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Apple to enter into mobile payments?


Your phone will be your wallet

Your phone will be your wallet

Last week at WWDC, Apple introduced iOS 6 amongst others. Without entering into two much detail about the hundreds of new features that the new OS will bring, there is one that reveals that Apple might be taking a serious look at mobile payments. With the introduction of Passbook in iOS 6, your iPhone will turn into a very convenient digital repository to place all sorts of digital goodies. Vouchers, loyalty cards, promotion codes, QR codes, which include boarding passes, and movie tickets, just to name a few. These can even be geotagged, so they would become active whenever you are near the target location.

Interesting and definitely very useful, but not outstanding from other competitors which are already offering partial solutions to this problem. Likely to have a wonderful user experience though, and would define standards so that companies can create their own passbook-able digital goodies. Apparently big players in different industries are already signing up for the new platform.

However, this touches some of the items that other companies are defining around a potentially very lucrative industry: mobile payments. Storing credit / debit / stored value cards in your mobile phone would be no secret, and would be similar to Google Wallet, which opens the door to adding more intelligence to the physical moment of payment.

Apple Passbook

Apple Passbook

Game changing?

There are many different ways into which Apple might decide to introduce mobile payments, but considering their usual appetite to be real game changers, it will be interesting to see if they have anything awaiting down their sleeve.

So far the traditional approach would be to use cards stored in the phone –in Passbook- to be used through NFC (it is yet to be seen whether iPhone 5 would ship with NFC, even though many rumors point in this direction) the integration with Passbook and other digital goodies such as vouchers, loyalty points, etc would help create a more interactive payment experience, but this would not be seen as a breakthrough as it would be quite similar to the ecosystem defined by Google around Wallet. And above all, Apple would be making not –or little- money out of this.

The payments ecosystem is complex and involves many actors. From issuers to merchants, it’s an industry which has a great dependency on a very established infrastructure, and in which having the right coverage and capillarity to reach a high percentage of POS (Points Of Sale) where new technologies of mobile payments would be accepted.  This will surely be a challenge, even for a company with the drive and ability to massively push technology as Apple. NFC, with support from many companies will take some time to takeoff until a large number of Points of Sale are upgraded to support the near field technology. Yes, it is getting lots of support from mobile phone manufacturers, but merchants are yet to catch up (one-third of POS expected by end of 2012, with 2% at mid 2011 in the US).

So having set the scene, it will be very interesting to see what Apple has to offer in the mobile payments space, whether they will just rely on their ability to attract merchants to adopt Passbook as their natural digital distribution platform for digital goodies -and eventually payment methods- while reusing the existing NFC standards and Card issuers as Mastercard, Visa or American Express, or whether they will decide to change the way we understand mobile payments the same way they did with the way we understood the SmartPhone or even the way we consumed music.

Cars: The next app frontier


This is the next territory to be conquered by your apps

This is the next territory to be conquered by your apps

It’s no secret that apps have changed the way we consume content and software, and expressions like “I have an app for that” are now part of our daily lexicon. Little by little, the appmania has been overflowing SmartPhones and Tablets. TVs where the next conquered territory, and now it seems that cars, and more specifically, on board infotainment systems are the next frontier.

Key players in the industry like Denso, QNX, Magneti Marelli and the traditional car manufacturers are already working in their respective strategies for bringing apps to your car. While most of the current trends are around driving performance and self-diagnostics, extending the features currently available on most infotainment systems, some brands are already introducing very popular general purpose apps. Read Lexus here, and the recently launched latest version of their on board system, Enform, which includes some interesting apps available on board the car. Things like buying movie tickets or booking a table at your destination are now possible, even through the cars voice commands. Even checking in your destination on Facebook is now something you can do behind the steering wheel.

This probably opens a new question behind the technology on which these on board infotainment systems are based. Will we see Android or iOS based in car navigation systems?. It would definitely be very exciting as this would mean instant availability of thousands, if not millions, of apps right to be installed in your car. Interesting potential advantage for Android as some of the current platforms are already based on Linux, which could mean easier integration of Android-based apps onboard.

It’s already happening


Only a few days after this post where Social Media adoption by the Banking industry is analyzed, it is already happened. A Bank has taken the step forward to truly start providing banking services to their customers on Facebook.

ICICI Facebook Banking application

ICICI Facebook Banking application

Digital Life

Whether we like it or not, our customers’ digital life happens in the Social Media. They live and interact there, not in our online banking platform. Therefore it was only a matter of time that someone overcame the resistance and found a way of blurring the boundaries and integrating with their customers’ digital life.

