burger King, still receives 29% of all millennials' quick-service visits, according to NPD, more than any other restaurant category. Fast casual, which includes chains like Chipotle, gets 6% of millennial quick-service traffic.
But hamburger chains have seen a 16% decline in traffic from Millennials since 2007, NPD said. In the year ended November 2012, Millennials made 3.6 billion visits to hamburger chains, down from 4.2 billion visits in the year ended November 2007. There was a 12% decline in quick-service restaurant visits by Millennials in the same time period.
Ultimately all QSR chains will offer mobile ordering/payments. And that will help acclimate a generation to using their smartphones as wallets to pay for things.
Once people are familiar and comfortable with mobile payments in a specific context (e.g., ordering food) they will be more inclined to embrace them in other scenarios.
Nokia's Lumia handsets represent about 80% of Windows Phone's sales. However Nokia was continuing to lose share to Android and iPhone in key markets across the globe. By the same token Windows Phones had failed to enable Nokia to re-enter the US smartphone market in any convincing way.
Since the inception of the Microsoft-Nokia deal in early 2011, we had been arguing it was a serious mistake for Nokia to not offer an Android phone. However the terms of the agreement between the companies precluded that. In 2014 the deal was set to expire. But before that deal was renegotiated, Microsoft acquired Nokia's phone hardware business for roughly $7.2 billion.
In the middle of last year we speculated that Microsoft might be compelled to acquire Nokia for defensive reasons. When the acquisition was announced a little over a week ago, I argued had Nokia embraced Android it would not have been so weakened and forced to sell itself. I also speculated this summer that Nokia would be compelled to come out with Android handsets if it wanted to survive:
My view is that Nokia will be compelled -- notwithstanding contractual exclusivity with Microsoft -- to adopt Android at some point in the not-too-distant future or remain stuck in what amounts to neutral.
Now the NY Times is reporting that Android Lumia phones were in development:
A team within Nokia had Android up and running on the company’s Lumia handsets well before Microsoft and Nokia began negotiating Microsoft’s $7.2 billion acquisition of Nokia’s mobile phone and services business, according to two people briefed on the effort who declined to be identified because the project was confidential. Microsoft executives were aware of the existence of the project, these people said.
There are two overlapping potential scenarios: Nokia was developing Android handsets in part to add leverage in negotiations with Microsoft (for renewal or acquisition); and/or Nokia was developing Android handsets in earnest and would have rolled them out -- forcing Microsoft to avoid that outcome through an acquisition.
Regardless it appears that the idea of Nokia marketing both Android and Windows Phones was a potential disaster that Microsoft sought to avoid at great cost -- literally. As I've written elsehwere, however, it remains unclear that Microsoft's $7.2 billion have been well spent.
Microsoft is reportedly readying its answer to Siri and Google Now: Cortana. Named after a central character in the game Halo, Cortana aims to go beyond both Siri and Google Now by being a more comprehensive way to interact with Microsoft devices.
According to Microsoft watcher Mary Jo Foley:
Cortana, Microsoft's assistant technology, likewise will be able to learn and adapt, relying on machine-learning technology and the "Satori" knowledge repository powering Bing.
Cortana will be more than just an app that lets users interact with their phones more naturally using voice commands. Cortana is core to the makeover of the entire "shell" -- the core services and experience -- of the future versions of Windows Phone, Windows and the Xbox One operating systems, from what I've heard from my contacts.
A comprehensive personal assistant powered by AI across all Microsoft systems and devices is a very ambitious plan. It remains to be seen whether Microsoft can do it.
Yet in order to not be perceived as more than a me-too product Microsoft will have to roll out something truly impressive and more utilitarian than Siri or Google's mix of voice-enabled search and personalized data features.
Update: TheVerge offers a series of relatively bland Cortana screenshots.
