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Google Wins Mobile Payments Race With Summer Launch Of ‘Wallet’ App

Well I guess you could say if Google is gonna get into this space, then all with be looking and wanting to follow.

A couple of interesting things I see in this space unfolding – one around the opportunity for targeted, relevant advertising ( with a bit of social location thrown in for good measure) and the second for a robust solution that tackles the area of fraud. Maybe device fingerprinting from a company such as Bluecava could provide a solution that tackles both these areas. Let’s see….

The race to make mobile payments mainstream is one of the most competitive contests in the wireless industry, pitting telecom operators against credit card companies, payment processors, handset makers and operating system providers. With its May 26 announcement that it is poised to launch a national mobile commerce network (using its Android phones), Google now appears to be in the lead.

The service, called Google Wallet, will store credit cards in electronic form on Android phones. Users will be able to pay for purchases by wirelessly “tapping” their handsets against special readers in participating stores. Users can also receive targeted offers, such as coupons for products they have bought in the past or have indicated they like, directly on their phones while in stores. Loyalty rewards will be automatically tallied within Wallet and receipts will be electronic, as well, popping up on the phone instead of printing out on paper.

Merchants have already started testing the setup and will begin trials in San Francisco and New York City before expanding nationally this summer. American Eagle, the Container Store, Macy’s, Subway, Toys “R” Us and Walgreens are part of the initial group of retailers that will support the system.

As the name Wallet suggests, the app will support a variety of different cards, including credit cards, loyalty cards and gift cards. At first, Google Wallet will only work with Citi MasterCards, since both companies are Google Wallet launch partners. Users can also opt to load money onto a prepaid, Google-hosted card that can be funded by another type of credit card. Google says it will add more cards over time and hopes to eventually include other types of ID and passes, such as drivers licenses, event tickets and electronic hotel keys.

Retailers, says Google, will benefit from a corresponding service called Google Offers that will enable consumers to search for special offers and save them to their Google Wallet. Those stored coupons can then be redeemed by tapping a Wallet-equipped phone at a cash register or showing the phone screen to a cashier.

Merchants will be able to customize incentives based on a customer’s location and transaction history. A particularly frequent customer can receive a higher-value deal than a less loyal customer, for instance. Google Offers will go live in Portland, San Francisco and New York City this summer.

Google also plans to support location-based “check-in” offers, offers that are placed like ads in Google searches and offers that are situated in Google’s local business/maps service, Google Places.

Using a cellphone as a wallet is convenient but could be risky. Google says its Wallet app contains multiple levels of security, including a phone screen lock and a required Google account and pin number. The search giant also says credit cards are encrypted on a secure element within the phone and never fully displayed.

Part of the security comes from a chip developed by European semiconductor maker NXP, which collaborated with Google on its latest flagship smartphone, the Samsung-made Nexus S. That chip also enables Google Wallet to communicate wirelessly with all the various Wallet partners, via a technology called NFC (near-field communication).

Google’s vision appears similar to strategies espoused by organizations like ISIS, the mobile commerce startup backed by AT&T, T-Mobile USA and Verizon Wireless. New York-based ISIS is about a year behind Google, though it may have an advantage in being compatible with a greater variety of phones once it launches.

During Google’s Thursday New York event, its Vice President of Payments, Osama Bedier, argued that Google is “uniquely positioned” to roll out a mobile commerce program because of its wide-ranging partnerships forged through Android and its search and advertising businesses. Bedier, who was a top executive at eBay’s PayPal until January, noted, “This has to be an ecosystem; it can’t just be one company.”

Bedier also acknowledged Google’s lead in the mobile payments race by adding, “This is not just an idea or announcement…this is up and running.”

Source: http://blogs.forbes.com/elizabethwoyke/2011/05/26/google-wins-mobile-payments-race-with-summer-launch-of-wallet-app/

Best Buy expands location-based walk-in rewards to 1,300 locations nationwide

Shopkick- Best BuyBest Buy drives in-store traffic via shopkick app

Best Buy is ramping up its mobile game by expanding shopkick walk-in rewards to all of its 1,300 locations nationwide.

The company is rewarding consumers and offering consumers exclusive deals just for stepping inside almost any of its locations. Best Buy originally unveiled shopkick in 257 stores and the nationwide launch will now place shopkick in all 1,296 Best Buy and Best Buy Mobile United States locations.

“This is basically what we’ve been waiting for since we’ve been launched,” said Cyriac Roeding, cofounder/CEO of shopkick, Palo Alto, CA. “The roll out is the ultimate proof that shopkick is working for retailers.

“After 9 months of testing, Best Buy went nationwide,” he said. “It was much sooner than planned.”

The Best Buy family of brands and partnerships collectively generates more than $50 billion in annual revenue and includes brands such as Best Buy, Audiovisions, Best Buy Mobile, The Carphone Warehouse, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, Napster, Pacific Sales, and The Phone House.