As anticipated, security was -and still is- the main concern both for Financial Institutions as well as Customers when approaching Banking services on the Social Media. Other industries and online services are clearly adopting Social Media profiles as a universal form of authentication, in which your Facebook ID or your Google+ profile become your Digital identity. If Facebook and Google+ are a representation of your real life as an individual, your identities in such platforms should be sufficient proof of identity of your Digital existence.

ICICI’s approach is to make the customer go through a registration process which creates a personalized password. Usage of the application also implies a second factor of authentication, so the customer experience will look quite similar to that of the existing online banking, but at least within your Facebook environment. It will be interesting to see how new approaches to securing Banking services on Social Media will help blur the boundary even more, to a point where there will be virtually no separation between your friends’ posts and your account statements, maybe just a step-up with a strong two factor authentication to protect sensitive data, but avoiding registration processes that somehow impact the illusion of full integration. This would have an interesting consequence: If many sites allow you to log on using your Facebook ID, why should your bank be different?. Why not simplify the process and just use your Facebook ID with a second factor of authentication?.

Anyhow, a very interesting and innovative movement by ICICI which will surely be followed by competitors very soon, and will help gauge the appetite of customers for Banking Services integrated in their very own Digital space.

iTV – Continued


Rumors intensifying and details being leaked suggest that bringing App Store to your TV set will not be the only killer feature in iTV. Following Apple’s philosophy on user experience, it seems that they have managed to completely revamp the overcomplicated interface of current TV sets.

Pile of remote controls

Pile of remote controls

It is not only the growing number of remote controls  you surely have on your coffee table, but also the complexity of them. On screen menus actually did not deliver any simplification, all of the opposite, they added more and more features hidden under long lists of complicated options. So will Apple be able to change this?.

If we take a look at their history, the answer is quite clear. There is one fundamental thing the guys in Cupertino have been able to do. They have been able to make technology that is not felt as technology, and does not look like technology. They look like sophisticated products that anyone can use and enjoy.

Computers that do not look like computers, and do not require any technical knowledge to be used. How many technical messages, data, black screens do you see when your Mac starts. How many of you upgraded to OSX Lion with a few clicks?. SmartPhones and Tablets with an incredibly natural user interface, that does not feel techy at all.

So when the TV set industry is going on a completely opposite direction, are they ready to really break this trend and revolutionize the way you use your TV?.

Siri

Siri

Think Siri. This might be the answer to the way they would want to approach the relationship between you and your TV. No more remote controls. No more buttons. Talk

to your TV.

Thinking about it, probably the TV is one of the first stops in a long conquering journey. Voice interfaces have been there for a long time, but never this natural. Siri is an impressive piece of technology that… doesn’t look like technology. Game changer.

 

 

 

 

iTV?


In the last decade there have been various attempts to renew the old glorious days when the TV set was the king of the living room. Despite set top boxes, which promised a basic level of interactivity, and

some applications built into gaming consoles like PS3, the TV has remained pretty much a one way lane ever since. Yes, higher quality, definition and even 3D, but still a one direction street.

Samsung Smart TV

Samsung Smart TV

Only in the last few years some manufacturers brought some built-in applications and even internet connection to their TV set offering, like Sony with some members of the Bravia family, but the offer was still very limited and fixed to the device, with very little possibilities of upgrade, which meant it would become quickly obsolete.

But then came Apple and introduced AppStore in 2008, not only making the process of buying, installing and upgrading software as simple as 1-2-3, but also creating an incredible appmania that has been conquering other platforms and devices. So it seemed only a matter of time that the format hit the TV, and Samsung did it.

Even though the figures are nowhere near the rocketing figures of applications sold for Smart Phones and tablets, there is clearly an appetite for these on TVs, with Samsung having served 5 million downloads in the first 15 months. Clearly the technology renewal cycle of TVs is much slower than that of Smart Phones, and whilst supporting apps might be a factor in choosing a specific TV over another, might not justify the renewal of your working set.

Samsung serves over 5 million apps

Samsung serves over 5 million apps

Other popular manufacturers are joining the apps wagon and are starting to launch TVs with apps capability, but what about the most powerful apps market out there?.

Google is also joining the trend with Google TV and offering perhaps a more open approach to enjoying digital, interactive content and apps on your TV, will they ever make the jump to manufacture a Google TV Display?.

