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Mobile first-quarter 2013: analysis and outlook

Wed, 10 Apr 2013 06:55:19 +0000

The mobile platform wars escalated once again in the first quarter of 2012 as BlackBerry finally took the wraps off its much-anticipated new operating system. Meanwhile Android continued to build on its dominance both worldwide and in the U.S., cementing a two-horse race with Apple.

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SumUp adds American Express to its mobile point-of-sale terminal roster

David Meyer — Thu, 21 Feb 2013 10:14:02 +0000

And so the European mobile point-of-sale (POS) terminal wars continue. With iZettle, Payleven, Adyen, mPowa and SumUp all trying to replicate Square’s dongle-based model in the EU, the various stages in this scramble for the mobile merchant tend to involve the signing of distribution partnerships or the support of new cards or card technologies.

Yesterday it was iZettle adding chip-and-pin capabilities — as happened earlier this month with Payleven — and partnering up with Banco Santander, and today it’s SumUp’s newfound support for American Express cards.

SumUp is still working on the technical implementation for the deal, and its merchants will start being able to take payments from AmEx cardholders in the second quarter of the year in the UK, Germany, Ireland, Austria, France, the Netherlands, Spain and Italy. Belgium and Portugal should follow, though SumUp is still in negotiations with American Express on that point.

This is not the first such firm to sign with AmEx – after all, American Express has actively invested in iZettle. However, according to SumUp, the deal means the company “will accept more types of cards in more regions than any other mobile point-of-sale technology provider worldwide”. Co-founder Stefan Jeschonnek told me SumUp has “several tens of thousands of merchants” now using its terminals, and “several thousand” are joining each week.

SumUp does have an extra trick up its sleeve, too: later this year it will be bringing out the slightly Square Wallet-ish SumUp Pay, which will let end-users pre-approve a participating merchant through an app, then pop up on that merchant’s system as soon as they walk into their shop – the idea there is to allow purchases based on a simple verbal interaction with the merchant, without the need for even taking the phone out.

And according to Jeschonnek, SumUp will be able to exploit its growing installed base of merchants to crack the classic chicken-and-egg problem associated with mobile wallet schemes:

“We’re making payments smoother today with the card reader, but we’re thinking about how things should work in the future. We are building technology to make that real-world interaction possible again… The difference this time around is that we already have a pretty large and fast-growing merchant base. For our merchants to accept SumUp Pay will be as simple as updating their app.”

He added that SumUp Pay would also provide a nifty way around Visa’s stringent authentication procedures, which have previously proved a stumbling block for the likes of iZettle, when it launches later this year.

It’s good to see companies innovating in the financial technology space, and SumUp’s focus on in-house technological development theoretically places it well there. That said, with the mobile POS wars as heated as they are in Europe right now, I would not be in the least bit surprised to see a rival try to beat SumUp to its frictionless payment goal.

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MasterCard and Deutsche Telekom team up to push NFC payments

Ryan Kim — Mon, 02 Jul 2012 15:34:03 +0000

Mobile payments made through near field communications technology are still waiting to become a mainstream tool for consumers, but momentum keeps building for NFC, which may be looking at a break-out moment next year. Yes, that’s a line that’s been repeated in recent years, but the pieces keep falling into place. The latest news comes from MasterCard and Deutsche Telekom, which announced a partnership today that will bring NFC contactless payments to DT’s 93 million mobile customers in Europe.

The mobile payments system will incorporate a SIM-based chip and will work with a mobile wallet. It will roll out first in Poland while in Germany, DT and MasterCard will start with a trial using NFC stickers and cards this year before a launch in the first half of next year. Eventually, the service will spread out across DT’s European footprint. The mobile wallet service will also be open to other banks and partners, who will be able to access the wallet.

DT is helping take the lead on NFC payments by “becoming a credit card issuer for MasterCard” and “acting as a sales partner for NFC enabled Point of Sale terminals,” said Angel Dobardziev and Eden Zoller, analysts at Ovum in a research note. The carrier is also providing NFC tags for consumers who don’t have NFC-enabled hardware. DT hopes to make money through a share of transactions as well as rental fees. “The drive behind Deutsche Telekom’s mobile payments strategy is to create a comprehensive framework that will address many of the challenges in what is currently an incomplete ecosystem,” the analysts said.

Earlier this year, Vodafone partnered with Visa in a bid to bring Vodafone-branded NFC payments to at least five European countries over the next year. The prepaid service would enable Vodafone to take a cut of transactions fees when users made purchases. Unlike the DT deal, Visa would be the issuer, so Vodafone would not need to get an e-money license. Telefonica UK launched an O2 Wallet in April and said it will be enabled for NFC later this year. And last week, French carrier Orange announced the launch of a SIM-based NFC payment system across France.

The carrier initiatives suggest that NFC may be finally ready to realize its potential. The operators are getting motivated by the idea that they can make some money through NFC transactions.