I wrote several days ago on my Screenwerk blog about PayPal's new Beacon payments and indoor location initiative. I explained that Apple's decision not to include an NFC chip in the new iPhone means essentially that NFC is marginalized if not dead in the US market. In its place Bluetooth Low Energy (BLE) may become the mainstream alternative to what NFC would have enabled (e.g., mobile payments).
PayPal Beacon relies on BLE. At those businesses where a Beacon device is plugged in PayPal users simply check-in. Beacon identifies them and payment is automatically transferred from the default account. Payment happens “hands free” without a tap, swipe or other app interaction.
Beacon is also PayPal’s entry into indoor location. PayPal will obviously know you’re in a venue and then can do any number of things, including delivering highly specific, indoor marketing messages or ads. PayPal is also making Beacon available to third party developers, who will be able to do similar things accordingly.
Apple's iOS 7, which will be available on September 18 (to older iPhones as well), will permit all eqipped devices to interact with BLE iBeacons in malls, airports, stores and other venues.
Apple acquired indoor mapping company WiFiSlam earlier this year. That was the "wake up call" for many people to take indoor location seriously. One of the first and obvious applications of iBeacon is indoor mapping. But it doesn't stop there.
Just as with PayPal's BLE initiative, iBeacon will enable Apple to move into payments and indoor marketing and allow third party developers to leverage those capabilities. With its more than 600 million credit cards on file I've got to believe that Apple will enter mobile payments eventually and BLE will be the way in all likelihood.
More broadly I suspect that iBeacon will popularize and jumpstart indoor location for a host of third party developers.
For a comprehensive introduction to the indoor location and marketing opportunity, and its broader implications, come to Place 2013.
The Apple iPhone event just concluded. Everything that was announced at the event had been leaked or written about beforehand, including:
However that last item, the "Touch ID" fingerprint sensor, was the stand-out announcement in my view. It will enable users to both unlock their phones and confirm iTunes purchases instead of entering a password:
Put your finger on the Home button, and just like that your iPhone unlocks. Your fingerprint can also approve purchases from iTunes or the App Store.
What I mean by the headline is that Touch ID is to the 5S what Siri was to the 4S: a kind of "wow" feature that helps it stand out from other smartphones. It partly compensates for the fact that Apple didn't introduce a larger screen, which everyone now wants. That's coming with the iPhone 6.
Both Opera and Yahoo introduced splashy new apps for the iPad today. Opera introduced a new browser called Coast. On first glance, the browser has some nice features. In particular users can pin icons to the home screen, much like they can on the iPhone and close pages by swiping them away (like the old PalmOS and Android today). Most of the nagivation is based on swiping or the touch of a single button.
Opera calls Coast a totally new tablet experience:
The result is a completely designed-for-iPad browser, subtly elegant, made to fit tablet users in every respect. Crafting Coast meant redesigning the complete experience. We focused on how iPad users actually interact with their tablets. Coast is the perfect companion for your iPad, allowing a more relaxing and lean-back browsing experience when you are on the go or just hanging out on the couch.
The iPad is nearly buttonless; why shouldn’t the apps for it be? Elements such as back and forward buttons are gone from Coast. All navigation is done by swiping the way you naturally would on an iPad – just like in a good iPad app. A single button takes you to the home screen, and another shows the sites you have recently visited – that’s about it for buttons in Coast.
When using touch-based navigation, small buttons that work on a regular computer don’t work well on a tablet. It’s not about just enlarging already existing elements; it’s about making the design interesting and uncluttered . . .
Designing for iPad means rethinking everything. Tablets have a lot of screen real estate, and we thought it was about time to put it to good use. Coast does way more than merely migrating the lessons learned from desktop computers to a tablet.
Yahoo has a new tablet-centric video app (though it also works on the iPhone). Called "Yahoo Screen," the app features video from multiple sources, including Comedy Central and SNL, among numerous others. It's not YouTube but an attempt to created a video destination, with lots of clips that can support video pre-roll ads. There's quite a diverse array of content from food and instructional video to sports and movie clips.