Closing the loop

No rumor around that yet, but yes around Apple. For a couple of years, rumors have persisted that Apple was preparing a revolutionary TV set, which would bring together the traditional simplicity and elegance of Apple products, with their massive app store and the power of iTunes and its possibility (in some markets) of purchasing digital content.

From a device point of view, if the rumors around iPad 3 and its retina display are accurate, its resolution will be far higher than any Full-HD TV, so iOS is already capable of feeding such a screen while granting you access to hundreds of thousands of applications. It supports WiFi, and has a front camera for doing videoconferencing over facetime. Can you imagine a better place to do facetime than your TV?.

Whilst all of these would probably justify consumers to turn their eyes on to an eventual Apple TV Display (not to be confused with the current Apple TV), Apple could possibly be behind something bigger. Think iCloud, iTunes and iTV (should they give it that name) all together. Looks like the perfect way of closing the loop of the iFamily, doesn’t it?.

Subscription

iTunes might start offering subscription services on which you might be access to all the content available via streaming, from any of your iDevices, including your brand new iTV. iCloud would allow you to store and share your existing, downloaded content and enjoy it full screen in the confort of your living room. Should they manage to do this with the quality, elegance and simplicity they usually do things, they could clearly do away with a big portion of the cable TV subscriptions.

The device

Only rumors from here onwards, but most of them point to iTV as the name of the device, and late 2012 as the launch date, with a huge 55 inch OLED screen to enjoy your apps and content from iTunes. It would be powered by iOS as a super-sized iPad, but no information on wether it would be a touchscreen or not. Limited use for this from your sofa, but still would be nice to play Angry Birds at full size…

NFC beyond payments


The spread and adoption of NFC seems to be gaining momentum in the industry, with a number of terminals either supporting or having the intention to support the technology. With the exception of Apple, who still have to make a move in this space, most SmartPhone manufacturers are already shipping NFC-enabled devices, updated list can be checked here.

With strong support from key industry players like Visa or MasterCard, and with Google redefining the whole payments ecosystem, the late 2011 and early 2012 will see the consolidation of NFC as a standard feature in mid to high-end SmartPhones. Yet more to see if Apple decides to include the technology in their yet-to-be-seen iPhone 5.

While contactless payments will continue to be the source of growth for a number of years, however there are many other uses and applications that are strongly emerging, which promise a bright future for this technology. NFC is here to stay.

SmartPhones have been gradually conquering other devices space, replacing your agenda, phone, photo and video camera, business card holder… and even computer with very advanced applications being available out there in the respective appstores. The next thing to come is clearly your wallet, changing your old-fashioned plastic credit cards for their virtual counterparts.

Cash Cards have been successfully implemented in some markets, whilst others are still hesitant to make use of them. The burden of balance top-up is still something to be resolved. NFC can boost the usage of these, as they are really convenient for day to day micro payments where a contactless, signatureless payment can be really convenient. Vending machines, public transportation, paying a taxi or your coffee at Starbucks are likely to be done with a cash card, which now you will be able to store in your SmartPhone. And guess what, recharge it directly from your banking account too!.

But there is room for NFC beyond payments.

Merchants offering loyalty cards, with or without stored value can benefit of this technology. You have loyalty cards from a couple of airlines, half a dozen hotels, your favorite coffee shop and a myriad of other merchants. Now all of them can fit comfortably in your NFC-enabled phone, and you can easily track your points, miles and rewards easily in one single place.

Access Control through NFC

Access Control through NFC

Access control

Modern houses use cards and readers to access doors and gates instead of traditional keys, pretty much like you would see in any hotel. Wouldn’t it be nice to use your SmartPhone to access home?. And it would not stop here, home automation might be one of the next things to be conquered by your SmartPhone, so start guessing the possibilities here.

Anywhere requiring identification in the form of a card can benefit of NFC for access control, so will no longer have to carry your identification badge with you. Your phone does.

Information sharing

The next best thing is information sharing. In the era of Social Media, it is all about sharing. Also in the physical world, where you are likely to exchange your business card when you meet someone, give your phone number or your facebook profile to someone you just met, or leave your card to participate in the next lucky draw. All of them can now be done by putting your phone close enough, so you can transfer your contact details, social media profiles or leave a reduced version of your contact details on a merchant. How many times have you been asked to write down the same contact details on a hotel at check-in?. Guess what, never again.

And the last, yet best

Angry Birds Magic

Angry Birds Magic

It had to be Rovio and in had to be Angry Birds to give us the latest example of NFC. The latest version of their ultra-popular game, still only available on the new NFC-enabled Nokia C7,

allows gamers to contact other gamers to unlock new levels of the addictive game. Fun?.