Last year, shopkick launched its mobile application that hands consumers high-value rewards, offers and exclusive deals at shopkick’s national retail partners simply for walking into stores and malls. Even more rewards can be earned for scanning partner brand products at over 250,000 stores nationwide.

Mobile rewards
Previously, Best Buy was awarding shopkick users when they shopped in its store locations.

Now, the company is simply rewarding consumers just for walking into a store.

Best Buy ran tests that show incremental lift in traffic when they increased rewards for walking in.

Smartphone shoppers can download the shopkick mobile application to take advantage of the initiative.

According to Best Buy, the rollout will make the company the first of shopkick’s launch partners and first consumer electronics retailer to provide the mobile shopping experience to customers.

How it works
The shopkick app, combined with the shopkick Signal – an inaudible sound emitted from a patent-pending device located in each participating retailer – verifies a user is in-store, and then rewards them for visiting in the form of a currency called “kicks.”

Best Buy originally unveiled shopkick in 257 stores and the nationwide launch will now place shopkick in all 1,296 Best Buy and Best Buy Mobile United States locations.

“We recently released shopkick 2.0, which allows you to select your favorite stores and you can select them and they are always with you in a sleek user interface where you can see their deals anytime, and swipe them and see them at any point,” Mr. Roeding said.

“In the next step we’re going to show initial cool features and that’s a big step forward because consumers love to interact with their most favorite places and no one has offered you only your favorite places in one screen, on one app in top deals only,” he said.

Source: http://www.mobilemarketer.com/cms/news/content/10010.html

Who owns the paying mobile consumer: carriers or handset-makers?

Handset manufactuers, carriers and payment franchises: Who has the power?

The battle between Research In Motion and wireless carriers over mobile-payment data is a precursor to a larger war over who owns consumers making transactions using mobile devices.

United States carriers assumed continued ownership of their subscribers with the announcement of Isis, their bid to create a standard for enabling contactless payments and marketing at retailers’ point of sale via Near Field Communication. Now RIM and other handset manufacturers are exploring alternatives to that model, and the equation gets even more complicated when factoring in payment franchises such as Visa, MasterCard and American Express.

“Technically, RIM and Apple cannot preclude the SIM card solution proposed by the U.S. carriers through the Isis joint venture, and the carriers can’t preclude RIM from developing a mobile OS solution,” said David Schropfer, author of “The Smartphone Wallet,” Red Bank, NJ.

“From a consumer perspective, a smartphone connected to a mobile network will have more features—like loyalty program integration), and offer a higher degree of control for the consumer, than an application that relies on the NFC connection to the retailer during a transaction,” he said.

“The biggest question is whether or not the consumer will have access to those products in the future, or if efforts to bring these products to market will be derailed by the incumbents.”

Who will brand the mobile wallet?
The gist of the debate between BlackBerry-maker RIM and the carriers is whether data related to mobile payments will sit on wireless devices’ SIM cards, thus keeping the control with the carriers, or whether the handset-makers can build payment credentials directly into handsets, potentially doing an end-run around the carriers.

The argument boils down to who owns the customers using a mobile wallet and who gets a cut of the revenue—and how much of a cut.

RIM and other handset manufacturers would prefer to partner with financial institutions directly.

BlackBerry devices set to launch later this year will reportedly have NFC chips embedded in them, as does Google’s Nexus S Android smartphone.

Speculation has been rampant as to whether or not Apple will support NFC with the release of the iPhone 5.
The assumption was that when NFC was brought to market, carriers would control the SIM cards, a single-wire protocol with an NFC antenna directly connected to the secure elements in the device, per Yankee Group.

“That was the traditional model—the assumption was that with NFC, the final say of which credentials go onto the mobile phone would be controlled by the carriers, which is why they thought they could shut out Visa and MasterCard with Isis,” said Nick Holland, senior analyst at Yankee Group, Boston.

Inside Secure is an example of a company that sells chipsets that allow operating systems on mobile devices to access not just one secure element, but many.

Mr. Holland said that it does not have to be just the SIM now that is dictated by the wireless carrier—there can be an additional secure element on top of the SIM that companies such as Gemalto supply.

The key takeaway: Whoever owns the secure element, owns the transactions.

“Maybe six months ago the only option for Visa or MasterCard would have been an NFC sticker, but now they have the potential to completely bypass the carriers by partnering with the OEMs or creating an SD Microcard they put out themselves,” Mr. Holland said. “RIM is doing this, and I would expect others to follow suit.

“Carriers want the potential for everybody to access the secure element, but it is going to be messy, especially in the U.S., where the carriers pretty much dictate which handsets are on their networks,” he said. “Is AT&T going to say, ‘no, I’m not going to stock the new iPhone, thank you very much’?

The real value proposition for NFC is it being really simple to use, and if there are multiple secure elements on a device, that is adding additional dimensions of complexity for consumers.

