Apple, Apple, Beacons, and Money2020

A few stories grabbed me today so I'll post a bunch of them.

First is Karen Webster who is finally letting the world know that Apple needs merchants in its camp for Apple Pay to work:

http://www.pymnts.com/news/2014/why-apple-pay-needs-merchants-more-than-it-needs-consumers/#.VGDMWTTF_9Y

Next is a good little story that speaks to the pending power of wearable devices such as the Apple Watch for marketing purposes:

http://www.mobilecommercedaily.com/apple-watch-set-to-become-gatekeeper-to-the-iphone

This story speaks to the power of BLE beacon technology and the expectation these will provide a differentiating capability for merchants that have implemented these in time for this year's holidays.

http://www.mobilemarketer.com/cms/news/software-technology/19114.html

Next is a piece on a little Q&A between Mike Cook of Walmart and Jim McCarthy of VISA:

http://recode.net/2014/11/09/this-verbal-confrontation-shows-why-walmart-will-never-accept-apple-pay-video/

Happy Reading,

J.W. Gant

Apple Pay vs. CurrentC

The news the last week or so has been pretty heavy on Apple Pay vs. CurrentC.  The media loves a good fight but why can't they live together?  Maybe not in the short term, but over a long enough timeline won't we see a number of ways to pay with your mobile device?  Don't we already have many ways to pay with our mobile device between LevelUp, PayPal, Starbucks, Dunkin Donuts, Apple Pay, Google Wallet, and CurrentC?

Some are already declaring winners and losers.  Who are they and what are they saying?

Here is Time.com with winners and losers:

http://time.com/3532199/apple-pay-winners-losers/

Here is a snippet from that piece:

But there’s another reason credit card companies are enthusiastic about Apple Pay: the alternative, CurrentC, could be pretty scary.CurrentC is a payment system mega retailers like Walmart and Best Buy are working on that could cut out credit card companies altogether. While Apple Pay leaves the traditional credit card system intact by simply moving it to your phone, analysts speculate that the CurrentC program will link payments through a network connected directly to your savings account. Voila: no middleman.

“If a technology comes along that’s focused on getting you to not use Visa, then that’s a competitor to us,” says Dill. The threat of CurrentC makes Apple Pay look more like a rickety lifeboat for the credit card companies than the super-fast motorboat Apple has promised.

Here is Karen Webster declaring CurrentC dead before it has even fully launched:

http://www.pymnts.com/news/2014/current-c-and-the-big-merchant-mess/#.VFpQADTF_9Y

Here is a snippet from that piece:

So, how does CurrentC to get out of this mess?

Well, I don’t think they do.

I believe that this is the beginning of a huge reboot at CurrentC and quite possibly its complete unraveling.

Karen comes across as at least a little naive in that piece.  Really, the merchants should yield all control of their interactions with the consumer?  Sounds like a recipe to go out of business to me.

At least one person is picking Google Wallet to win over Apple Pay, yes Google:

http://www.pymnts.com/in-depth/2014/peter-thiel-picks-google-over-apple-pay/#.VFo4MzTF_9Z

That isn't unreasonable thinking.  We've already seen payments via Google Wallet bump following the NFC news of Apple Pay.

The big-box retailer Target is in the news as an early supporter of CurrentC, running transactions now in Minnesota according to this piece:

http://www.startribune.com/business/281395391.html

Why are some merchants saying "No" to Apple Pay?  Here is a story on that:

http://blogs.wsj.com/totalreturn/2014/11/04/why-some-merchants-say-no-to-apple-pay/

Here is a snippet from that piece:

Industry observers say the reluctance of some merchants to embrace Apple Pay all comes down to one thing: fees. And consumers are likely to remain caught in the midst of this tug-of-war between credit-card networks and merchants for some time.

Here is a piece on Re/Code that quotes the CEO of MCX a bit:

http://recode.net/2014/11/04/what-are-the-anti-apple-pay-merchants-afraid-of/

Burger King is going with PayPal for their mobile payment option:

http://www.mobilecommercedaily.com/burger-king-chooses-paypal-in-a-refutation-of-apple-pay

Want to understand a bit of the deal Apple Pay made?

http://www.pymnts.com/news/2014/inside-the-apple-pay-issuer-contracts/#.VFohWjTF_9Y

What about Starbucks?  Isn't this the most successful mobile payments mechanism in history, as opposed to Tim Cook's statement about Apple Pay?  Yes it is.

http://www.nbcnews.com/tech/gadgets/forget-apple-pay-master-mobile-payments-may-be-starbucks-n240091

Does this look like space likely to see some consolidation in the coming year or two?  Maybe.  However, it also looks like a space where more than one winner is going to come out on top.  Which ones will those be?