Yahoo has done a nice job with the user experience. Content is the key to success however. The company will continue to need to feed content to the app if it wants to build and sustain an audience. The company had sought to buy Hulu at one point. And now it's moving ahead with its own video product and increasingly original web-only programming.
A few years ago companies like aisle411 or PointInside were mobile apps in search of an audience and a business model. In the past couple of years, however, everything has changed.
The proliferation of public WiFi, the adoption of smartphones (now 62% in the US) and the recognition among hospitals, malls, airports, stadiums, grocery and retail stores that indoor location could bring better customer experiences (and compelling data) has radically altered the landscape. The principal business model also went from being an ad/coupon-supported one to a technology licensing model, with indoor analytics leading the way.
Today aisle411 announced a $6.3 million Series A round (Cultivation Capital, Google’s Don Dodge, St. Louis Arch Angels, the Billiken Angels, and the Springfield Angel Network). The total the company has raised since being founded in 2008 is roughly $10 million.
Most major US retailers (e.g., HomeDepot, Macy's, Wal-Mart, Target, Nordstrom, etc.) and malls across the US are now adopting indoor location, to reap the "big data" and offer more personalized, locally relevant and engaing customer experiences. We're only just at the beginning of a huge wave of indoor innovation.
One of the featured sessions at the Place Conference will showcase aisle411. I'll also be "in conversation" with Google's Don Dodge on why he believes indoor location and marketing will be bigger than outdoor maps and GPS.
The conference will also present other in-venue and retail case studies from PointInside, ByteLight and Meridian (Aruba). If you haven't yet registered for the October 8, 2013 event do so today.
Apple's iPhone launch event is confirmed for September 10. It will take place at Apple's HQ in Cupertino, California. The company is expected to announce multiple devices at the event, including a new iPhone 5S, potentially an iPhone 5C and possibly an iWatch wearable device. There may also be new iPads.
The iPhone 5C is real and may come in a variety of colors (5 is the rumor) -- hence the colorful bubbles in the invitation. The forthcoming 5S is supposed to come in a champagne or gold in addition to traditional black and white. Pricing of these devices is uncertain, though the 5S will likely follow past pricing ($199 with 2-year contract, etc.).
Some reports have suggested the 5C will cost between $400 and $500 unlocked. Carrier subsidy pricing is TBD. The real question surrounding the 5C is how appealing will it be? How "good" wil it be?
Apple is walking a tightrope.
The 5C is intended to make Apple more competitive in developing markets and at the "lower end" of the market where there's more price sensitivity. If the phone is "good enough" and cheap enough -- does the "C" stand for "cheap" or "China" or "color"? -- it could potentially cannibalize sales of the 5S. But if the phone is not of sufficiently high quality it will fail and Apple's brand will suffer.
I suspect that Apple will include a previous-generation chip in the 5C (perhaps the current 5 chip), whereas the 5S will get a new more powerful processor. There may also be memory limitations with the 5C. However the apps and app ecosystem should be the same.
The primary differentiators will thus likely be price, color, materials (plastic) and processing power/speed. But how does Apple build an attractive product that is competitive but doesn't overshadow its more profitable flagship product? That's the dilemma.
E-commerce hosting and services provider MarketLive released a mid-year benchmarketing report yesterday, covering digital marketing and commerce trends through the lens of its many clients. There are many interesting findings. I'll focus however on the mobile aspects of the report, which appear to directly contradict a comScore m-commerce report released today.
The comScore data argue that there are many more e-commerce transactions happening on smartphones vs. tablets. This was something of a surprise to me. Accordingly, comScore puts the total value of US mobile-drive e-commerce at $10.6 billion for 1H 2013; 6% is from smartphones and 3.5% is from tablets.
These numbers contradict everything I've seen about conversions and commerce on smartphones and tablets. One potential explanation may be that there are nearly 2X the number of smartphones as tablets in the US market.
However the MarketLive data, as mentioned, show something much more consistent with earlier findings I've seen from many sources: tablet e-commerce conversions are higher and tablets are driving a greater percentage of overall revenue than smartphones.
