Is tap-and-pay transit the key to m-commerce adoption?

Digital marketplace eBay reported its third quarter earnings on Wednesday, trumpeting revenues of $3 billion–a 32 percent year-over-year increase. eBay CEO John Donahoe credited the jump to the company’s fast-growing mobile commerce efforts: “We expect eBay mobile commerce to generate almost $5 billion in merchandise volume this year and PayPal mobile to exceed $3.5 billion in payment volume,” Donahoe saidin a prepared statement. “Mobile is one way online and offline shopping are blending into a single commerce environment. We are focused on enabling commerce, helping consumers shop anytime, anywhere, and being the commerce partner of choice for retailers of all sizes.”

But mobile commerce is about more than just buying stuff. That was the central theme of American Express group president of enterprise growth Dan Schulman’s keynote speech at last week’s CTIA Enterprise & Applications 2011 conference. Schulman outlined an m-commerce model encompassing retail transactions as well as mobile coupons, offers, loyalty programs and related marketing tools. “There’s no longer a difference between online commerce and offline–with my smartphone, I can have exactly the same information overlay in front of me as on the desktop,” he said, noting that consumers can now access product information, pricing comparison data, recommendations and special offers. At the same time, Schulman said, merchants and marketers can leverage mobile devices to deliver and track more customized offers to consumers who opt in for in-store promotions.

“Mobile payments are not about tapping phones at the point of sale,” Schulman said, plainly referring to nascent tap-and-pay initiatives like Google (NASDAQ:GOOG) Wallet and Isis. “That’s interesting, and it may be good for consumers, but it’s going to take some time to be compelling if that’s all mobile payments are about.”

As if in response, Google significantly expanded its Google Wallet initiative this week, making it clear that retail purchases are just one facet of much larger ambitions. In addition to using their Nexus S Android smartphones to make purchases at 300,000-plus MasterCard PayPass-enabled merchant terminals, consumers may now redeem coupons and/or earn rewards points at select U.S. retailer partners including American Eagle Outfitters, The Container Store, Foot Locker, Guess, Jamba Juice, Macy’s, OfficeMax and Toys”R”Us, with no paper coupons or loyalty cards necessary. In addition, Google Wallet’s Featured Offers tab now boasts exclusive discounts from American Eagle, The Container Store, Macy’s and Jamba Juice. Google is also working with Chevron, D’Agostino, Faber News Now, Gristedes Supermarkets and Pinkberry to equip their stores to accept Google Wallet transactions as well.

No less significant, Google Wallet is moving beyond the retail segment altogether: Google is partnering with the state of New Jersey to enable tap-and-pay rail and bus transit purchases at select locations. NJ Transit is the first public transportation agency to announce support for Google Wallet–commuters may leverage the application to buy tickets at New York Penn Station ticket vending machines and ticket windows as well as Newark Liberty International Airport Rail Station (AirTrain). NJ Transit will also offer Google Wallet ticketing on bus routes 6, 43, 80, 81, 87 and 120, and on some buses on the 126 line. (NJ Transit adds that its public-private partnership with Google was developed at no cost to the agency.)

If you live in a large metropolitan area, chances are you rely on public transit at least a few times each month, if not more often–it’s easy to envision how much simpler life could be knowing you could hop on a subway or train and pay your way via smartphone regardless of whether there’s cash or an active fare card in your wallet. Google knows it, too: “Transit is the fastest way to accelerate adoption and reach usage density in major urban centers by habituating the behavior of tapping and paying with phones,” said Google vice president of commerce Stephanie Tilenius in a statement. eBay may be the first prominent company singing the praises of m-commerce in its quarterly earnings, but it won’t be the last.

Source: http://www.fiercemobilecontent.com/story/tap-and-pay-transit-key-m-commerce-adoption/2011-10-19

Google In-App Payments Appear Slated For a Full Launch in May

Google may be looking at May for a full release of much anticipated in-app billing features, at least according to an e-mail sent today by a payments company the search giant recently acquired to former customers.

In a letter leaked to TechCrunch, Jambool, which was behind virtual currency platform Social Gold said it will discontinue the service in favor of a Google in-app payments product in May. But Jambool customers can use the company’s merchant console through September and get financial statements through February of next year. Google acquired Jambool last August for a reported to $70 to 75 million, just as the company was being cornered on the Facebook platform by the emergence of Credits.

Google’s in-app payments product is currently in beta testing. A handful of developers, including Disney’s Tapulous, have gotten their hands on it to experiment with in hits like Tap Tap Revenge. But it’s not out to consumers yet.

In-app billing promises to bring Android developers the income that has long eluded them on the platform, at least compared to what can be made on iOS. Across multiple platforms including iOS, developers are transitioning from reliance on upfront paid apps and advertising to a model that resembles what has worked on the Facebook platform — virtual goods. Two developers, Pocket Gems and TinyCo, have raised sizable rounds from Sequoia Capital and Andreessen Horowitz respectively on the bet that dominant gaming companies will rise in the next 12 months.

There are a number of remaining questions, however, about how Google will implement in-app payments. Google’s Eric Chu, who oversee the company’s relationship with the Android developer community answered a few of these in an interview in January.

1) Can it execute payments well? Part of the original reason why Google Checkout turned out to be so lackluster, at least from our understanding, was that it suffered from a convoluted vision. It was initially conceived as a product that would help small to medium-sized businesses, but then internal politics turned it into a product aimed at larger corporations, which require more time-consuming custom work. Secondly, it’s unclear how the product is being internally managed — how much is it under the purview of the Android team, and how much is it under the oversight of the commerce group under eBay veteran Stephanie Tilenius?

2) How strongly will Google enforce the use of its approved payment methods in the Android marketplace? Developers selling content, goods or services within apps on the Android Marketplace have to use an “authorized Payment Processor,” which basically means Google Checkout or direct carrier billing. There are two exceptions: if you sell physical goods or services like movie tickets or digital goods that can be consumed outside of the application, which is presumably the loophole that companies like Amazon or media publishers can use to sell songs or content through other payment systems.

Conceptually though, we find Android’s payment policies less problematic than on other platforms. There will be multiple Android app stores, some of which will be heavily promoted by carriers like Verizon or by competitors like Amazon, which developers can turn to if they want to use alternative payment methods.