Does Apple bet for NFC?


There is something I quite missed on today’s Apple event. It was not Steve Jobs, and it was not iPhone 5. Actually, whether it was an upgraded iPhone 4 (as it finally turned out to be) or the long awaited iPhone 5, the feature I really missed is the NFC chip built into the latest object of desire.

NFC Enabled Phone

NFC Enabled Phone

Taking a look at the recent movements by Google, announcing Google Wallet and Offers, which create a whole ecosystem to make the most out of the NFC hardware, as well as the list of

iPhone 4S

iPhone 4S

manufacturers announcing -or even shipping- NFC-capable phones, it is surprising that Apple chose not to make a move on this space. The whole set of actors in the industry, from hardware and software manufacturers to card issuers, financial institutions and merchants are positioning themselves on what looks like one of the next big things in both Mobile Technology and Financial Services.

Apple is known for not leaving anything to chance, so either they do not believe in NFC (clearly unlikely, considering the push and support the technology is getting) or they are preparing something really big that is worth waiting for their next generation SmartPhone to be unveiled.

So is Apple preparing a move similar to Google’s in this space, by combining the hardware -probably linked to the iPhone 5 launch sometime next year- with a complete ecosystem of applications and platforms to cover the whole, end to end payment experience?. Is it wise for Apple to reach the market at least half a year later if they want to have a predominant position in this space?. Time will tell, but it looks that either they have an ace under their sleeve or it will be a big leap to cover if they wait for iPhone 5 to step in.

The NFC Ecosystem


Mobile Payments through NFC

Mobile Payments

The technology

From a technology point of view, NFC (Near Field Communications) might not imply a great revolution. In a nutshell, it is an evolution of the RFID shortfield technology that has been in use for years now, adding the possibility of bidirectional communications. With RFID, your device could send some data to the receiver, but no dialogue was possible, allowing for very simple, low value applications.

So being an improvement from RFID, there is nothing too fancy about it as a technology feature. Smartphones today support various types of communications which serve different purposes, like their Wi Fi support, 3G and Bluetooth. So what is NFC bringing to the party?. The main beauty might be in its own nature. It is near field, which means it has very short range, typically up to 4 inches. This has a double advantage, first, it makes it more difficult to intercept (even though it is not impossible) and secondly, it demands very little power from the device.

Finally a solution that allows communication between two devices positioned close enough in a reasonably private manner, that demands very little space and power. How is this little thing becoming the next big thing in Mobile?.

Payments, payments and payments

A number of industries are really excited about the massive introduction of this technology in our devices. Key players from Device Manufacturers, Carriers, Financial Services Institutions, Internet giants, all of them are making their moves in the adoption of this technology. Samsung is including NFC chips in their latest Smartphones, while Google’s wallet makes use of NFC chips to replace your old fashioned plastic credit card. Even AT&T, Verizon and T-Mobile have teamed to create the ISIS commerce network supporting NFC payments.

In essence, the NFC chip can communicate with the point of sales device in the merchant, transmitting the necessary information so that the payment transaction can be performed, exactly as you would do with your standard credit card. Typically there will be an application in your smartphone that allows you to store your credit and debit cards information in a secure manner, and that requests a PIN number in order to access that information, securing the usage of the virtual card stored in your phone.

These applications would also allow for your card issuer to provision your card over the air onto your phone.

So far it looks interesting and convenient, but not a killer app. Even if we consider that credit card fraud due to card cloning might be more difficult with the introduction of NFC than it is today, at least for the moment.

Payments

Payments

The real beauty

It is not that you replace the plastic, it is that a whole new channel is opened, allowing Merchants and Financial Institutions to enrich the moment of the payment and use that interaction with the customer to add value, link and increase customer loyalty.

The combination of a chip for performing the physical payment transaction and an application driving the process, is the real beauty behind the NFC application to mobile payments. Now you can have coupons or virtual vouchers delivered by the merchant to your phone at any time, that you can redeem to make part of the payment. What about promotional codes delivered to your phone?. Points redemption, loyalty cards… All become now part of the ecosystem surrounding the little chip, to make the most of every time you tap your phone to pay.

Google seems to have understood pretty well the broader boundaries of what NFC is bringing to the table, with products like Wallet and Offers, which cover the whole range of services for Businesses to make the most out of the new technology. Add this to geolocation and in-door location and you can start to explore the benefits of pushing offers to the potential customers that are on the surroundings of your store, which they can instantly redeem at the moment of payment.