According to the very busy MarkeLive slide below, smartphones drive more overall traffic but tablets generate considerably more revenue. MarketLive says that roughly 12% of e-commerce revenue for its clients are coming from tablets, whereas only 2.7% is coming from smartphones. However 19% of traffic comes from smartphones vs. 13% of visits from tablets.
Tablet conversions are 3X conversions on smartphones.
This morning the Pew Internet & American Life project released new data on teen app usage and mobile privacy. The big "takeaway" is that teens care very much about privacy and have taken action against (deleted) mobile apps they feel unnecessarily or gratuitously collect personal information or location data.
Pew says that 78% of teens have a mobile phone (though not all have smartphones) and 23% have tablets. The teen smartphone penetration number is probably 58%, given that's the number of teens who have downloaded mobile apps.
Just over half (51%) "have avoided apps due to privacy concerns" while 26% have uninstalled an app because it was collecting personal data. And 46% of teen mobile users have turned off location tracking features (on their phone or in an app) out of concern for privacy.
Teens are more forgiving of apps that seek location data where there's a logical and clear justification for the information (e.g., maps). Girls are more likely to disable location tracking than boys; 59% of girls vs. 37% of boys have done so.
Separately but still on the theme of privacy, Facebook announced today that it would give more control to Facebook mobile log-in users over what information is shared by third party apps on the Facebook Timeline and News Feed. Here's what the company said today in its announcement:
Although Facebook Login is widely used, we understand people’s concerns about apps posting on their Timeline or to their friends. For the past several months, we’ve been rolling out a new version of Facebook Login on mobile to address these concerns.
With this new update, mobile apps using Facebook Login must now separately ask you for permission to post back to Facebook.
Don’t want to share your music playlist or workout routine with friends? You can choose to skip sharing altogether.
Clearly separating sharing means people can decide whether they only want to use Facebook Login for fast registration without also sharing back to Facebook. If you want to share later, you still can.
This involuntary sharing element was a selling point for publishers and developers but a turn-off to many users. It became a significant barrier for some to using Facebook log-in for third party apps/sites.
By separating sharing from social log-ins Facebook hopes to remove friction for many people who might log in with Facebook but don't today for privacy reasons. I'm in that group.
To say that Facebook's mobile ad revenue growth has been impressive is an understatement. It has been, what you might call, meteoric.
In the course of a 12 month period the company has gone from less than 10% of ad revenue from mobile to 41% in Q2 of this year. By the end of this year (or very early next) 50% of Facebook's ad revenue will likely come from mobile. (By comparison, in 2012 more than half of Twitter's ad revenues came from mobile.)
In Q2 '13 Facebook made more than $650 million in mobile ad revenue. If current trends continue expect Facebook to have a $1 billion mobile quarter by 1H 2014 (and possibly Q1 earnings). That would enable the company to claim a $4 billion annual mobile-ad revenue run rate.
Based on averages and simple math, Facebook made roughly $0.80 per mobile user in Q2 on a global basis -- up from $0.50 in Q1 of this year. However developed markets offer more revenue than emerging markets and so the revenue generated per mobile user will vary considerably from market to market in practice.
In 2010 we asked "How Long Before Facebook is a Mobile Ad Network?" and predicted that when Facebook turned on mobile ads it would immediately become the largest mobile "network."
As formidable as Facebook is becoming in mobile Google is still dominant globally. Incredibly, Mountain View is expected to capture more than 50% of mobile revenues on a global basis this year. Facebook claims a much smaller percentage of mobile revenues, but still ranks as the number two player in mobile advertising today.
As apps and websites become optimized for mobile commerce, and as the "credit card problem" is addressed (see TheFind and Jumio), there will be more buying on smartphones. Most retailers and brands currently assume smartphone transactions happen on the go or in stores (or on other devices). In the home e-commerce is supposed to be the domain of PCs (and increasingly tablets).