But the services still face a lot of the same challenges that have existed for a while. Merchants in many cases are still slow to adopt NFC-enabled terminals, which are needed to complete payments. Carrier-led payment initiatives will also face competition from other payment services, which could ultimately lead to confusion early on as consumers try to understand which system is right for them. Consumers will also need to be pursuaded that paying with a tap of the phone makes more sense than using cash or credit, which are still very easy to use. A lot will depend on the additional services these wallets provide such as deals and offers.

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MasterCard expands PayPass wallet service into a platform

Ryan Kim — Tue, 08 May 2012 00:22:14 +0000

MasterCard is expanding its mobile payment service PayPass into a larger platform called PayPass Wallet Services that will enable PayPal-like online payments and will include APIs (application programming interfaces) for developers to integrate their payment apps and services with PayPass. The service takes MasterCard further into digital payments and pits it against credit card rivals Visa and American Express, who are also moving forward with their digital wallet offerings.

PayPass Wallet Services will include three components:

The PayPass Acceptance Network will allow merchants to handle electronic payments both online and contactless using near field communications.
PayPass Wallet gives consumers a way to pay for things using any number of credit, debit and pre-paid cards from Visa, American Express, Discover. Consumers will be able to easily check-out without having to enter in credit card and shipping information.
PayPass APIs will show developers and partners how to connect their digital wallet into the PayPass Acceptance Network. That will allow them to take advantage of MasterCard’s check-out, authentication and security services.

American Airlines and Barnes & Noble are the first two companies which will use PayPass online as a payment option. American Airlines will also incorporate PayPass Wallet into its mobile app. The plan is to roll out PayPass Wallet Services in the third quarter, first in the U.S., Canada, UK and Australia before expanding to other countries.

Eventually, PayPass will offer a host of features for consumers such as quick balance checking before purchases, spending controls and alerts received in real time and personalized offers and loyalty programs.

This is another sign of how the credit card companies are looking beyond their traditional products and stepping up with their own digital payment services that are more open, mobile and cross channel. Visa is moving ahead with V.me, which is starting as an online payment system but will move into in-store payments using NFC. American Express introduced Serve, a kind of PayPal competitor that enables online transactions, peer-to-peer payments and carrier billing through Payfone. While PayPal, Google and the carriers along with rising start-ups like Square are trying to redefine payments in a more mobile and social world, the credit card companies are making sure they don’t fall behind and lose their relationship with consumers. As we’ve said before, a lot of these financial institutions are still in the driver’s seat in mobile payments because they have a trusted relationship with consumers.

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Social media in Q1: commerce and discovery dominated

Fri, 20 Apr 2012 06:55:19 +0000

Media issues like advertising and discovery along with commerce dominated the activity in social and real-time Web technologies during the first quarter of 2012. Google raised some hackles, Facebook responded to demands from traditional advertisers, and Yahoo got a new chief executive. The quarter also saw Pinterest, the newest social media star, showing signs of staying power; it is starting to be a force in content discovery. This report examines these trends and more, as well as provides a near-term outlook for the next 12 to 18 months.

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BonaYou’s social-gifting Mastercard scheme gets funding

David Meyer — Tue, 06 Mar 2012 16:24:20 +0000

Social gifting is an increasingly popular trend, with services such as Wrapp and Dropgifts offering a Facebook-connected way for people to send each other gift cards.

However, those gift cards tend to be for a specific retailer or group of stores. Now a Munich-based startup called BonaYou is taking a less constricted approach, and it’s just closed a first round of financing to help it spread across Europe.

Like the other services, BonaYou also plugs into Facebook so the user can select who will receive the gift, but the gift comes in the form of a real or virtual pre-paid Mastercard, rather than a store card. Real cards, which can be redeemed in physical and online stores across Europe, get mailed out in a customizable box, while virtual cards get emailed in PDF form and can only be redeemed with online stores.

Funding came on Monday in the form of €500,000 ($650,000) from HTGF and an undisclosed amount from the Make a Startup Angel Fund. HTGF (High-Tech Gründerfonds) is a very active venture fund for German companies, backed up by the government as well as big national stalwarts like BASF, Deutsche Telekom and Carl Zeiss.

The cash should help with BonaYou’s expansion plans –- right now, the company is only operational in Germany and Austria.

“We are already starting the translation of the website and want to start in the UK, France, Spain and Italy this year,” co-founder Patrick Löffler told me. He said the company intended to expand across Europe, but has no plans to take it further just yet.

Löffler also indicated that BonaYou would soon be adding a collaborative element to its gift-giving service, allowing people to chip in on gifts. This kind of functionality is already available with some of the other social gifting firms, but then again those services are telling the recipient where they can and can’t spend their money.

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Opportunities and challenges for mobile deals

Wed, 29 Feb 2012 07:55:17 +0000

The trend “mobile deals” combines location-aware discounts with mobile marketing campaigns and often incorporates purchases made on the phone at brick-and-mortar retailers. This report sizes up the mobile deals space with an aim to present a comprehensive view of the influential companies and technologies. Heavyweights like Google, PayPal and American Express are moving aggressively forward with new offerings, and it will be worth watching their different strategies (e.g., deploying QR codes vs. NFC technology) to see which dominates and sets the overall bar for the market.