Adoption

It will be some years for this technology to be massively present, with a conservative prediction being that it would be present in 50% of the phones by 2014. So we seem to be giving the first steps on this thrilling technology, both on the physical availability of the technology on our devices and on the number of applications we will see coming and sophisticating not only the payments process itself, but the whole relationship between Businesses, Merchants and Customers.

Thrilling, at the very least.

Are you in my Facebook?


There are two aspects I find interesting about social networks, specially those ones oriented to our leisure time, and are precisely two impacts they have on our other life, the professional one.

Are you in my Facebook?

Are you in my Facebook?

The blurred boundary

Not so much time ago, before Facebook came into our lives, there used to be a more or less clear boundary between our life at work and our life out of it. Yes, post work drinks have existed for very long, but there was still a boundary which allowed us to have two separate compartments that had little communication or interaction between them. But suddenly things changed, Facebook (and more recently Google+) came into our lives, allowing us to establish a link with our colleagues, friends, family and other relatives in which the boundaries between our professional and personal lives are blurred.

Some would argue that this could bring a number of issues in terms of our privacy, and I tend to agree that there is always a risk that someone might regret a post, a comment or a picture, but these sites normally give the -advanced- user a way of controlling their privacy and exposure. However, I still find this possibility very interesting as it has a very positive impact in the human relations within the enterprise, providing a space that allows for a more personal, human interaction between colleagues that creates stronger bonds between team members.

It is only a few years since these networks are widely adopted, but a positive impact can already be seen in teams that are already blurring the boundary. As always, there will probably be some downsides, but so far, I would say so good.

Breaking the siloes

There is another interesting thing, which more than a real impact is some sort of potential application of these social networks. Internal communication in big organizations is an issue. It is probably one of the biggest challenges organizations face. Information, expertise and knowledge sharing are a common problem which, lets admit it, we have still not manage to resolve. What about adopting a social networking strategy?. Is there anything we can learn from Facebook and similars?. I think there is.

You and I are now connected to hundreds of people all over the world, from which we receive regular updates about what they are doing, where they just checked-in or what they are eating. Real time. Anywhere.

Think about applying this to your organization and the power of such a tool. You choose who to follow, whose updates you are interested in receiving, you post information of your activity at work and share it with whom might find it interesting. You find your colleagues by expertise, location… Interesting? I really think so.

 

OS Wars vs Patent Wars


The Patent Wars

The Patent Wars

The holidays are now over, so time to resume the activity after the holiday break. However, August has not been as quiet as it normally is, at least in the Mobile Industry, well, it was, until Google announced by mid month that they where acquiring Motorola’s mobility to seriously jump into the hardware industry and give yet more power to the Android platform they have been developing over the last few years. Although boosting Android (see stats below) is the main official reason behind the operation, Motorola’s vast portfolio of patents has surely played a role in the decision, specially after the war started earlier this year when Apple and a number of other manufacturers, including Microsoft and RIM teamed to acquire other patent portfolios, something which was publicly criticized by Google.

This comes in a moment where Android is clearly becoming the rival to fear for Apple’s omnipresent iOS powering their iPhones and iPads. While SmartPhone sales rocket literally on every market, Android surpassed iPhone in market penetration on a global basis, after it had already done so in the US in November 2010. If we include tablets into the equation, Apple still leads the way.

But not everything seems to be a honeymoon after Google’s announcement. Even though Google claims to have gained agreement with the main phone makers using Android, looks like behind the lines some of them are not too happy about Google entering into competition with them in their traditional marketplace. Maybe casually, only two weeks later Samsung announced a new set of devices using the Bada Operating System, the Waves Y, M and 3.

Probably this will not mean that Bada will gain enough market penetration to threaten Android’s leading market position, but from an application development and marketing perspective, definitely is something to keep an eye on, as this could potentially degrade into an OS war.

When facing the marketing, product definition and development of a mobile application, one of the key decisions to take is the platforms to support. Every business will have different target audiences, and the multiplicity of platforms has a great impact on the total cost of ownership of the mobile software products companies provide. It is not only the different skills needed for development, but also the different user experiences that each platform provides, as well as the increasing complexity of testing, customer support, incident management, etc. This is clearly being a barrier for some other platforms to gain growth in the number of available applications in their respective application stores and markets, as corporations will need a minimum number of customers to justify the development and maintenance costs for a specific platform.

Time will tell wether this evolves into an OS war, or wether the market continues the consolidation under the two -for the moment- winners.