The conventional wisdom is that smartphones are more heavily used for shopping out of home and that's been supported by prior survey data. Yet data released yesterday by Nielsen tell a somewhat different and more nuanced story.
The reinvented 4INFO announced a deal with Acxiom this morning that is consistent with the way mobile and the broader digital advertising markets are evolving: advanced targeting and in-store/sales lift measurement.
According to the release, "The partnership provides US consumer brands new levels of mobile advertising precision and confidence for customer relationship campaigns, including the ability to measure results where it counts — at the cash register." Accordingly, companies will be able to use their own data to target existing customers (and prospects) on mobile devices -- and then track response to the point of sale and see direct sales impact.
Facebook has a similar product and relationship with Acxiom. At Facebook "Custom Audiences" allows companies to find and target their own customers on the site or in mobile. Catalina has a deal with 4INFO that leverages the former's purchase history data so that third party CPG companies and others can target buyers of specific products/product categories. But the 4INFO-Acxiom CRM-based targeting and sales measurement may be a first (other than Facebook) in mobile.
Behind the scenes the advertiser's CRM/customer data (or Acxiom audience data) are matched with 4INFO's database on a 1:1 basis. 4INFO claims profiles of 152 million mobile devices covering 101 million US households.
4INFO will also be making Acxiom audience segments data available to its "AdHaven Bullseye" advertisers. Most of the ad inventory 4INFO uses come from mobile exchanges.
It's worth repeating; what's significant about the announcement are the ways that it's a kind of harbinger of the future:
As I've argued elsewhere in-store/sales measurement will become an almost mandatory requirement of many mobile campaigns (depending on the objectives). There are now multiple companies including Placed, PlaceIQ, uSamp and others offering the capacity to measure in-store lift from mobile campaigns. Being tied into CRM databases offers even greater accuracy in terms of measuring sales impact.
Once these methodologies become more widely available and understood, advertisers will demand them. Placed and PlaceIQ will be talking about ad tracking to the point of sale and in-store measurement at Place 2013. The early bird conference rate expires this week. To take advantage register today.
Android's share (of smartphone shipments) across the globe is gaining momentum according to the latest IDC numbers. By contrast there's evidence that Android's US share may have "peaked" according to analysis from Asymco's Horace Dediu.
Below are IDC's estimates showing global market share for Q2 by shipments:
Thus Android stands near 80% of global smartphone shipments, which aren't identical with sales. But it's a directional indication of actual sales.
However in the US market the story is different; Android's share is flat (per comScore):
Dediu points out that over the past six to eight months in the US the iPhone has gained more usage than Android (11M vs. 6.6M users). So it would appear that Apple's US and international fortunes have significantly diverged.
However we also have research from CIRP, which finds (via survey data) that "first time smartphone buyers" in the US (meaning those buying smartphones for the first time now) tend to be older and more price sensitive. They buy "secondary Android brands" (e.g., LG) and keep their phones longer.
Apple's strategy for more price-sensitive consumers has been the iPhone 4 and 4S, which has been reasonably successful to date. However rumors suggest a low-cost "plastic" iPhone for emerging markets and more price-conscious consumers.
When looked at in the context of overall computer operating systems (including the PC), Android will be the dominant OS by 2015 on a global basis -- far outstripping Windows. By comparision, Apple's overall OS share (iOS + Mac OS) is expected to nearly match Windows.
Nielsen revised slightly upward its smartphone penetration data for the US market. Last quarter the figure was 61%; as of today Nielsen says that 62% of American adults own smartphones.
Kantar research has been arguing that their data show the rise of Windows Phones in the US. However the Nielsen numbers reflect that in Q2 Windows Phones had just 2.3% market share. BlackBerry had 3%. And the remainder, 92%, was divided between the iPhone and Android.
Apple continues to be the single leading smartphone OEM, followed by Samsung. Motorola, HTC and LG are closely arrayed after that.
Motorola is hoping to "reboot" its brand and sales with the new Moto X. What's perhaps most fascinating about the handset is that it targets women specifically, by positioning the phone as a personal fashion accessory.