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Defining the mobile wallet: what it is, why it matters

Ryan Kim — Thu, 23 Feb 2012 19:34:20 +0000

The upcoming showdown between Google Wallet and soon-to-be competitor Isis is just one of many interesting story lines that will take hold this year as companies ratchet up their mobile wallet offerings. But with all the new products from a variety of players comes a potentially confusing year as the term “mobile wallet” gets thrown around repeatedly. What exactly is the “mobile wallet”? Here are some important definitions for those looking to make a move in the space.

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MasterCard starts piloting QkR mobile payment app

Ryan Kim — Thu, 26 Jan 2012 16:31:37 +0000

MasterCard isn’t standing by while rivals such as Visa and American Express move forward with their own wallet apps. The credit card company is rolling out the first trial of its QkR mobile application, a mobile payment app that allows people to interact and initiate payments via QR codes, NFC tags and other technologies.

MasterCard is working with Australian cinema chain Hoyts and Commonwealth Bank on the first pilot of its QkR app (pronounced quicker), which I first wrote about in September. Visitors to high-end Hoyts movie theaters will now be greeted by QR codes and NFC tags on their seat armrest. Using the QkR app, available on both iPhone and Android, they can scan the QR code, manually enter in the code or tap their NFC-enabled phone on the NFC tag, which pulls up a menu of food items. Users can then pay with a preloaded credit or debit card and their food will be delivered right to their seat.

It’s a nice way to avoid lines and get some better service in a movie theater. But QkR also shows how MasterCard is looking to leverage mobile apps, NFC and QR codes to build out a payment system that can work in a variety of settings. The QkR app can work for businesses and restaurants, allowing consumers to grab discounts or menus with a scan or tap, and help them check-out right through the app. That can help businesses to be more efficient in letting users order and pay when they want to but it also opens up more channels of communication so a merchant can establish a relationship with their users.

Last fall, MasterCard also showed off how QkR can work through TV shopping shows that display QR codes onscreen or through commercials that can send out high- and low-frequency signals that can prompt the QkR app to pull up information. It can even be used in conjunction with Xbox Kinect for TV-based transactions.

2012 is lining up to be a big year for mobile wallets: Be prepared to get hammered over the head with that term. But there are still some differences in the way each one operates. MasterCard is really trying to leverage a variety of technologies with its mobile payment app so it can be used both in-store and in the living room as well. It’s also partnering with other wallet initiatives like Google Wallet.

I can see why some businesses and restaurants are curious about QkR, though we’ll have to see who actually deploys it here in the U.S. However, it also reminds me that many retailers and businesses are going to be confused as to which of these payment services they want to support. With so many options from Google Wallet, Isis, PayPal, V.me from Visa, and others, it’s not clear which one may make the most sense for businesses. That will be one reason, beyond hardware upgrade concerns, why mobile payments may take some time to take off this year: it’s just going to be confusing (subscription required) with all the different mobile wallets popping up.

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MFoundry raises $18M from MasterCard, Intel for mobile payments

Ryan Kim — Mon, 05 Dec 2011 13:24:19 +0000

MFoundry has emerged as a leader in mobile banking, providing its Software-as-a-Service model to almost 600 banks, credit unions and other financial institutions. Now it’s raising $18 million to expand its mobile banking business into mobile payments, something I wrote about last week with its partnership with new investor MasterCard.

MasterCard and Intel Capital, which are new investors in mFoundry, join existing investors Motorola Mobility and FIS in this round. The money will help build mFoundry’s existing mobile banking business, which includes creating mobile apps for some top banks, including Bank of America and PNC. As it showed last week with its MasterCard partnership, mFoundry is looking to turn those mobile banking apps into digital wallets by adding support for MasterCard’s PayPass NFC payments. That will allow banks to provide their own digital wallets that work at NFC-equipped point-of-sale terminals.

MFoundry, which has raised $50 million to date, is trying to leverage the quick growth of mobile banking, which it said is on pace to hit 50 percent penetration in six years, far faster than ATMs and online banking, which took 15 and 20 years, respectively, to get to 50 percent consumer adoption. It has previously worked on mobile payments with Starbucks, developing and managing its Starbucks Card Mobile payment app.

“The opportunity in mobile financial services is enormous,” said mFoundry CEO and co-founder Drew Sievers. “While our existing mobile banking business is scaling rapidly, there are many other related opportunities that we believe can add significant incremental value to our company.”

This move to add more payment tools could be a big opportunity for mFoundry. As I wrote before, the banks have one of the most trusted financial relationships with consumers and are in a very good position to offer digital wallet services and teach people about new technologies like NFC. At the very least, having an option like mFoundry lets them offer their own alternatives to services like Google Wallet and Isis, the NFC carrier joint venture from Verizon, AT&T and T-Mobile.

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