Happy Reading,

J.W. Gant

**UPDATE**  Just a bit more as this one lays out the story of the relationship Apple has forced on the banks and the issuers:
http://digitaltransactions.net/news/story/Issuers_-Apple-Pay-Pact-Assigns-Remarkable-Authority-to-Card-Networks-As-Well-As-Apple

**UPDATE #2** The CEO of MCX, Dekkers Davidson, is at Money2020 and had some comments:
http://www.digitaltransactions.net/news/story/MCX-Chief-Davidson-Strikes-Defiant-Tone-While-Touting-Benefits-of-CurrentC_s-Wallet

Here is a snippet from that piece:

...Davidson attributed much of the negative publicity about CurrentC to the efforts by the 80 merchants that control MCX to “challenge” a payments business that has largely left merchants on the sidelines. “Some have mocked us or laughed at us, some are attacking us,” he said. “That’s to be expected when you challenge the status quo.” Later in his remarks, he returned to this theme, saying, “If you’re going to change the status quo, you’ve got to challenge the status quo.”

The little engine that could?

Best Reading of the Day - Entry 0157 Visa Finds Technology

The world is going digital, that much is clear, and the mobile internet is here.

Visa is not sitting still.

This excellent article on Bloomberg.com tells their story and tells why Visa signed in to Apple Pay:

http://www.bloomberg.com/news/2014-10-02/visa-fends-off-usurpers-by-joining-apple-in-pay-system.html

Here is a snippet from that piece:

A 4-foot-tall robot with a video screen for a head swerves past an orange couch and bumps into the wall of a conference room. A few feet away, an engineer tests a virtual reality headset that can allow a coffee-shop owner to forecast hot-chocolate sales during a blizzard.

This is Visa Inc.’s new outpost in San Francisco -- part executive office, part design laboratory and entirely the brainchild of Charlie Scharf, Visa’s chief executive officer.

Scharf, who this July day had unveiled the latest version of the company’s digital wallet, is sitting in an office overlooking San Francisco Bay...

My thoughts ...

I have a bit of professional expertise in the area of payments and mobile payments.  The large payment networks of today essentially state the two most important players in retail are the consumer and them, forget the merchant.  I've always felt this is out of balance a bit.  What real value do the payment networks provide?  Ubiquity, I can use my Visa card just about anywhere in the world.  Nice.  Beyond that?

Seems like the merchants are left out in the cold in this arrangement and what is shopping without them?  Shouldn't they be in the loop?

Seems like it to me.

The future will be different from today.  Who knows what that will look like.

Happy Reading,

J.W. Gant

Apple Pay

What does Apple Pay mean for mobile payments?

Quite a bit.

With Apple sitting on the sidelines the last few years there has been a headwind to any effort in this space.  The wait and see approach has been preferable to many, and the most affluent and innovative mobile consumers (largely) have been staying with Apple.

That all changed yesterday.

Clearly this will have ramifications throughout the space.  This is validation for efforts towards mobile payments.  The biggest players, including the biggest credit card companies and the largest banks, are all united on this path.  I view it as a sustaining move by the issuers and credit card companies.  They want to see things continue exactly as they are.

What about the merchants?

If you have great margins, as the luxury companies do, or speed is incredibly important for you, or you want/need your brand to be tied to a brand viewed as high-quality, this is good for you.  We've seen the companies announced and that matches perfectly.  What about the masses though?  Lower margins mean the existing payments networks are a terrible drain for you.  That is where CurrentC by MCX comes in.

I see this playing out along the lines of the wealth divide in the United States.  Apple with other luxury brands will ignite Apple Pay and NFC.  Meanwhile, CurrentC will grow amongst the largest retailers in the world.  Things should be pretty interesting the next few years.

Here are a couple articles that provide some perspective.

"New iPhones Will Get us Half Way to Mobile Payments"
http://www.businessweek.com/articles/2014-09-09/new-iphones-will-get-us-halfway-to-mobile-payments

"How Apple's iPhone 6 Can Finally Make Mobile Payments Happen"
http://www.businessweek.com/articles/2014-09-05/how-apples-iphone-6-can-finally-make-mobile-payments-happen

Happy Reading,

J.W. Gant

Apple Payments - NFC, Amex, MasterCard, and VISA?