Motorola's former (pre-Google) strategy had been very spec- and male-centric. The company had even attacked the iPhone at one point for being a "princess." At least with this model (Moto X) it's a dramatic shift for the company.
Last week the American Consumer Satisfaction Index (ACSI) released findings asserting that the Samsung Galaxy S3 and Galaxy Note II beat the iPhone 5 for customer satisfaction. The Galaxy S4 was not part of the study, which was conducted before the device's release. Somewhat Ironically, Korean consumers said the opposite: that they preferred Apple devices to Samsung's.
Here are the US ACSI scores by device:
Survey questions addressed the following areas:
What's interesting is that Apple rates higher than Samsung overall in the ACSI company scores -- though Samsung has closed the gap vs. 2012:
Apple more handily beats Samsung in the JD Power ratings, where the iPhone 5 contributed to Apple's overall 2013 smartphone win. In the JD Power satisfaction scoring, Samsung is at the bottom of the group. How can these conflicting scores (within the ACSI and between ACSI and JD Power) be reconciled?
The ACSI report offers no real explanation for the Galaxy and Galaxy Note wins. Other than screen specs, Samsung's phones are not the highest quality Android devices on the market. Arguably HTC, LG and perhaps Motorola have stronger offerings from an overall quality perspective. However Samsung outspends them all (combined) on marketing, which has been the chief driver of the Galaxy line's success.
My suspicion is that consumers are responding to screen size more than any other single variable or factor in rating the Galaxy S3 and Note II above the iPhone. This underscores the larger-screen imperative that Apple now confronts. The company needs to produce an iPhone with a larger screen. And according to multiple rumors, that will happen with the iPhone 6 though not the "5S," which is supposed to retain its current screen of just over 4 inches.
The new Google-Motorola Moto X chose not match the S4 and go to 5 inches after the company did considerable consumer research and arrived at 4.7 inches as the optimal screen span. Accordingly, an ideal screen size for a smartphone is probably right in-between the current iPhone 5 (4 inches) and the Galaxy S4 (5 inches).
There are a number of interesting things about Googlerola's just-released Moto X. First, it emphasizes design over specs. The latter had always been the hallmark of Motorola's previous Android ("Droid") phones. The new phone also allows for an unprecedented degree of customization:
In fact, the way the phone is presented on the Motorola site makes it effectively into a fashion accessory. However that's how many people do treat their smartphones today. The customization, which is smart, is apparently made possible because the phone is manufactured in Texas (rather than China).
But beyond those things, the phone can be activated or invoked without touching it. Users can speak commands to the phone and get responses or create reminders, set alarms and so on. Like Google Glass, Google Now can be initiated with a "wake up" phrase: "OK Google Now." This effectively turns the entire phone into a personal assistant. The TV spot linked below demonstrates this positioning and the functionality in action.
Previously Google Now and voice actions on Android devices had to be initiated by touching the screen: swiping up or touching the microphone icon. That's not required here (I haven't had a chance to use the device). Google/Motorola are using this "always ready" assistant capability to make the device stand out from both the iPhone and other Android devices. Below is one of the new TV commercials for the Moto X, which showcases how Google Now is now being "personified" -- much more like Siri than in the past.
Moto X is priced at $199 with a two-year carrier contract in the US. There will be a Google Play edition but there's no word at this point on unlocked pricing.
Yesterday the Wall Street Journal reported that carrier-backed and NFC-based mobile payments venture ISIS would begin rolling out nationally:
The nearly three-year-old venture, known as Isis, plans to announce Wednesday that it will launch the payment service nationwide later this year after nine months of testing . . .
Isis said that the pilot tests' findings will be incorporated into the latest version of the system. Among other things, the test showed that active users tapped their phones for payment more than 10 times a month. Two-thirds of active users chose to receive offers and messages from specific brands, according to the test results.