This fight is over who owns the secure element, which could somewhat disrupt the usability of these handsets, per Yankee Group.

Mr. Holland believes that there will be less of a monopoly in terms of who owns the secure element going forward. That will lead to competition for carrier initiatives such as Isis.

“Isis has a real problem on its hands now,” Mr. Holldand said. “The carriers assumed that they would own the handsets and the SIM, and therefore said ‘We will own the transaction and we can shut out Visa and MasterCard.’

“However, if you are Visa, you probably don’t want to put out an SD Microcard on your own—it would be much easier to rent space on the SIM,” he said. “Isis may have to play nice and let Visa and MasterCard rent space on the SIM and process transactions.

“This is going to be really hotly fought over.”

Source: Mobile Commerce Daily http://www.mobilecommercedaily.com

It’s all about the mobile web…isn’t it? Part Deux

I once referred to Eric Schmidt as ‘Derek’ by mistake, slip of the tongue…but anyway, if Derek ahem…Eric, says its all about the mobile web, then its gotta be true…right?…oh and he’s leaving Google too!

In the latest Harvard Business Review, guest contributor Eric Schmidt, CEO of Google, writes about the company’s plans for the coming year, saying “as I think about Google’s strategic initiatives in 2011, I realize they’re all about mobile.” It’s notable that Schmidt didn’t say “mostly,” or “many,” of its initiatives are about mobile – he said “all” of them are.

There are three main fronts where Google’s strategic vision will come into play in 2011, explained Schmidt, one of which is “mobile money.” Yes, the CEO just confirmed Google’s plans for a mobile payments service. And apparently, we’ll see it this year.

In the article, Schmidt explains that we’ve reached a point where, thanks to geolocation and the power of the phone’s Web browser platform, it’s possible to deliver personalized information to users about “where you are, what you could do there right now, and so forth, and to deliver such a service at scale.”

LTE Development


In order to achieve that overarching vision, Google will be focused on three mobile fronts in 2011, the first being the development of high-speed mobile networks. Specifically, Schmidt referred to LTE, a technology that mobile operators have begun to call “4G,” although, technically it does not meet that standard’s requirements in terms of speed. Instead, 4G has been adopted as a marketing term which simply means “faster networks.” Schmidt says that these networks will be 8 to 10 megabits, roughly 10 times faster than what we have today. The new networks will help enable new applications, “mostly entertainment and social,” for modern mobile phones.

The wording of the article almost makes it sound like Google itself would be developing the LTE networks themselves, which is odd. That’s not to say that Google isn’t interested in LTE’s progress for its own ends – for example, Google and Apple are in a bidding war for 4G patents that are being auctioned off by Nortel Networks in the wake of its January 2009 bankruptcy. It is more likely that this is the sort of “development” Google is referring to, not building out network infrastructure. If Google is able to secure these patents, it can incorporate the technology they cover into its mobile operating system Android to offer more powerful applications for things like gaming, communications and social networking. The company that ends up on the losing side of this patent battle will have to pay royalties if it wants to do the same.

Mobile Money

The second front that Schmidt referred to is mobile money. “Phones, as we know, are used as banks in many poorer parts of the world–and modern technology means that their use as financial tools can go much further than that,” he wrote.

That was the extent of his comment, but it effectively confirmed that not only is Google working on a mobile payments service, but that service is a major area of focus for this year.

We’ve been following Google’s plans in this area, having noted a Google job posting for an NFC (near field communications) expert in January, which appears to be related to the Google mobile payments service. Plus, we connected the dots involving Google’s many initiatives that could be tied together to create this mobile payments platform.

Most recently, the addition of NFC, a short-range, high-frequency technology for data exchange between devices was added to Google’s Android mobile operating system. This technology already lets you scan Google Places window decals for businesses testing Google’s Hotpot program, a Yelp-like local recommendations service. But these are just cogs in a much larger machine. By launch, Google will be able to track the stickers for local places you scanned, your ratings and reviews on Hotpot, and then your actual transactions performed on your Android phone at checkout. It will probably deliver related coupons and discounts too, as Google’s attempted (but failed) acquisition of local couponing service Groupon seems to imply.

Increase Availability of Inexpensive Smartphones

Google’s third major initiative for 2011 is to increase the availability of affordable smartphones worldwide. With Android, this trend is already well underway. There are several Android-based smartphones now available for under $100. And with the launch of Broadcom’s mass-market 3G chipset (BCM2157), phones made with those components can retail for less than $100, even as low as $75.  Plus, chip maker MIPS also just launched Android smartphones with MIPS chips at this year’s Consumer Electronics Show, in order to reach the low-end market. The MIPS phones could retail for under $100, even without a contract.

”We envision literally a billion people getting inexpensive, browser-based touchscreen phones over the next few years,” wrote Schmidt. “Can you imagine how this will change their awareness of local and global information and their notion of education? And that will be just the start.”