Wow.

The rumor mill is certainly churning with anticipation building ahead of Apple's announcement in Cupertino on September 9.

The biggest news I'm hearing that doesn't concern a wearable device such as an iWatch regards the following (all rumors until Sept 9):

• The new iPhone will contain a NFC chip to enable payments in close proximity.
• Apple has signed a deal with VISA for mobile payments.
• Apple has signed a deal with both MasterCard and VISA for mobile payments.
• Apple has signed a deal with American Express for mobile payments.

Wow.

Pretty intense rumor mill regarding Apple finally embracing NFC technology, something I've been extremely skeptical of to date.  You can't just ignore a firestorm of rumors though so September 9 should be fun, as we expected it would be.

Here is one excellent article by Karen Webster worth reading if you follow mobile payments:

http://www.pymnts.com/news/2014/whos-on-your-2014-fantasy-payments-team/#.VAW2hcVdX9Z

The American Express rumor:

http://recode.net/2014/08/31/apple-9-9/

The MasterCard and VISA rumor:

http://www.paymentssource.com/news/emerging-payments/apple-said-to-team-up-with-visa-mastercard-on-iphone-wallet-3019019-1.html

How many days left until the event?  Once again Apple has succeeded in building interest for their product launch.  Seems to be a strong feed of information from the supply chain yet again but the main points may have nothing to do with the hardware this time.  That is an opportunity for Apple to regain some of its vaunted secrecy ahead of a product launch.

Happy Reading,

J.W. Gant

**UPDATE** Good article here that lays out the entire story:
https://www.yahoo.com/tech/what-is-nfc-and-why-does-it-matter-for-the-iphone-6-96456683964.html?src=rss

**UPDATE #2** Another good article on this story stated merchants will decide whether or not Apple's foray in to payments will be successful.  True, unless consumer demand forces acceptance, a difficult trick to pull off.
http://blogs.forrester.com/denee_carrington/14-09-04-merchants_will_decide_the_fate_of_apples_mobile_wallet

Best Reading of the Day - Entry 0086 Mobile Payments Revolution?

The people at Mobile Commerce Daily have a good piece on the revolution coming through mobile payments.  The title says a lot:

http://www.mobilecommercedaily.com/payments-companies-will-mobile-end-the-party

Here is a snippet from that piece:

Most multichannel players do a majority of their business offline in their stores but find that online is growing faster than in-store. The payment businesses are categorized into several areas such as issuers, acquirers, processors and others.

What is fascinating is the huge difference in the respective mechanics of how each of these segments creates enterprise value. And, specifically, how mobility disrupts the payments business.

Is mobile technology the silver bullet that has finally arrived which will change the rules and be a catalyst for redistribution of value creation from the payments players to the merchant segment?

Happy reading,

J.W. Gant

NFC and ISIS News Impacts Mobile Payments

Yesterday's news informed us of moves by MasterCards and Visa to circumvent the need for mobile carrier security in mobile payments.

http://www.digitaltransactions.net/news/story/4530

This is a major blow, and some would argue the final nail in the coffin, for ISIS.  The carrier solution to mobile payments now has no reason for being, essentially.

This take on the subject questions the viability of ISIS following the move by the major credit companies:

http://www.mobilecommercedaily.com/mobile-payments-smackdown-did-google-wallet-just-outplay-isis

Here is a snippet from that piece:

The Host Card Emulation feature in Android KitKat for driving near-field communications mobile payments just got a big boost in the form of support from MasterCard and Visa, which could spell trouble for Isis.

One last article speaks of the new forms of payment now opening up because of this move:

http://www.realcleartechnology.com/articles/2014/02/20/coming_soon_a_new_way_to_pay_with_your_phone_989.html

Happy reading,

J.W. Gant

New Collaboration for Mobile Payments - Visa, MasterCard, and American Express

The pot keeps getting stirred as more and more players work more and more angles in the mobile payments space.

Two days ago Visa, MasterCard, and American Express announced a partnership to develop a new global standard for mobile payments.  Mobile Commerce Daily has some information on this:

mobile-payments-power-play-faces-significant-challenges

Here is a snippet from that article:

By teaming up to create a new standard that would streamline mobile payments, leading card networks Visa, MasterCard and American Express hope to ensure a prominent role in smartphone and tablet transactions while also driving overall adoption by consumers and retailers.

Very interesting news.

Happy reading,

J.W. Gant