While mobile payments will eventually be widespread -- different global markets are seeing varying rates of development and adoption -- the near-term future of mobile payments in the US looks less like ISIS and much more like OpenTable's new (vertical) payments offering.
The NY Times yesterday reported that the restaurant reservations app will soon incorporate no-frills mobile payments:
The payment process, still in testing, will be straightforward, Matthew Roberts, chief executive of OpenTable, said in an interview. At the end of a meal, the diner would open the OpenTable app and pay the check with the tap of a button. The diner can review the check, adjust the tip and finish the payment.
“There’s no scanning, there’s no bar codes, there’s no geeky stuff,” Mr. Roberts said. He said that OpenTable would not take a cut of each transaction if a diner paid with the app. The restaurant would be charged the typical interchange fee for a credit card transaction. The simple transactions through the app are another way to attract people to use OpenTable, which charges restaurants for reservations made through the service as well as a monthly service charge for using its equipment.
In individual store and specific vertical contexts mobile payments are starting to take hold in the US. That's because consumers see concrete value or convenience in using mobile apps to pay (parking is my favorite example). Arguably the most successful example of mobile payments in the US to date is the Starbucks app.
As a general matter, however, credit cards remain very easy to use and there's no common standard or experience available across merchants. Most US consumers don't see a justification for mobile payments in the abstract. But "in the moment" or in very specific situations consumers can recognize their value.
The transition to NFC-based payments will probably still take years in the US market -- unless the next iPhone enables them (ISIS wants to expand to iOS). But there's a significant, immediate opportunity for vertical apps like OpenTable to cultivate consumer mobile payments usage. Mobile payments through the OpenTable app also may create more loyalty and frequency vs. competitors such as Yelp or TripAdvisor.
I believe that these very concrete use cases will help train consumers to trust and adopt mobile wallets/payments, which will eventually pave the way for services such as ISIS or Google Wallet. However it will be 3 - 5 years before there's strong, national consumer usage (and merchant adoption) of these "horizontal" payments offerings.
By contrast people will be using OpenTable payments as soon as OpenTable flips the switch.
Dan Miller and I took a briefing with Jumio this morning. Jumio is an authentication and identity management platform (mischaracterized originally as "augmented reality"). The company has been around since 2010.
It has two major products that rely on the same technology. Netswipe helps facilitate transactions on mobile apps and Netverify enables accurate remote identity authentication for fraud prevention. I'll focus on the former but the latter is very impressive and worthy of its own discussion later.
Jumio works in the same way that Card.io did. Using an SDK developers embed the Jumio solution within their apps. When the consumer is ready to complete a transaction or check out (book a room, flight or make another kind of purchase), she merely scans the desired credit card and enters the CVV number manually. The transaction takes a fraction of the time that would otherwise be required if she were to key in 16 digits, enter her address information, etc.
If you've already got your credit card and related information on file (see, e.g., Amazon, iTunes) there's less of a need for this approach. However developers should offer it to new customers as a way to generally eliminate barriers for consumers, and capture credit card details for faster checkout next time.
Jumio competitor Card.io was acquired by PayPal one year ago, leaving Jumio as the lone independent vendor of this type card-scanning technology. Every mobile publisher and developer should be using Jumio or Card.io to improve conversion rates and the customer experience. Beyond mobile transaction-abandonment, frustrating users reflects poorly on the brand according to many studies.
Accordingly, every mobile developer should be using a mobile card-scanning solution as one way to remove friction from mobile transactions. It's not clear why they might not, except for perhaps for ignorance, lethargy and inertia. I could also imagine this approach as an alternative to card swipes in stores, although that's less necessary.
Jumio has adopted a flat-fee SaaS model. Customers pay a fixed monthly fee for an unlimited number of transactions.
It's rare instance where consumer and merchant interests are entirely aligned. But here they are: more secure and faster transactions for the merchant and consumer, as well as fewer charge backs and fraud. It's kind of a "no brainer."
Below is a promotion video that explains the Jumio Netswipe offering: